TELF AG explores Chile’s renewable capabilities
An important international player
The mining initiatives undertaken by Chile in recent years have always attracted the attention of global players in the sector for more than one reason. The South American nation, which represents the second largest global producer of lithium after Australia and the first in the world in the copper field, recently announced its intention to nationalize the lithium industry, following in the footsteps of previous Chilean governments which, all In the early 1970s, created a state copper company which today is still the largest in the world (Codelco). Such an initiative is closely connected to industrial needs during the energy transition, an epochal change in which lithium could be destined to play a key role, particularly for its industrial applications.
However, Chile’s energetic potential is not linked solely to the minerals sector, i.e., those raw materials necessary to manufacture the technologies for the diffusion of new clean energies. According to a recent analysis by the IMF, the South American nation could soon become a global protagonist also in the renewable energy sector, thanks above all to some natural characteristics that would make Chile the perfect theater to host these new energies.
National strategies
In the mining sector, the Chilean authorities have constantly reiterated their desire to work personally to protect the country’s biodiversity and share the benefits of extractive activities (and subsequent processing) with local communities through a progressive nationalization of activities. According to the IMF report, developing an increasingly green economy based on renewable energy could also achieve the same objectives and create the perfect conditions for increased social equity.
But what are Chile’s advantages in the field of renewables? In this regard, it is necessary to mention the reduced electricity production costs for solar and wind power, mainly due to the strong winds that continuously blow in the south of the country and the high solar radiation in the northern side. With these natural characteristics, Chile seems to be at the pole position for a green future powered by renewable energy produced at home and a reduced cost.
It is no coincidence that between 2010 and 2022, the energy produced thanks to renewable sources in Chile was responsible for a percentage of more than 20% of the total electricity supply. In the long term, according to the IMF report, the increase in the use of renewable sources could lead to economic growth of 1%. Furthermore, the change in the composition of the Chilean energy mix, in addition to generating indisputable benefits linked to decarbonization and pollution reduction, would grealty decrease electricity production costs, lowering them by up to 30%.
The achievement of these sustainable objectives for Chile is also closely linked to the industrial applications of one of its most abundant resources, lithium. Through its use in electric vehicle batteries, this material can represent a very important ally for reducing carbon emissions. Chile, with its vast reserves of this material, will certainly be able to contribute to a large extent to international efforts for decarbonization. According to the IMF, the foreseeable increases in global demand for lithium could lead to a parallel expansion of the Chilean lithium industry, adding value to closely related activities. From this point of view, Chile is already working to create new public-private partnerships to expand its lithium production, thus bringing the sector to a new level of development.
