chile oportunities in energy

Ahumada 11, 12th Floor,Santiago - Chile

Tel: (56 - 2) 698 4254Fax: (56 - 2) 698 9476

www.foreigninvestment.cl

CHILE opportunities opportunities

in energy

w w w. f o r e i g n i n v e s t m e n t . c l

Ahumada 11, 12th Floor,Santiago - Chile

Tel: (56 - 2) 698 4254Fax: (56 - 2) 698 9476

www.foreigninvestment.cl


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FOREIGN INVESTMENT COMMITTEE

The Foreign Investment Committee is the agency that represents the State of Chile in its dealings with those investors who choose to use the Foreign Investment Statute (DL 600) as the legal mechanism for bringing foreign direct investment (FDI) into Chile. The Foreign Investment Committee is formed by the Ministers of Economy (who acts as president of the Committee), Finance, Foreign Relations and Planning as well as the president of the Central Bank. Other ministers responsible for specific economic sectors are also invited to participate in meetings whenever deemed necessary. Mission

To help position Chile as a highly attractive destination for foreign investment and international business through its role in matters related to the administration and communication of the corresponding legal norms, the development of promotional activities of different types and the preparation of information concerning foreign investment for investors and potential investors. Strategic objectives

To ensure the correct application of the Foreign Investment Statute in order to safeguard the rights of both the State and foreign investors by communicating the laws terms and administering related legal procedures: the analysis of investment applications, the signing of investment contracts and the authorization of remittances.

To develop all types of initiatives to communicate, promote, coordinate and implement measures to foster the entry of foreign investment.

To maintain an up-to-date and accurate statistical register of foreign investment under the Foreign Investment Statute by compiling information about contracts and flows under these contracts in order both to safeguard investors interests and to prepare statistical reports for public use.

The Executive Vice-Presidency

The Foreign Investment Committee is headed and managed by an Executive Vice-President who is appointed by the President of the Republic.

The Executive Vice-Presidency provides general information and guidance to any investor about Chile, its economic and social environment, legal framework and policies on FDI. When requested, it provides information on how to begin the process of setting up a businesses in Chile as well as the procedures and regulations to which any investor must adhere, whether signing a D.L. 600 contract or not, at the national, regional and sector-specific levels. In order to promote Chile as an attractive place to invest, the Executive Vice-Presidency coordinates business missions abroad, organizes seminars and conferences and publishes regular reports about Chiles business climate and about investment opportunities, both in print and electronic form. In developing these promotional activities, it works with other ministries and State agencies as well as with the local and foreign private sector.

COMIT DE INVERSIONES EXTRANJERAS

El Comit de Inversiones Extranjeras es el organismo que representa al Estado de Chile en sus tratos con aquellos inversionistas que eligen usar el Decreto Ley 600 (D.L. 600), o Estatuto de la Inversin Extranjera, como mecanismo para ingresar Inversin Extranjera Directa (IED) al pas.

Est conformado por los Ministros de Economa (que acta como Presidente del Comit), Hacienda, Relaciones Exteriores, Planificacin, adems del Presidente del Banco Central.

Adicionalmente, los ministros que representan sectores econmicos especficos son invitados a participar en las sesiones del Comit de Inversiones Extranjeras (en caso que corresponda).

Misin Institucional

Apoyar el posicionamiento de Chile como plaza de alto atractivo para la inversin extranjera y los negocios internacionales actuando en materias relacionadas con la administracin y difusin de la normativa legal pertinente, el desarrollo de actividades de promocin de diversa ndole y la elaboracin de informacin relevante en materia de inversin extranjera, para inversionistas extranjeros y potenciales inversionistas.

Objetivos Estratgicos Velar por la correcta aplicacin del Estatuto de la Inversin Extranjera con el objeto de resguardar los derechos del Estado, como de los inversionistas extranjeros, mediante la difusin de su contenido y la administracin de los procedimientos jurdicos vinculados a ste: anlisis de solicitudes, celebracin de contratos, autorizacin de remesas. Desarrollar todo tipo de iniciativas cuyo objeto sea informar, promocionar, coordinar y ejecutar toda accin tendiente a incentivar el ingreso de inversin extranjera. Mantener un registro estadstico actualizado y fidedigno de la inversin extranjera acogida al Estatuto de la Inversin Extranjera, mediante la sistematizacin de la informacin referida a los contratos como a los flujos de capital que se efectan con cargo a stos, con el propsito de resguardar los intereses de los inversionistas como asimismo elaborar informes estadsticos de uso pblico.

La Vicepresidencia Ejecutiva (VECIE) El Comit de Inversiones Extranjeras es dirigido y administrado a nivel operativo por el Vice-Presidente Ejecutivo, quien es designado por el Presidente de la Repblica.

La Vicepresidencia Ejecutiva proporciona informacin y orientaciones generales a cualquier inversionista respecto al pas, su ambiente econmico y social, marco jurdico y las polticas hacia la IED. Cuando se requiere, entrega informacin sobre cmo comenzar el proceso de establecer un negocio en Chile as como la orientacin en torno los procedimientos y las regulaciones que deben ser cumplidos por cualquier inversionista, tanto si firman un D.L. 600 o no, a los niveles nacionales, regionales y sectoriales.

Con el objetivo de posicionar a Chile como un lugar atractivo para invertir, la Vicepresidencia Ejecutiva coordina misiones de negocios al exterior, organiza seminarios y conferencias, y publica informes regulares sobre el clima de negocios de Chile y oportunidades de inversin, tanto en forma impresa como electrnica. En estas actividades promocionales, trabaja junto con otros ministerios y organismos del Estado, as como con el sector privado local y extranjero.


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FOREIGN INVESTMENT COMMITTEE

The Foreign Investment Committee is the agency that represents the State of Chile in its dealings with those investors who choose to use the Foreign Investment Statute (DL 600) as the legal mechanism for bringing foreign direct investment (FDI) into Chile. The Foreign Investment Committee is formed by the Ministers of Economy (who acts as president of the Committee), Finance, Foreign Relations and Planning as well as the president of the Central Bank. Other ministers responsible for specific economic sectors are also invited to participate in meetings whenever deemed necessary. Mission

To help position Chile as a highly attractive destination for foreign investment and international business through its role in matters related to the administration and communication of the corresponding legal norms, the development of promotional activities of different types and the preparation of information concerning foreign investment for investors and potential investors. Strategic objectives

To ensure the correct application of the Foreign Investment Statute in order to safeguard the rights of both the State and foreign investors by communicating the laws terms and administering related legal procedures: the analysis of investment applications, the signing of investment contracts and the authorization of remittances.

To develop all types of initiatives to communicate, promote, coordinate and implement measures to foster the entry of foreign investment.

To maintain an up-to-date and accurate statistical register of foreign investment under the Foreign Investment Statute by compiling information about contracts and flows under these contracts in order both to safeguard investors interests and to prepare statistical reports for public use.

The Executive Vice-Presidency

The Foreign Investment Committee is headed and managed by an Executive Vice-President who is appointed by the President of the Republic.

The Executive Vice-Presidency provides general information and guidance to any investor about Chile, its economic and social environment, legal framework and policies on FDI. When requested, it provides information on how to begin the process of setting up a businesses in Chile as well as the procedures and regulations to which any investor must adhere, whether signing a D.L. 600 contract or not, at the national, regional and sector-specific levels. In order to promote Chile as an attractive place to invest, the Executive Vice-Presidency coordinates business missions abroad, organizes seminars and conferences and publishes regular reports about Chiles business climate and about investment opportunities, both in print and electronic form. In developing these promotional activities, it works with other ministries and State agencies as well as with the local and foreign private sector.

CHILE, OPPORTUNITIES IN ENERGYForeign Investment Committee. All rights reserved.Requests to reproduce part or all of this publication should be sent to [email protected].

First edition. XX copies. XX 2011.Designed by www.vox.clPhotos courtesy of Fundacin Imagen de Chile (www.fundacionimagendechile.cl).

Published in Chile.

CHILE, OPORTUNIDADES EN ENERGAComit de Inversiones Extranjeras. Todos los derechos protegidos.Para solicitar permiso para la reproduccin dirigirse a [email protected].

Primera edicin. XX copias. XX 2011.Diseo www.vox.cl.Fotografas cortesa de Fundacin Imagen de Chile (www.fundacionimagendechile.cl).

Publicado en Chile.

