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16 April 2020

Chile lauds renewables, despite riots, virus and corruption

Chile’s move this week to bring forward by two years its peak CO2 emissions to 2025 is likely to see a whole host of renewables companies opening a new office in Chile – but chances are if you have not already opened an office there you are too late.

Although Chile has been a hotbed of fossil fuels, for some years that position has been undermined by solar in particular, but also onshore wind.

The move to upgrade the commitment to the UN is long overdue, and a testament to the Minister of the Environment, Carolina Schmidt, who is one of the recently appointed ministers in the second Piñera government. That second set of ministers came about because of the riots which continued from October last year until coronavirus hit the country. It remains to be seen whether or not riots will begin again after the coronavirus pandemic.

But it is certain that Chile will be successful bringing forward peak emissions. In deals we have tracked in our database alone, some 702 MW of wind came online last year, and 1.5 GW of solar. Planned for 2020 around 2.5 GW of wind power and 5.1 GW of solar power is due to come online in Chile and not much less is planned for 2021.

In total about 13.8 GW of renewables will be added on projects already permitted and another 13.4 GW are seeking permits into the future – and if all goes ahead that’s 27.2 GW already scheduled prior to 2030, enough to replace almost all existing electricity capacity.

This is a country where the downtrodden masses finally snapped when pollution was at a fossil fuel peak, as rises in metro costs triggered a reaction against corruption, pollution and unfairly distributed wealth, created through the highly unpopular privatization of essential services, including energy. Chile is on the verge of becoming what the US hates most, a socialist regime on its side of the world, hell bent on taking everything back into state ownership.

If it makes good on its commitments – and remember it is only the second South American country after Suriname to update its Nationally Determined Contribution under the Paris Agreement, then it will use bounce-back finance to recover from Covid-19 to create a sustainable series of industries.

The country has been in the grip of a fossil fuel frenzy as part of privatization, until recent renewables volumes have finally emerged. The main sources of electricity in Chile were hydro, gas, oil and coal but if you count hydro as renewables, then it has risen to 60%. The electricity industry is privatized with Endesa as the largest company in the field, a cheerleader for LNG gas.

The country’s reaction to Covid-19 has been an early lockdown, but it is so keen to see people back to work on its economy, frail from the riots, that it will being to hand out “antibody” certificates to allow people to return to work. Unfortunately the tests that the government plans to rely on are Chinese produced, and though to be highly unreliable.

As Schmidt came into her office in 2018 her first challenge was to deal with a huge pollution problem in Quintero, and which is a key center of Chilean industrial development and is home to some of the biggest and dirtiest industries, coal power plants, cement plants, thermal power and natural gas.

This was a leak of dangerous chemicals – methyl chloroform, nitrobenzene and toluene – with thousands of locals having to be treated for gas poisoning.

So Schmidt has had her first run-in with fossil fuel companies and came up with a Plan of Prevention and Atmospheric Decontamination for the local communities, which lets the government control chemicals emissions and created a permanent oversight from Ministry of Environment. It was on the ack of this that she led the bid to bring COP25 to Chile, which was divereted to Madrid due to the Chilean riots.

Now Schmidt is taking on the response to Covid-19 and seems to have won her way once again in a re-organized government, and has updated the country’s Nationally Determined Contribution (NDC) to the 2015 Paris agreement – one of the only countries globally to do so in the run up to the next COP 26 conference.

Chile has essentially promised the UN six key moves, creating sustainable industry and mining, getting started on hydrogen production and consumption, changing the way homes and public buildings are constructed construction, building out EV charge points, and ridding the country of coal-fired power plants, and instigating an energy efficiency regime. It will be interesting to see if she has the political support to see this through up against entrenched fossil fuel opposition.

Chilean minsters said that to achieve this would mean investment opportunities of between $27 billion and $48.6 billion in the run up to 2050, a small fraction of what some other large countries are talking about, but significant in this economy.

After the last climate change conference the Ministry of Science brought together 600 scientists, organized in seven working groups to gather evidence to calculate the future carbon budget for Chile and says it has now set clear and achievable goals.

The resulting document was presented a week ago by Schmidt; the Minister of Energy, Juan Carlos Jobet; and the Minister of Science, Andrés Couve.

Schmidt maintained that “When we overcome the (coronavirus) crisis, we will enter a reactivation stage that must be sustainable, where recovery plans must consider the climate crisis and its social impact on people and territory as a fundamental factor. This is a key moment, which is why we present our new NDC, with ambitious goals and commitments that allow us to focus our recovery plans with a clear objective: to advance at a firm pace in the transformation towards a low-emission and climate-resilient economy, with great social, environmental and economic advantages to improve people’s quality of life “.

The NDC must also consider variables such as water security, gender equity and equality in what it talks about as a “just transition,” safeguarding the rights of the most vulnerable in the process of decarbonization of the energy matrix.

The Chilean government has one last chance to do right by its population to prevent a return to the rioting of 2019, and Schmidt seems determined that it will become a leader in renewables as part of that.

Chile is specifically committing to a Green House Gas emissions budget below 1,100 MtCO2eq, between 2020 and 2030, with maximum emissions by 2025, and plans to get that down to 95 MtCO2eq by 2030. In addition, it proposes a reduction of at least 25% of total black carbon emissions by 2030, compared to 2016. What is essentially a 15% drop in fossil fuels can be achieved in multiple ways in Chile, but a shift from coal to natural gas might be one way, and it would require about

It has made similar promises for water quality also and wants to set up permanent monitoring of water risk and water quality. If that happens fossil fuel industries will be on the run, as they constantly try to conceal how much water they are using and contaminating.