Chile: Geothermal Energy Has Good Potential to Diversify Power Generation Mix

Can Chile Become a Hotspot for Investment in Geothermal Energy? (ESMAP)

(Courtesy CIA.gov)

Chile’s abundant geothermal potential provides a good renewable energy option to further diversify the country’s power generation mix – something consistent with Chile’s Energy Policy, which aims for at least 70% of national electricity generation to come from renewable sources by 2050.

Chile has long been the leader of Latin America's renewable energy market. In 2015, investment in renewables, (including small hydropower projects of <50 MW) was around $2.6 billion.

The rate of growth of investment in renewable energy has increased in the past few years, and competition has lowered electricity costs.

But geothermal energy is lagging. Chile’s only geothermal plant, Cerro Pabellón, which opened earlier this year, is South America’s first operating plant. The Government has tried to develop geothermal energy, but despite a promising start, several issues are preventing further investments in exploration.

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