Chiles electricity system / El sistema elctrico de Chile 7

Institutional structure: regulation and the environment Estructura institucional: regulaciones y medioambiente 27

Alternative Renewable Energy (ARE) / Energas Renovables no Convencionales (ERNC) 33

Investment opportunities/Oportunidades de inversin 39

Foreign Direct Investment in energy / Inversin Extranjera Directa en Energa 49

CONTENTS / NDICE


4 5

5

ChileRegions / Regiones

P

AC

IF

IC

O

CE

AN

/O

CA

NO

PA

CF

ICO

ARICA Y PARINACOTA

TARAPAC

ANTOFAGASTA

ATACAMA

COQUIMBO

VALPARASO

SantiagoMETROPOLITANA

LIBERTADOR GENERAL BERNARDO OHIGGINS

MAULE

BO-BO

ARAUCANA

LOS ROS

LOS LAGOS

CoihaiqueAYSN DEL GENERALCARLOS IBAEZ DEL CAMPO

MAGALLANES Y LA ANTRTICA CHILENA

Arica

Pta. Arenas

Pto. Montt

Valdivia

Temuco

Concepcin

TalcaRancagua

La Serena

Iquique

Copiap

Antofagasta

Valparaso

Brasil

Guyana

Surina

mGua

yana

France

saVenezuela

Colombia

Ecuador

Per

Bolivia

Paraguay

Chile UruguayArgentina

Geography / Geografa

Chile is located in the extreme southwestern part of South America and stretches through the Antarctic to the South Pole. Its most western territory is Easter Island in Oceania. Chiles varied topography ranges from the Atacama Desert in the north, with its great mineral wealth - principally copper and nitrates - to the agricultural and wine-growing Central Valley, where the capital Santiago is located, and to the woods, mountains, lakes, glaciers and fjords of the south.

Chile est situado en el extremo sudoccidental de Amrica del Sur y se prolonga en el continente antrtico hasta el Polo Sur. Su provincia ms occidental es Isla de Pascua, en Oceana. Posee una diversidad topogrfica que comprende el Desierto de Atacama por el norte que contiene gran riqueza mineral, principalmente cobre y nitratos. El valle central, incluyendo la capital, Santiago, alberga la agricultura y vitivinicultura y hacia el sur, el pas tiene bosques, montaas, lagos, glaciares, fiordos y canales.

Area / Superficie Mainland & islands / Continental e insular : 756,096 km2 Antarctic / Antrtica : 1,250,000 km2 Total : 2,006,096 km2

Mainland length / Longitud continental : 4,200 km

Administrative divisions / Divisin poltico administrativa : 15 regions /regiones, 53 provinces/ provincias and 346 municipal districts / comunas

Government / Gobierno : The President of the Republic serves as head of state and head of government. Since March 2010, this post has been held by Sebastin Piera. Est encabezado por un Presidente de la Repblica, quien es el jefe de Estado y de gobierno. Desde marzo de 2010, este cargo es ejercido por Sebastin Piera.

Social

Population / Poblacin : 16.9 million / millonesPopulation density / Densidad : 20.4 inhabitants/km2 / habitantes por km2Official language / Idioma oficial : Spanish / EspaolCurrency / Moneda : Peso Literacy / Tasa de alfabetizacin : 97%Life expectancy / Esperanza de vida : 78 years / aos

Economy / Economa

GDP / PIB 2010 : US$203,925 million / millonesGDP per capita / PIB per cpita (nominal, 2010) : US$11,929 (IMF)GDP per capita / PIB per cpita (PPP, 2010) : US$14,982 (IMF )Unemployment rate / Tasa de desempleo 2010 : 8,1%GDP growth / Crecimiento del PIB (2010) : 5,2%Exports / Exportaciones (2010) : US$71,029 million / millonesImports / Importaciones (2010) : US$55,174 million / millones

Ocano Austral

ile

Chile in South America / Chile en Sudamrica


6 7

Chiles electricity system / El sistema elctrico de Chile

La decision de Hot Rock Limited de invertir en el sector geotrmico de Chile se basa en la

alta calidad del ambiente comercial del pas, el excelente potencial de los recursos volcnicos para

la generacin de energa elctrica, un poderoso mercado que requiere generar 15.000 MWe para los prximos 10 a 15 aos y la creciente

preocupacin de su gobierno por desarrollar la energa geotrmica como recurso clave dentro del

mix de energas renovables disponibles

Peter BarnettManaging Director.

Hot Rock Limited.

The decision of Hot Rock Ltd. to invest in Chiles geothermal sector reflects the high quality of the

countrys business environment, the excellent potential of its volcanic resources for generating

electricity, a strong market that will require 15,000 MWe over the next 10 to 15 years and

the governments increasing interest in the development of geothermal energy as a key

resource within the available mix of renewable energies.

Durante las ltimas cuatro dcadas, Chile ha duplicado su demanda elctrica cada diez aos. Si el pas crece a tasas de seis por ciento promedio al ao, la meta fijada por el Gobierno para alcanzar el desarrollo el ao 2018, esto significar prcticamente duplicar la matriz en la prxima dcada. Una proyeccin hacia el ao 2050, indica que se requerirn entre 50 y 80 mil megawatts adicionales a los 15.500 MW actuales.

Para lograr estos objetivos, ser crucial para Chile asegurar el suministro de energa segura, competitiva y sustentable, por lo que es prioritario diversificar la matriz energtica desarrollando las diversas fuentes de energa existentes en el pas.

Consumo

El crecimiento de la demanda energtica en Chile ha ido prcticamente a la par de su desarrollo econmico, con una tasa de crecimiento anual promedio de 4,2% desde 1990, y una cada al 2,4% en los ltimos diez aos, que se explica principalmente por la contraccin del 1,7% del PIB en 2009. El consumo elctrico, en tanto, ha aumentado de manera notoria, alcanzando un promedio anual cercano al 4%.

Over the past four decades, demand for electricity in Chile has doubled every ten years and, if the economy is to grow at an average annual rate of 6% - the goal set by the government in order for the country to attain full development by 2018 - its electricity matrix will again have to practically double in size over the coming decade. Looking further ahead to 2050, estimates suggest that it will then need an installed capacity of 65,000-95,000 MW, up from around 15,500 MW at present. In order to ensure a secure supply of competitive and sustainable energy for the future, it will be crucial for Chile to harness all its possible sources of energy to the expansion and diversification of its electricity matrix.

Consumption

Growth of demand for energy has closely mirrored Chiles economic growth, rising at an average annual rate of 4.2% since 1990, with a drop to 2.4% over the last ten years explained mainly by a 1.7% contraction of GDP in 2009. The increase in electricity consumption has, however, been even more marked, reaching an annual average of close to 4%.

Source: Energy Ministry (www.minenergia.cl).* Total primary energy supply.

Primary Energy Supply and GDP, 1999-2009Consumo Primario de Energa, 1999-2009 (respecto al PIB)

160

140

120

100

80

60

40

20

0 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009

TPES* GDP

Grow

th In

dex

Indi

ce C

recim

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o (19

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The transport sector is by far Chiles largest user of energy, accounting for 36% of final consumption in 2009. It was followed by manufacturing and the countrys households (each with 22%) and mining (15%).

Over 70% of Chiles primary energy consumption is supplied by hydrocarbons (oil, natural gas and coal) which are mostly imported. In addition, it produces energy from some domestic sources, including principally wood/biomass which is used for heating as well as to produce electricity, water in form of hydroelectricity, and the natural gas reserves that exist in the Magallanes Region of the far south.

Comparison with industrialized countries suggests that, as the Chilean economy continues to expand, so too will its energy intensity. In line with Chiles commitment to contributing to mitigation of climate change, efforts are, however, in place to increase energy efficiency.

El principal sector en el consumo de energa en Chile es Transporte, que registr un 36% del consumo final en 2009. Le siguieron Industria y el consumo Residencial (cada uno con un 22%), y Minera (15%).

Ms del 70% del consumo primario de energa de Chile corresponde a hidrocarburos (petrleo, gas natural y carbn), cuya mayor parte es importada. Asimismo, el pas produce energa a partir de fuentes locales, que incluyen principalmente la lea/biomasa, utilizada para calefaccin y produccin de electricidad, agua para la generacin de hidroelectricidad, y las reservas de gas natural de la regin de Magallanes, en el extremo sur del pas.

Una comparacin con los pases desarrollados sugiere que, a medida que la economa chilena contine creciendo, tambin lo har su intensidad energtica. Alineados con el compromiso de Chile de contribuir a la disminucin del cambio climtico, los esfuerzos estn orientados adems a incrementar la eficiencia energtica.

1994 1995 1996 1997 1998 1999 2004 2001 2002 2003 20051990 1991 19931992 2006 20092007 20082004

250,000

200,000

150,000

100,000

50,000

0

Commercial, Public & Residential Manufacturng & Mining Transport

Final Energy Consumption, 2009(By sector)

Distribucin del consumo final de energa, 2009 (Por sector econmico)

Source: Energy Ministry (www.minenergia.cl).

Manufacturing22%

Services5%

Households22%

Transport36%

Mining15%

Final Energy Consumption, 1990-2009(By sector)

Evolucin del Consumo Final de Energa, 1990-2009 (Por Sector Econmico)


Primary Energy Supply, 2009(By source)

Consumo Primario Nacional, 2009 (Por fuente energtica)


Coal16%

Hydroelectricity9%

Wood & others20%

Crude oil43%

Natural gas12%


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Energy industry Services Households Manufacturing & mining Transport

400,000

350,000

300,000

250,000

200,000

150,000

100,000

50,000

02007 2010 2013 2015 2018 2020

Base scenarioEscenario Base


Based on GDP growth projections for Chile by international financial institutions, it is, nonetheless, estimated that final energy consumption will grow by around 3% a year through to 2020.

