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Chile promotes renewable energy investment for agriculture

Chile is taking advantage of its outstanding natural resources (wind, hydro, biomass and geothermal) for renewable generation and the Chilean government is actively promoting NCRE development by supporting private initiatives.

Last week the Chilean vice agriculture minister Alvaro Cruzat announced that Chile will develop non-conventional renewable energy for agriculture to sharpen the competitiveness of its forest-agriculture-livestock products. The initiative will be promoted with clear rules to facilitate investment in those sectors and increase the competitiveness of Chilean products abroad.

 

“The ministry is working on different projects in a parallel way, counting on the participation of the private sector as a fundamental actor in the development of the investment projects”… “20 percent of our energy demand is to be generated from non-conventional renewable energy by 2020,” Cruzat said.

Chile has a budget of 80 million U.S. dollars for the new NCRE projects in agriculture, which will help cut up to 30 percent of energy costs, which have risen sharply in recent years. The country has already approved an initial investment of 12 million  dollars, and pledged another 85 million dollars for 2012, Cruzat said.

Energy demand in agriculture may vary in different seasons, as some parts of the year may see the energy need triple over that in seasons of lower demand. That makes it even more important for Chile to explore alternative energy sources, Cruzat said.

“Considering the particularities of our sector, the development of associated NCRE projects has a great value, because on the one hand it allows the reduction of costs, while at the same time it adds a distinguished element to the final consumers by reducing the carbon footprint,” he said.

Chile’s renewable energy is expected to expand significantly over the coming years. Recent amendments to the Electricity Act enable generation projects based on renewable resources to access electricity markets. Moreover, the Renewable Energy Law (20.257) passed in 2008 establishes that at least 5% of all electricity must come from renewable sources by 2010. This percentage must increase by 0.5% each year to reach an overall goal of 10% in 2024.

This new framework and higher energy prices have created a surge in Renewable Energy projects.

Contact the Gateway to South America team to learn about the best investment opportunities in the region. The company is a benchmark for foreign investors wishing to invest in Argentina, Brazil, Chile, Paraguay, Peru and Uruguay, providing expert advice on property acquisition and investment tours.

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