On Climatescope 2014, Chile scored 1.79, placing it in the top five of the 55 countries accessed. When compared with the other 25 Latin American and Caribbean countries, it ranked 2nd, below only Brazil.
Chile is hungry for energy: demand for power has grown at an annual average of 4.3% since 2010. However, as it does not produce any of the fuels it uses (natural gas and oil, although it does produce a small amount of coal), it relies on imports, which drive up electricity prices, especially on the spot market.
In 2013, the average spot price was $112.3/MWh, but on Sistema Interconectado Central, one of the country’s main grid systems, it was much higher at $148.7/MWh, with peaks above $200/MWh in the summer months.
As a result, Chile is the first country where wind and solar projects are being developed on a purely merchant basis, selling directly to the spot market. Investment has followed: in 2013, a total of $1.6bn was invested in clean energy capacity, with $958m going to solar projects and $583m to wind farms.
Chile has the economic fundamentals in place for the development of renewable power projects. Looking ahead, the country is on the right path to achieve its target to source 20% of its power from renewables by 2025.