Electricity matrix

Chile currently has an installed electricity generating capacity of some 15,500 MW and a gross electricity output of over 55,000 GWh. Its matrix comprises principally hydroelectricity and thermal generation in coal and dual (natural gas-diesel) plants. It also includes some new renewable energy sources but on a much smaller scale.

Electricity is supplied through four systems:

Central Interconnected Grid (SIC). With an installed capacity of 11,835 MW, this covers the area between Taltal in the north and the Chilo Archipelago in the south, supplying over 90% of the countrys population. Northern Interconnected Grid (SING). With an installed capacity of 3,575 MW, this serves the north of the country between Arica and Taltal. Aysn System. This grid, with a capacity of 49.9 MW, serves exclusively the Aysn Region of the far south. Magallanes System. Also in the far south, this 99.2 MW grid serves the Magallanes Region.

Sobre la base de las proyecciones de crecimiento del PIB realizadas por distintos organismos financieros internacionales, se estima, sin embargo, que el consumo de energa crecer alrededor de un 3% anual hacia 2020.

Matriz elctrica

Actualmente, la capacidad instalada elctrica chilena bordea los 15 mil MW y la generacin total bruta de electricidad supera los 55 mil GWh. Las principales tecnologas de generacin son la hidroelectricidad y las plantas trmicas a carbn y duales (gas natural y diesel). Tambin se incluyen energas renovables, aunque en menor proporcin.

La electricidad es distribuida a travs de cuatro sistemas:

El Sistema Interconectado Central (SIC). Con una capacidad instalada de 11.835 MW, se extiende entre Taltal en el norte y el Archipilago de Chilo en el sur, aportando suministro elctrico a ms del 90% de la poblacin chilena. El Sistema Interconectado del Norte Grande (SING). Con una capacidad instalada de 3.575 MW, cubre el territorio entre Arica y Taltal. El Sistema de Aysn. Esta red, con una capacidad de 49,9 MW, atiende el consumo de la Regin de Aysn en el sur del pas. El Sistema de Magallanes. Tambin ubicado en el extremo sur del pas, sus 99,2 MW, abastecen a dicha regin.


Chile

Latin America

Africa

Middle East

Asia

North America

Europe

0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4

Energy Intensity, 2008 (By region)

Intensidad energtica, 2008 (Por regin del mundo)

TPES

/GDP

(TEP

/US$

2 m

illio

n PP

P)PE

S/GD

P (T

EP p

or m

il US

$2 P

PP)

TCal


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Power generation technologies

In the mid-1990s, hydroelectricity accounted for 60% of the combined capacity of the SIC and SING, followed by coal (27%) and oil, gas and biomass (13%). A significant diversification has, however, since taken place and, by 2010, the share of hydroelectricity had dropped to 35% while gas 1 had increased to 31%, followed by coal (16%), diesel (15%) and biomass and wind energy (1%).

1) Mainly dual plants which can operate with gas or diesel.

Tecnologas de generacin

A mediados de los aos 90, la capacidad instalada para generacin elctrica, considerando en conjunto al SIC y el SING, era en un 60% hidrulica, seguida por el carbn (27%), y petrleo, gas y biomasa (13%). Sin embargo, desde entonces se ha producido una notoria diversificacin. Para 2010 la capacidad hidrulica se redujo a un 35%, mientras que el gas 1 se ha incrementado al 31%, seguido por el carbn (16%), el diesel (15%) y la biomasa y energa elica (1%).

1) Mayoritariamente plantas duales, que pueden operar con gas o disel.

SIC: Installed Capacity, 2010(By energy source)

Capacidad Instalada en el SIC, 2010(Por fuente energtica)


Biomass1.7%

Coal11.4%

Oil14.9%

Gas25.4%

Hydro45.2%

Eolic1.4%

SING: Installed Capacity, 2010(By energy source)

Distribucin de la capacidad instalada en SING, 2010 (Por fuente energtica)


Hydro0.4%

Oil 9.8%

Coal31.8%

Gas58.0%

SIC + SING Installed Capacity, 1996-2010 (By source)

Evolucin de la Capacidad SIC + SING en MW, 1996-2010 (Por tecnologa de generacin)

1996 1997 1998 1999 2004 2001 2002 2003 2005 2006 2009 20102007 20082004

6,000

5,000

4,000

3,000

2,000

1,000

0

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0


Biomass Coal Eolic Gas Hydro Oil Total


SIC + SING 1996 1997 1998 1999 ... 2010

Biomass 0.9% 0.9% 0.7% 0.7% ... 1.3%Coal 27.1% 26.8% 25.9% 25.9% ... 16.2%Eolic 0.0% 0.0% 0.0% 0.0% ... 1.0%Gas 3.1% 8.2% 16.2% 19.7% ... 31.2% Hydro 62.0% 57.8% 51.8% 48.4% ... 34.8%Oil 6.8% 6.3% 5.4% 5.3% ... 15.5%Total 100% 100% 100% 100% ... 100%

SIC + SING % Installed Capacity, 1996-2010 (By source)% de Capacidad Instalada (Por tipo de tecnologa)

Net p

ower

per

sour

ce (M

W)

Ener

ga N

eta p

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cnol

oga

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raci

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W)


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Hydroelectricitys importance in Chiles energy matrix has always implied a supply risk due to variations in hydrology. Calculations based on historic hydrological data indicate that Chiles present installed hydro capacity represents an output of 30,000 GWh during a wet period but can drop to a third of that level in a dry period.

Starting in 1998, natural gas was introduced as an alternative to coal-fired generation and peaked at 36% of total output in 2004 before starting to drop again due to restrictions on supply from Argentina. This, moreover, coincided with a dry period, triggering an increase in the use of oil derivatives, particularly diesel, with generators converting plants originally designed for natural gas to dual use as well as investing in back-up diesel capacity.

Gas supply restrictions also meant renewed investment in coal-fired capacity. However, the use of gas to generate electricity again increased in 2009, rising by close to 70% over the previous year. This reflected the start of operations of the Quintero LNG regasification terminal, with an output of 500 million m3 in 2009. In 2010, alternative renewable energy (ARE) sources accounted for 4.2% of the SICs matrix, represented principally by wind projects (325 GWh).

Increased installed capacity

A moderate rise in investment in installed capacity in 2009 has been followed by a sustained increase in new projects. Generation in the SIC rose by 3.5% in 2010 to 43,226 GWh while the SING saw an increase of 1.2% to 15,986 GWh, according to their respective Load Dispatch Centers (CDEC).

In view of the number of generation and transmission projects in the SIC that have obtained a positive Environmental

La importante participacin de la hidroelectricidad dentro de la generacin elctrica en Chile siempre ha implicado un elemento de riesgo en el abastecimiento, debido a la variabilidad en la hidrologa. Los antecedentes hidrolgicos de las ltimas dcadas muestran que la disponibilidad de recursos para generacin hdrica alcanza a los 30.000 GWh en un ciclo lluvioso, pero puede caer a un tercio de ese nivel en uno seco.

A partir de 1998, el gas natural fue introducido en el pas como alternativa al carbn, y alcanz un peak de generacin de 36% en el 2004, para luego caer debido a los recortes en el abastecimiento desde Argentina. Esto, adems, coincidi con un perodo de sequa, gatillando un incremento en el uso de derivados del petrleo, particularmente diesel, y la reconversin por parte de las generadoras de las plantas originalmente diseadas para gas natural a un sistema dual, as como inversiones en capacidad de operacin de emergencia con diesel.

Las restricciones en el abastecimiento de gas tambin se tradujeron en nuevas inversiones en capacidad de generacin a travs de carbn. Sin embargo, el uso de gas para la generacin elctrica volvi a aumentar en 2009, elevndose cerca de un 70% en relacin al ao anterior. Esto debido a la entrada en operacin del Terminal de Regasificacin de GNL de Quintero, que produjo cerca de 500 millones de m3 durante el 2009. En el 2010, el aporte de generacin de las Energas Renovables No Convencionales (ERNC) lleg al 4,2% del SIC, gracias al alza del soporte elico (325 GWh).

Para hacer frente a ambas dificultades, tanto las restricciones de envo de gas, como los aos secos, se increment la generacin con derivados de petrleo, especialmente diesel. Esto fue posible por las inversiones en dualizacin de las centrales originalmente diseadas para funcionar utilizando gas natural, as como a la inversin en turbinas y grupos electrgenos.

Mayor capacidad instalada

El moderado incremento de las inversiones en la capacidad instalada en 2009, ha dado paso a un

Qualification Resolution (RCA) from the Environmental Impact Evaluation System (SEIA) and are under construction, electricity supply in this grid is expected to show an important increase over the next few years.

sostenido aumento en los nuevos proyectos. La generacin elctrica en el SIC experiment un alza del 3,5% en 2010 a 43.226 GWh, mientras que en el SING aument un 1,2% a 15.986 GWh, segn cifras del Centro de Despacho Econmico de Carga (CDEC).

Considerando la cantidad de proyectos de generacin y transmisin en construccin en el SIC que han obtenido una Resolucin de Calificacin Ambiental (RCA) positiva en el Sistema de Evaluacin de Impacto Ambiental (SEIA), se estima que la oferta elctrica tendr un aumento importante en los prximos aos.

Starting date Generation projects CapacityMonth Year MW

May 2011 La Higuera (*) 153May 2011 Confluencia (*) 159June 2011 Punta Colorada Wind Farm 20June 2011 Quemchi 3August 2011 Los Colorados 2 10November 2011 Bocamina 02 342December 2011 Chacayes 106December 2011 Santa Mara 343March 2012 Rucatayo 60March 2012 Viales 32April 2012 Laja I 36.8June 2012 San Andrs 40August 2012 Pulelfu 9.4March 2013 Campiche 242December 2013 Angostura 316June 2014 San Pedro 144

Starting date Transmission projects (**) CapacityMonth Year MVA

April 2011 Polpaico Substation: installation of second autotransformer (500/220 kV) 750August 2011 Nogales-Polpaico Line (2x220 kV) 2x1,500October 2011 A. Jahuel-Chena Line (220 kV): change of conductor 400October 2011 Section of Chena-Cerro Navia Line (2x220 kV): change of conductor 2x400January 2012 Ancoa-Polpaico Line (1x500 kV): sectioning April 2012 Entry line to A. Jahuel (2x500 kV) 2x1,800April 2012 Cerro Navia Substation: installation of flow control equipment 2x350July 2013 Ancoa-A. Jahuel Line (2x500 kV): first circuit 1,400July 2013 Charra Substation (500/220 kV): 3rd autotransformer bank 750

Projects under Construction in the SIC, 2011-2014 (By starting date)

Instalaciones en construccin en el SIC, 2011-2014 (Por mes de inicio)

(*) Plants currently undergoing start-up tests. (**) Also includes trunk transmission infrastructure for which construction contracts have been awarded. Source: Node Price Report, National Energy Commission (www.cne.cl).


16 17

Sources of supply

The preponderance of imported energy sources renders Chile vulnerable not only to a supply risk but also to the impact of increases and volatility in international prices.

Prices

The cost of imported conventional energy sources tends to reflect variations in international prices and, in the case of oil derivatives (gasoline, kerosene, diesel and liquefied gas), has shown very significant increases. During the recent international crisis, the prices of liquid fuels dropped sharply but, since April 2010, have tended to return to their pre-crisis levels.

Fuentes de suministro

La presencia preponderante de fuentes energticas importadas somete al pas a una exposicin importante no slo por riesgo de suministro, sino tambin al impacto de alzas y volatilidad de los precios internacionales.

Evolucin de los precios

Los precios de las fuentes convencionales importadas suelen reflejar las variaciones en los precios internacionales y, en el caso de los derivados del petrleo (gasolina, kerosn, diesel y gas licuado), han llegado a mostrar alzas muy significativas. Durante la reciente crisis internacional, los precios de los combustibles tuvieron una fuerte cada pero, a partir de abril de 2010, han apuntado a recuperar sus niveles pre-crisis.

Crude Oil Imports, 2010(By country of origin)

Importacin de Crudo 2010 (Por pas de origen)

Source: National Energy Commission (www.cne.cl).

Colombia16%

Ecuador14%

United Kingdom12%

Brazil31%

Argentina24%

Peru3%

Coal Imports, 2010(By country of origin)

Importacin de Carbn 2010 (Por pas de origen)

Source: National Energy Commission (www.cne.cl).

United States23%

Colombia49%

Indonesia11%

Australia14%

Canada3%

LNG Imports, 2010 (By country of origin)

Importacin de Gas Natural Licuado 2010 (Por pas de origen)


Others6%

Qatar8%

Algeria6%

Trinidad & Tobago22%

Guinea39%

Egpyt13%

Equatorial Guinea6%


18 19

The marginal cost of electricity in Chile has also shown an important increase in recent years, due to the relative scarcity of water and gas as well as the higher price of the primary energy sources with which they were replaced. After peaking in early 2008, when a severe drought was aggravated by operating problems at a number of plants in the SIC and extensive use of diesel was required, it has stabilized at an average of US$100/MWh, reflecting the replacement of diesel by coal and gas. In 2010, the marginal generating cost (CMg) in the SIC averaged US$138/MWh and, in the SING, US$122/MWh.

Market structure

Electricity

Chiles electricity industry comprises three distinct activities: generation, transmission and distribution. These are developed by private companies while the State, independently of its subsidiary role, regulates and supervises the industry and provides investment recommendations for generation and transmission, principally through the National Energy Commission (CNE), the Electricity and Fuels Superintendency (SEC) and the Energy Ministry.

The generation segment is formed by the electricity companies owning the countrys power plants. Within this segment, there are two distinct markets: spot and contract. In the former, the generators trade electricity while, in the latter, transactions are between

El costo marginal elctrico tambin ha exhibido un alza significativa en los ltimos aos, debido a la escasez relativa de agua y de gas, as como al aumento en los precios de los energticos primarios que los reemplazaron en la matriz de generacin. Luego de un peak de precio a comienzos de 2008, debido a una profunda sequa que se agrav con la indisposicin de importantes centrales en el SIC y que oblig a suplir la demanda en un alto porcentaje en base a diesel, el precio de la energa se estabiliz en un valor promedio de 100 USD/MWh tras reemplazarse el diesel por carbn y gas. Durante 2010, los costos marginales de generacin (CMg) en el SIC promediaron los 138 por USD/MWh y en el SING llegaron a los 122 USD/MWh.

Estructura del mercado

Elctrico

El mercado elctrico en Chile comprende tres actividades: la generacin, la transmisin y la distribucin. Estas actividades son desarrolladas por empresas privadas, mientras el Estado, independiente de su rol subsidiario, regula y supervisa la industria y entrega orientacin de inversiones en generacin y transmisin, esencialmente a travs de la Comisin Nacional de Energa (CNE), la Superintendencia de Electricidad y Combustibles (SEC) y el Ministerio de Energa (Minenerga).

El segmento de generacin est constituido por el conjunto de empresas elctricas propietarias de centrales generadoras. Se pueden distinguir dos mercados en este segmento: el spot y el de contratos. El primero corresponde a los generadores elctricos y el segundo se establece

Price of Oil Derivatives, 2000-2010 (Santiago Region)Evolucin de precios de derivados del petrleo, 2000-2010 (Regin Metropolitana)

90

80

70

60

50

40

30

20

10

Source: Energy Ministry (www.minenergia.cl) based in information from National Energy Commission (www.cne.cl).

95-octane gasoline Kerosene Liquefied gasDiesel

Jan

- 00

May

- 00

Sep

- 00

Jan

- 01

May

- 01

Sep

- 01

Jan

- 02

May

- 02

Sep

- 02

Jan

- 03

May

- 03

Sep

- 03

Jan

- 04

May

- 04

Sep

- 04

Jan

- 05

May

- 05

Sep

- 05

Jan

- 06

May

- 06

Sep

- 06

Jan

- 07

May

- 07

Sep

- 07

Jan

- 08

May

- 08

Sep

- 08

Jan

- 09

May

- 09

Sep

- 09

Jan

- 10

May

- 10

Sep

- 10

Marginal Electricity Costs, 2006-2010 (SIC and SING)Evolucin de los Costos Marginales de los Sistemas Elctricos, 2006-2010 (SIC y SING)

350

300

250

200

150

100

50

0


Jan

- 06

Feb

- 06

Mar

- 0

6Ap

r -

06M

ay -

06

Jun

- 06

Jul

- 06

Aug

- 06

Sep

- 06

Oct

- 06

Nov

- 06

Dec

- 06

Jan

- 07

Feb

- 07

Mar

- 0

7Ap

r -

07M

ay -

07

Jun

- 07

Jul

- 07

Aug

- 07

Sep

- 07

Oct

- 07

Nov

- 07

Dec

- 07

Jan

- 08

Feb

- 08

Mar

- 0

8Ap

r -

08M

ay -

08

Jun

- 08

Jul

- 08

Aug

- 08

Sep

- 08

Oct

- 08

Nov

- 08

Dec

- 08

Jan

- 09

Feb

- 09

Mar

- 0

9Ap

r -

09M

ay -

09

Jun

- 09

Jul

- 09

Aug

- 09

Sep

- 09

Oct

- 09

Nov

- 09

Dec

- 09

Jan

- 10

Feb

- 10

Mar

- 1

0Ap

r -

10M

ay -

10

Jun

- 10

Jul

- 10

Aug

- 10

Sep

- 10

Oct

- 10

Nov

- 10

Dec

- 10

Monthly average SIC Quillota 220 (US$/MWh) Monthly average SING Crucero 220 (US$/MWh)

CMg

(US$

/ M

Wh)

CMg

(US$

/ M

Wh)

Peso

s/ Th

ousa

nd Kc

al$/

Mile

s de

Kcal


20 21

generators and large final power users (manufacturers, mining companies and others) or companies holding distribution concessions.

According to the latest figures, 52 companies generate electricity in the SIC but three groups account for close to 75% of its capacity. In the SING, there are 11 companies and three groups also predominate, representing 94% of its installed capacity.

The transmission segment comprises the companies owning infrastructure for the transport of power from generators to centers of consumption. The system is, in turn, divided into trunk transmission, subtransmission and additional transmission. The first two are defined as a public service and companies must, therefore, provide service to all who request it and are responsible for investing in new installations or expansions. Companies providing additional transmission are, however, only obliged to provide third-party access when their system uses fiscal property for public use.

Trunk transmission and subtransmission tariffs are regulated on the basis of four-yearly studies. In the case of trunk transmission, investments defined as necessary on the basis of these studies are compulsory.

The distribution segment is formed by the electricity companies owning infrastructure for the distribution of power to the final consumers located in specific geographic areas. Distribution companies operate under a concessions regime, with an obligation to provide service, and are subject to tariff regulation.

In the SIC, a total of 28 distributors serve some 4.7 million clients while, in the SING, there are four distributors for 280,000 clients.

entre generadores y grandes consumidores finales (industriales, mineros y comerciales), o con las empresas concesionarias de distribucin.

Segn los ltimos registros, 52 empresas inyectan energa al SIC, pero tres holdings poseen cerca del 75% de su capacidad. En el SING operan 11 empresas y nuevamente tres holdings dominan el 94% de su capacidad instalada.

El segmento de transmisin est constituido por las empresas propietarias de infraestructura para el transporte de electricidad desde los generadores hasta los centros de consumo. El sistema est, a su vez, dividido en transmisin troncal, subtransmisin y transmisin adicional. Las dos primeras son definidas como servicio pblico, por lo que las empresas tienen la obligacin de dar servicio a quien lo solicite, y son responsables de invertir en nuevas instalaciones o en ampliaciones de las mismas. Las empresas que entregan transmisin adicional, en cambio, slo tienen la obligacin de dar acceso a terceros cuando utilizan en su trazado bienes nacionales de uso pblico.

La tarificacin de los segmentos troncal y subtransmisin es regulada mediante estudios cuatrianuales. Para el caso del sistema de transmisin trocal, las inversiones definidas como necesarias en base a estos estudios son obligatorias de realizar.

El segmento de distribucin est conformado por el conjunto de empresas elctricas propietarias de instalaciones destinadas a distribuir la electricidad hasta los consumidores finales localizados en zonas geogrficas delimitadas. Las empresas de distribucin operan bajo un rgimen de concesin, con obligacin de servicio y tarifas reguladas.

En el SIC operan 28 empresas que abastecen a unos 4,7 millones de clientes, mientras que en el SING lo hacen cuatro empresas para 280 mil clientes.

In the Aysn and Magallanes Regions, there are only two companies and one company, respectively, which participate in the generation, transmission and distribution segments and serve 85,000 clients.

Hydrocarbons

Oil

The oil wells currently in operation in Chile are located in the Magallanes Basin and correspond to three areas of mixed oil and gas production. Natural depletion of these wells, which mostly started production in the 1960s, meant a gradual decrease in annual output. This situation, however, began to change as from 2007-2008 due to renewed prospection, carried out both directly by the Empresa Nacional del Petrleo (ENAP), the state oil company, and through Special Operating Contracts (CEOPs) awarded to private companies. In some cases, CEOPs are being developed as a partnership between a private company and ENAP.

Most of the crude oil used in Chile is imported by ENAP and is processed in its refineries. Although there is free access to the oil refining sector, all the countrys three refineries belong to ENAP. These are the Aconcagua Refinery in the Valparaso Region with a primary crude processing capacity of 16,000 m3/day, the Biobo Refinery in the Biobo Region with a processing capacity of 18,500 m3/day, and the Gregorio Refinery in the Magallanes Region with a capacity of 2,800 m3/day. The output of these refineries accounts for between 75% and 85% of the countrys normal fuel needs.

Infrastructure for liquid fuels comprises storage plants, port terminals and oil pipelines. Within Chile, products are transported by sea from terminals located in the Antofagasta, Valparaso, Biobo and Magallanes Regions to

En las regiones de Aysn y Magallanes existen nicamente dos empresas y una compaa, respectivamente, participando en los segmentos de generacin, transmisin y distribucin y abastecen a 85 mil clientes.

Hidrocarburos

Petrleo

Los yacimientos petrolferos explotados actualmente en Chile estn ubicados en la Cuenca de Magallanes, en tres zonas con produccin mixta de petrleo y gas. El agotamiento natural de los yacimientos, puestos en produccin principalmente en los 60, se ha traducido en una disminucin paulatina en su produccin anual. Esta situacin ha comenzado a revertirse desde 2007-2008, debido a un reimpulso de la actividad exploratoria de hidrocarburos, efectuada tanto por la Empresa Nacional del Petrleo (ENAP) como mediante la modalidad de Contratos Especiales de Operacin (CEOPs) con empresas privadas. En algunos casos, el contratista es una sociedad entre un privado y la ENAP.

La mayor parte del crudo utilizado en Chile es importado por ENAP y procesado en sus refineras. Aunque existe libertad de ingreso al sector de refinacin, las tres refineras existentes pertenecen a ENAP. Estas son la Refinera Aconcagua ubicada en la Regin de Valparaso con una capacidad de procesamiento primario de crudo de 16.000 m3/da, La Refinera Bo-Bo, emplazada en la Regin del Bo-Bo y con una capacidad de procesamiento de 18.500 m3/da, y la Refinera Gregorio, ubicada en la regin de Magallanes (Refinera Gregorio), que cuenta con una capacidad de 2.800 m3/da. La produccin de estas refineras permite cubrir entre el 75% y el 85% de las necesidades normales de productos combustibles.

La infraestructura para combustibles lquidos est constituida por plantas de almacenamiento, terminales martimos y oleoductos. Dentro del pas, los productos son transportados por medio de cabotaje martimo desde los terminales ubicados


22 23

Final sale of liquid fuels takes place through 1,600 service stations around the country as well as through direct sale to large industrial clients. In the case of liquefied petroleum gas (LPG), the distribution and marketing network reaches the household level, supplying canisters (of between five and 45 kilos) through a door-to-door and bulk system as well as through industrial distribution.

La comercializacin final de combustibles lquidos se realiza a travs de las 1.600 estaciones de expendio en todo el pas, as como por venta directa a grandes clientes industriales. En el caso del Gas Licuado del Petrleo (GLP), existe una red de distribucin y comercializacin que llega a nivel residencial con cilindros (de entre 5 y 45 kilogramos), con un sistema de puerta a puerta y granel, adems de la distribucin industrial.

Gas

Chile has natural gas reserves in the Magallanes Region and, since the mid-1990s, has also imported gas from Argentina through cross-border pipelines. The basic infrastructure comprises five separate pipeline systems in the Antofagasta, Valparaso, Santiago, OHiggins and Biobo Regions and seven companies operate gas distribution networks.

After reaching its peak in 2004, the supply of gas from Argentina dropped dramatically and, by 2008, was running at less than a tenth of its level in 2004. However, following the start of operations of the Quintero LNG regasification terminal in central Chile in September 2009 and the Mejillones terminal in the north in March 2010, consumption of natural gas has again increased.

Gas

Chile posee gas natural en la regin de Magallanes, y desde mediados de los 90, tambin importa gas desde Argentina a travs de gasoductos internacionales. Su infraestructura bsica est constituida por gasoductos en cinco sistemas aislados en las regiones de Antofagasta, Valparaso, Metropolitana, OHiggins y Bo-Bo. Siete empresas operan las redes de distribucin de gas.

Despus del peak de importaciones del ao 2004, el suministro argentino fue decreciendo drsticamente y ya en 2008 llegaba a un dcimo del nivel de 2004. Sin embargo, y luego del comienzo de las operaciones de los terminales de regasificacin de GNL de Quintero en la zona central, en septiembre de 2009 y Mejillones en el norte, en marzo de 2010, el consumo de gas natural se ha recuperado.

en las regiones de Antofagasta, Valparaso, Bo Bo y Magallanes, hacia los otros puertos nacionales, y por medio de ductos que interconectan las refineras de la Regin de Valparaso y la Regin de Bo Bo con la Regin Metropolitana. Adicionalmente existen algunas plantas de almacenamiento intermedio. Las principales empresas presentes en el mercado nacional de distribucin de derivados de petrleo son ocho, cuatro en combustibles lquidos y cuatro en gas licuado.

other ports and by pipelines connecting the Santiago Region with the refineries in the Valparaso and Biobo Regions. In addition, there are some intermediate storage plants. Eight main companies operate in the oil derivates distribution market, four in the liquid fuel market and four in the liquefied gas market.

Crude Oil Production and Imports, 1990-2009 (In teracalories)

Evolucin de la Produccin e Importaciones de Crudo, 1990-2009 (En teracaloras)


1996199519941993199219911990 1997 1998 1999 2004 2001 2002 2003 2005 2006 20092007 20082004

Production Imports

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Tcal Natural Gas Production and Imports, 1990-2009

(In teracalories)Evolucin de la Produccin e Importaciones de Gas Natural, 1990-2009

(En teracaloras)


1996199519941993199219911990 1997 1998 1999 2004 2001 2002 2003 2005 2006 20092007 20082004

Production Imports

70,000

60,000

50,000

40,000

30,000

20,000

10,000

Tcal


24 25

Mineral coal

Chile consumes over 39,946 teracalories of mineral coal of which 90% is imported. Local production has been declining and, between 1991 and 2009, showed a drop of around 76%.

The main coal users are electricity generators which account for 86% of imports. Domestic supply is led by the state-owned Empresa Nacional del Carbn (ENACAR) which, through its operations in Lebu, markets the output of small and micro-producers in the Biobo Region to industrial users.

Carbn Mineral

Chile consume ms de 39.946 teracaloras de carbn mineral, de las cuales el 90% corresponde a importaciones. La produccin local ha decado y, entre 1991 y 2009, registr una reduccin cercana al 76%.

Los principales consumidores de carbn son las generadoras de energa elctrica, responsables del 86% de las importaciones. La produccin nacional es encabezada por la estatal Empresa Nacional del Carbn (ENACAR) que, a travs de sus operaciones en Lebu, comercializa la produccin de la pequea y micro minera de la Regin del Bo-Bo entre consumidores industriales.

Coal Production and Imports, 1990-2009 (In teracalories)

Evolucin de la Produccin e Importaciones de Carbn, 1990-2009 (En teracaloras)


1996199519941993199219911990 1997 1998 1999 2004 2001 2002 2003 2005 2006 20092007 20082004

Production Imports

70,000

60,000

50,000

40,000

30,000

20,000

10,000

Tcal


26 27Several factors explain our decision to invest in Chile: the nature of the assets available in the infrastructure sector, the

stability of the regulatory framework in its respect for the owner of assets,

the stability of the political system, the integrity and work ethic of Chileans and

the rule of law.

Pesan varios factores sobre nuestra decisin de invertir capital en Chile:

la naturaleza de los activos que pueden adquirirse en el sector de

infraestructura, la estabilidad del marco regulatorio en su respeto al dueo de los activos, la estabilidad del sistema

poltico, la integridad y tica laboral de los chilenos y la existencia del Estado de

Derecho.

Jeffrey BlinderSenior Managing Partner.

Brookfield Asset Management Inc.

Institutional structure: regulation and the environment Estructura institucional: regulaciones y medioambiente

A number of institutions play a role in regulating and supervising the energy sector:

En la rectora, regulacin y fiscalizacin del sector energtico, participan diversos actores institucionales:

Energy Ministry (www.minenergia.cl). The maximum body for supporting the President of the Republic in governing and managing the energy sector, it is responsible for drawing up and coordinating plans, policies and norms for the sectors proper operation and development, ensuring compliance with these plans, policies and norms, and advising the government on all matters related to energy. Ministerio de Energa (www.minenergia.cl). El organismo superior que apoya al Presidente de la Repblica en las funciones de gobierno y administracin del sector energtico. Debe elaborar y coordinar los planes, polticas y normas para el buen funcionamiento y desarrollo del sector, velar por su cumplimiento y asesorar al Gobierno en todas aquellas materias relacionadas con la energa.

National Energy Commission (CNE) (www.cne.cl). A decentralized public service, it is responsible for analyzing the prices, tariffs and technical norms to which companies producing, generating, transporting and distributing energy must adhere in order to ensure a sufficient, secure and high-quality service compatible with lowest-cost operation. La Comisin Nacional de Energa (CNE) (www.cne.cl). Servicio pblico descentralizado encargado de analizar precios, tarifas y normas tcnicas a las que deben ceirse las empresas de produccin, generacin, transporte y distribucin de energa, con el objeto de disponer de un servicio suficiente, seguro y de calidad, compatible con la operacin ms econmica.

Mining Ministry (www.minmineria.gob.cl). This Ministry has powers in the definition of policies, plans and norms relating to hydrocarbons, nuclear energy and geothermal energy.

Ministerio de Minera (www.minmineria.gob.cl). Este ministerio posee competencias en la definicin de polticas, planes y normas en materia de hidrocarburos, energa nuclear y geotermia.

Electricity and Fuels Superintendency (SEC) (www.sec.cl). A decentralized public service, it is responsible for inspecting and supervising compliance with norms on liquid fuels, gas and electricity.

Superintendencia de Electricidad y Combustibles (SEC) (www.sec.cl). Es un servicio pblico descentralizado, cuya funcin es fiscalizar y supervigilar el cumplimiento de las normas sobre combustibles lquidos, gas y electricidad.

Chilean Nuclear Energy Commission (CCHEN) (www.cchen.cl). A decentralized public service, it is responsible for the development of nuclear science and technology as well as for the production, acquisition, transfer, transport and pacific use of atomic energy.

Comisin Chilena de Energa Nuclear (CCHEN) (www.cchen.cl). Es un servicio pblico descentralizado, responsable del desarrollo de la ciencia y la tecnologa nuclear. Se ocupa de la produccin, adquisicin, transferencia, transporte y uso pacfico de la energa atmica.


28 29

Regulatory framework

Generation

The regulatory model for the generation segment is based on the principle that investments are the result of private initiatives undertaken in response to the economic signals provided by the market. In line with this, reference prices are set twice a year and are adjusted through index-linking. Under the regulation in force, concessions or special permits are not required for the installation of generating units or their ancillary infrastructure and they must only obtain the authorizations required for any industrial installation, including the corresponding environmental permits, and comply with the Technical Safety and Service Quality Norm (NTSyCS) for their connection to the grid.

Transmission

Transmission infrastructure is divided into three categories: the trunk system, which is of common use; subtransmission systems, which supply distribution concession areas; and, the so-called additional systems, which supply only a few clients not subject to price regulation.

Transmission infrastructure may, but not necessarily, take the form of a concession. In the former case, all the administrative formalities required to bring it on line are facilitated. By decree, trunk transmission companies are responsible for expansions of their infrastructure and must tender its construction to companies qualified under mechanisms that are open and can be audited by the SEC.

Marco regulatorio

Generacin

El modelo regulatorio del segmento de generacin del sector elctrico se basa en el principio de que las inversiones nacen a partir de la iniciativa de privados como respuesta a las seales econmicas que entrega el mercado. Acorde a esto, los precios de referencia del sector son fijados dos veces al ao y se actualizan va indexaciones. La normativa vigente no exige una concesin ni un permiso especial para la instalacin de unidades de generacin ni de sus obras anexas, slo deben obtener las autorizaciones a las que est sujeta cualquier instalacin industrial, incluidos los permisos ambientales correspondientes y cumplir con las exigencias de la Norma Tcnica de Seguridad y Calidad de Servicio (NTSy CS) para su conexin a la Red.

Transmisin

La infraestructura para la transmisin se divide en tres categoras: las que conforman el Sistema Troncal, o de uso comn; las que conforman los sistemas de Subtransmisin, que abastecen las zonas de distribucin; y las que constituyen los llamados sistemas adicionales, de uso restringido al servicio de pocos clientes no sometidos a regulacin de precios.

Las instalaciones de transmisin pueden ser concesionadas o no. En el primer caso, se facilita todas las tramitaciones administrativas requeridas para su puesta en servicio. Las empresas de transmisin en el sistema troncal son, por decreto, responsables de realizar las obras de ampliacin, debiendo licitar la construccin de las obras a empresas calificadas a travs de mecanismos abiertos y auditables por la SEC.

Distribucin

Las instalaciones de distribucin elctrica pueden ser establecidas, operadas y explotadas slo mediante una Concesin de Servicio Pblico. Esta puede ser provisional o definitiva y se solicita a la SEC o al Ministerio de Energa, respectivamente. No obstante, las operaciones de servicio pblico, como el alumbrado pblico, no requieren una solicitud de concesin.

Hidrocarburos

El modelo regulatorio del sector de los hidrocarburos se sostiene sobre la propia Constitucin Poltica de Chile, que pone en dominio exclusivo del Estado su propiedad. Se puede obtener concesiones para la exploracin y explotacin de depsitos de carbn, pero los hidrocarburos lquidos y gaseosos deben ser explotados directamente por el Estado o sus empresas por medio de Contratos Especiales de Operacin Petrolera (CEOP) con firmas privadas. La regulacin establece libertad de emprendimiento en refinacin, distribucin, comercializacin, almacenamiento y transporte.

Gas de red

El transporte y distribucin de gas de red requieren una concesin, la que exige la continuidad de suministro. Las empresas tienen la obligacin de dar acceso abierto a su capacidad remanente disponible pero son libres para elegir sus tarifas.

Normas medioambientales

La herramienta reguladora bsica para el desarrollo sustentable de los proyectos energticos es el Sistema de Evaluacin de Impacto Ambiental (SEIA). La ley chilena establece que todos los proyectos de inversin y/o las modificaciones de consideracin de stos, deben someterse a un proceso de evaluacin respecto de sus impactos y cumplir con las normas ambientales. De obtener una Resolucin de Calificacin Ambiental, podrn implementar el proyecto sujeto a las condiciones que

Distribution

Distribution infrastructure can be installed, operated and exploited only under a Public Service Concession. This may be provisional or definitive and is granted by the SEC or the Energy Ministry, respectively. However, public service activities, such as street lighting, do not require a concession.

Hydrocarbons

The regulatory model for the hydrocarbons sector has its root in Chiles political constitution which reserves their ownership to the State. Concessions may be awarded for the exploration and/or exploitation of coal deposits but liquid and gaseous hydrocarbons must be exploited directly by the State or state-owned companies or through Special Operating Contracts (CEOPs) awarded to private companies. The refining, distribution, marketing, storage and transport of hydrocarbons are not, however, subject to restrictions.

Gas distribution networks

Gas transport and distribution networks, however, require a concession that stipulates supply continuity. Companies are, moreover, obliged to provide open access to their spare capacity but are free to set their tariffs.

Environmental regulation

The basic regulatory tool for the sustainable development of energy projects in Chile is the Environmental Impact Evaluation System (SEIA). Under Chilean law, all investment projects and/or their significant modification must submit to a process of evaluation of their impacts and compliance with environmental norms. On obtaining a favorable Environmental Qualification Resolution (RCA), they may implement the project subject to


30 31

the conditions it establishes.

The following types of energy projects are subject to evaluation of their environmental impact:

dicha resolucin establezca.

Se deben someter a evaluacin de impacto ambiental los siguientes tipos de proyectos del sector de energa:

High-voltage transmission lines and their substations. Lneas de transmisin elctrica de alto voltaje y sus subestaciones.

Generating plants with a capacity of more than 3 MW.Centrales generadoras de energa mayores a 3 MW.

Nuclear reactors and installations and their related facilities.Reactores y establecimientos nucleares e instalaciones relacionadas.

Fuel port terminals.Terminales martimos de combustibles.

Mining exploration and exploitation projects including coal, oil and gas. Proyectos de desarrollo minero incluidos carbn, petrleo y gas, tanto prospecciones como explotaciones.

Oil, gas, mining and other similar pipelines.Oleoductos, gasoductos, ductos mineros u otros anlogos.

Habitual production, storage, transport, disposal or reuse of toxic, explosive, radioactive, inflammable, corrosive or reactive substances.Produccin, almacenamiento, transporte, disposicin o reutilizacin habituales de sustancias txicas, explosi-vas, radioactivas, inflamables, corrosivas o reactivas.

Projects, programs or activities in national parks or reserves, virgin areas, nature sanctuaries, marine parks or other officially protected areas, if permitted under the law.Ejecucin de obras, programas o actividades en parques nacionales, reservas, monumentos, zonas vrgenes, santuarios de la naturaleza, parques marinos u otras reas protegidas oficialmente si la legislacin lo permite.

Chile ha suscrito la mayora de los protocolos y acuerdos internacionales que buscan proteger al medio ambiente. Estos incluyen la Convencin Marco de Naciones Unidas para el Cambio Climtico y el Protocolo de Kyoto.

Chile has signed most international protocols and agreements on protection of the environment. These include the UN Framework Convention on Climate Change and the Kyoto Protocol.


32 33

Alternative Renewable Energy (ARE) Energas Renovables No Convencionales (ERNC)

Renewable energy is defined as energy obtained from natural sources that are inexhaustible over a human timescale, are not fossil fuels or have the capacity for replenishment. Specifically, it comprises hydraulic, eolic, solar, ocean and geothermal energy and that generated from biomass. Chile has long experience in the use of these sources, principally as regards hydroelectricity and, to a lesser extent, biomass.

Another group of renewable sources, known as Alternative Renewable Energies (AREs), corresponds to sources or combinations of sources and technologies that are not yet widely used in Chile. These are also known internationally as new energy sources and, in general, have significantly less environmental impact than traditional sources for generating electricity.

In Chile, Law N 20.257 defined ARE projects as those having an installed capacity of up to 40 MW. This definition excludes large hydroelectric projects which, although using a renewable source, are also conventional projects.

Looking to the future

Chiles goal today is to diversify its sources of energy supply in the medium to long term. Under this strategy, it is seeking to achieve a certain level of independence, developing domestic sources and, in line with international trends, fostering the use of

Las fuentes de energa renovable se definen como aquellas obtenidas de fuentes naturales inagotables a la escala de tiempo humana, no fsiles, o con capacidad de regenerarse. Se trata puntualmente de la energa hidrulica, elica, solar, martima, geotrmica y de biomasa. Chile tiene una larga experiencia en el uso de estas energas para generacin elctrica, fundamentalmente la hidrulica y, en menor medida, la biomasa.

Existe otro conjunto de fuentes renovables denominadas Energas Renovables No Convencionales (ERNC), las que corresponden a aquellas fuentes o combinaciones de fuentes de energa y de tecnologa, no extendidas en el pas. stas coinciden con las que internacionalmente suelen denominarse nuevas fuentes de energa, la mayora de las cuales tienen impactos ambientales considerablemente menores que las formas tradicionales de generacin elctrica.

En Chile, la Ley 20.257 estableci como ERNC a los proyectos de hasta 40 MW de capacidad instalada. La definicin anterior excluye los grandes proyectos hidroelctricos, los que si bien corresponden a fuentes renovables, son a la vez proyectos convencionales.

Mirada de futuro

Hoy Chile tiene como meta diversificar sus fuentes de suministro energtico en el mediano a largo plazo. Acorde a esta estrategia, el pas busca lograr un nivel de independencia, desarrollando fuentes nacionales y, acorde la tendencia internacional, fomentando el uso de energas limpias.

It will depend on how prices evolve but the potential for investment in solar energy is, in principle, almost

unlimited or, rather, it will be capped by the capacity of the electricity

system to absorb the energy. Obviously, this growth will take place

gradually over the next decade.

Habr que ver cmo evolucionan los precios, pero a priori el potencial de la inversin solar es casi ilimitado, o ms

bien, la limitacin vendr dada por la capacidad de acogida de energa

por parte del sistema elctrico de Chile. Y obviamente este crecimiento

ser progresivo durante la prxima dcada.

Jon SegoviaManaging partner.

Solarpack.


34 35

Regulatory improvements to eliminate barriers to ARE projects and foster their integration into energy markets.Perfeccionamiento de los marcos regulatorios para eliminar las barreras a los proyectos de ERNC y fomentar su integracin en los mercados energticos.

Development of instruments to promote and support investment in AREs. Desarrollo de instrumentos para promover y apoyar la inversin en ERNC.

Provision of information for investors (such as data on the potential of renewable sources and implementation and environmental evaluation manuals). Levantamiento de informacin para los inversionistas (como informacin sobre potenciales fuentes renovables y guas de implementacin y de evaluacin ambiental).

To this end, it needs to continue advancing in the following lines of work:

In recent years, the conditions for the development of AREs in Chile have improved significantly and this is reflected in the growing interest of local and overseas investors in projects of this type. Some projects, using wind energy and biogas, have already started operations in the SIC as well as small hydroelectric and biomass plants.

Installed capacity

At present, 63% of Chiles installed capacity is thermal while conventional hydroelectric plants account for 33.4% and the remainder uses alternative renewable sources. These comprise principally biomass plants, some small hydroelectric plants and wind farms.

Projects under development

Between 2007 and 2010, at least 30 ARE projects started operation, with particularly marked progress in the case of wind farms of which 175 MW have so far been installed in the SIC. A further 26 projects are currently seeking environmental approval and would represent an additional 800 MW.

Para tal efecto, se requiere avanzar en las siguientes lneas de trabajo:

En los ltimos aos, las condiciones para el desarrollo de las ERNC en Chile han mejorado significativamente, lo que se est traduciendo en un creciente inters de inversionistas nacionales y extranjeros en el desarrollo de proyectos de este tipo. Algunos proyectos que utilizan energa elica y biogs ya se han puesto en marcha en el SIC, as como centrales hidroelctricas pequeas y de biomasa.

Capacidad instalada

Actualmente, el 63% de la capacidad de generacin instalada en Chile corresponde a plantas trmicas, mientras que la energa hidrulica convencional alcanza a 33,4%. El resto corresponde a fuentes renovables alternativas, que incluyen principalmente centrales de biomasa, hidroelctricas pequeas y parques elicos.

Proyectos en desarrollo

Entre los aos 2007 y 2010, han entrado en operacin al menos 30 proyectos de ERNC, con un avance evidente en el caso de los parques elicos, que a la fecha totalizan 175 MW de capacidad instalada en el SIC. Unos 26 proyectos ERNC se encuentran en calificacin y, una vez aprobados, sumaran 800 MW adicionales.

Source: Energy Ministry (www.minenergia.cl) based on information from National Energy Commission (www.cne.cl).* For generators own consumption.

Installed Capacity of ARE Plants Larger than 1.5 MW (As of December 2010)Capacidad instalada de generacin elctrica de ERNC para sistemas elctricos mayores a 1,5 MW (A diciembre de 2010).

ARE 21.0 2.3 509.0 14.9 547.2 Biomass 206.5 206.5 Eolic 2.0 2.34* 160.5 164.8 ARE Hydro 19.0 142.0 14.9 175.9Conventional Hydro 5,199.8 5,199.8 Hydroelectricity 5,199.8 5,199.8Thermoelectricity 28.0 89.1 6,125.8 3,559.9 9,802.8 Thermoelectricity 28.0 89.1 6,125.8 3,559.9 9,802.8Total 49.0 91.4 11,834.6 3,574.9 15,549.8

Aysn Magallanes SIC SING TotalNet capacity (MW)

New ARE Capacity, 2007-2010Centrales ERNC que entraron en operacin, 2007-2010

Loma Los Colorados KDM Energa y Servicios S.A. Biogas PMGD 2 2Constitucin Energa Verde S.A. Biomass 11.05 2.35Laja Energa Verde S.A. Biomass 12.69 3.99Escuadrn (Ex Fpc) Elctrica Nueva Energa Biomass 15 15Nueva Aldea III Celulosa Arauco y Constitucin S.A. Biomass 37 12Canela 1 Central Elica Canela S.A. Eolic 18.2 18.2Canela 2 Central Elica Canela S.A. Eolic 60 60Cristoro Cristaleras Toro S.A.C.I Eolic PMGD 3.5 3.5Totoral NORVIND S.A. Eolic 46 46Monte Redondo Wind Farm Eolica Monte Redondo S.A. Eolic 38 38El Rincn Sociedad del Canal de Maipo Hydro PMGD 0.28 0.28Puclaro Hidroelectrica Puclaro S.A. Hydro PMGD 5.6 5.6El Manzano Hidroelectrica El Manzano S.A. Hydro 4.85 4.85Lircay Hidromaule S.A. Hydro 19 19Coya U5 Hidroelectrica Cachapoal S.A. Hydro 11 11Chiburgo Colbn S.A. Hydro 19.4 19.4Truful - Truful HIDROELEC S.A. Hydro PMGD 0.414 0.414Ojos de Agua ENDESA ECO S.A. Hydro 9 9Palmucho ENDESA Hydro 32 (1) 32 (1)El Trtaro wenke y CIA Limitada Hydro 0.13 0.13Guaycan Hydroelectric Plant Energa Coyanco S.A. Hydro 12 12La Paloma Hidropaloma S.A. Hydro PMGD 4.5 4.5Trueno Hidroelectrica Trueno S.A. Hydro 5.68 5.68Los Corrales SGA Hydro PMGD 0.8 0.8Alto Hospicio Enernuevas S.A. Hydro PMGD 1.1 1.1Toro 2 Enernuevas S.A. Hydro PMGD 1.1 1.1Hidroelectrica Dongo SPA Inversiones Navitas Holdings Hydro 6 6Mariposas hydroelectric plant Hidroelectrica Rio Lircay Hydro 6.3 6.3San Clemente plant Colbn S.A. Hydro 5.9 5.9Doa Hilda Ganadera y Forestal Carran Ltda. Hydro PMGD 0.525 0.525

Maximum installed capacity

(MW)

Recognized capacity

(MW)Primary energy source

Project TypeCompany

Source: CDEC-SIC Survey of Means of Generation Law N 20.257, Energy Ministry (www.minenergia.cl). (1) Real maximum potential, hydro plant of more than 20 MW; in ARE figures, a factor of 0.4 is applied to injections from this plant.


36 37

Generating potential

Chile has great potential not only for producing electricity in conventional hydroelectric plants, but also for the development of ARE sources. The increase in international fuel costs and domestic electricity prices, together with the maturing of different technologies, mean favorable conditions for the development of ARE projects. The ample opportunities available include mini-hydro, geothermal, biofuel and eolic initiatives, the use of solar thermal energy to heat water and, in the medium term, solar photovoltaic and thermoelectric projects.

Potencial de generacin

Chile no slo cuenta con un gran potencial para generar electricidad en centrales hidroelctricas convencionales, dispone tambin de muchas posibilidades para el desarrollo de ERNC. El alza de los costos de los combustibles en los mercados internacionales y de los precios internos de electricidad, junto con la maduracin tecnolgica de diversas tecnologas, confluyen en un escenario favorable para los proyectos ERNC. Las amplias oportunidades disponibles incluyen iniciativas en mini hidro, geotermia, biocombustibles, energa elica, el uso de energa trmica solar para calentamiento de agua y, en el mediano plazo, proyectos de energa solar fotovoltaica y solar termoelctrica.

Sources: (1) Studies of potential of irrigation infrastructure 2007-2010, CNE/CNR/MINENERGIA. (2) A. Lahsen, 1986 (Universidad de Chile). (3) Modeling of solar and eolic resources in the north of Chile, DGF/CNE. (4) Studies of Potential: Biogas, Forestry Biomass, Wood Waste, MINENERGIA. (5) Study Irradiancia Solar en Territorios de la Repblica de Chile, CNE/PNUD/UTFSM.

Potential ARE Capacity (By source) Potenciales de ERNC en MW (Por fuente)

Hydro ARE Tens of thousands of MW

Geothermal Tens of thousands of MW

Eolic Tens of thousands of MW

Biomass Thousands of MW

Biogas Thousands of MW

Solar Hundreds of thousands of MW

1,400

16,000

30,0002,8001,600

4705.5 million m3/solids

excluding bark

400

300,000

Gross theoretical potential associated to agricultural irrigation infrastructure (1)

Theoretical potential (2)

Far northCoquimbo RegionAtacama Region (3)

Forestry industry waste Wood industry (4)

(4)

Far north (5)

Order of magnitude Theoretical potential identified (MW)


38 39

Investment opportunities/Oportunidades de inversinRecommended projects

On the basis of its projections for electricity demand through to 2020, the National Energy Commission (CNE) recommends dates for the entry of new generation and transmission projects located principally in central and northern Chile. These recommendations take into account the aim of energy diversification as well as the countrys power needs.

Proyectos recomendados

Acorde a las proyecciones de la demanda hacia el ao 2020, la Comisin Nacional de Energa (CNE) recomienda un cronograma de entrada en vigencia de obras de generacin y transmisin concentrado en la zona centro-norte. Su ejercicio de planificacin de los sistemas elctricos considera los objetivos de diversificacin energtica y las necesidades de generacin del pas.

Source: Node Price Report, National Energy Commission (www.cne.cl).

Projected energy demand in SIC, 2010-2020 (In GWh)Proyeccin de consumo de energa SIC, 2010-2020 (Por GWh)

System 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SIC Norte 4,793 5,380 5,816 6,582 7,523 8,390 9,207 9,778 10,450 11,168 11,939

SIC Centro 23,716 25,150 26,685 28,085 29,407 30,848 32,396 34,238 36,037 37,923 39,898

SIC Itahue 3,392 3,510 3,734 3,923 4,155 4,393 4,626 4,876 5,142 5,422 5,715

SIC Concepcin 3,026 3,573 3,861 4,037 4,159 4,302 4,504 4,729 4,997 5,279 5,575

SIC SUR 2,743 2,792 2,908 2,999 3,093 3,201 3,343 3,507 3,700 3,904 4,118

SIC Austral 2,916 3,122 3,329 3,546 3,773 4,014 4,274 4,550 4,842 5,155 5,491

Total 40,587 43,528 46,332 49,181 52,110 55,149 58,349 61,679 65,168 68,850 72,737


Projected energy demand in SIC, 2010-2020 ( In percentage)Proyeccin de consumo de energa SIC, 2010-2020 ( Por porcentaje)

System 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

SIC Norte 10.9% 12.2% 8.1% 13.2% 14.3% 11.5% 9.7% 6.2% 6.9% 6.9% 6.9%

SIC Centro 7.1% 6.0% 6.1% 5.2% 4.7% 4.9% 5.0% 5.7% 5.3% 5.2% 5.2%

SIC Itahue -2.9% 3.5% 6.4% 5.3% 5.7% 5.7% 5.3% 5.4% 5.5% 5.4% 5.4%

SIC Concepcin -5.4% 18.1% 8.1% 4.6% 3.0% 3.5% 4.7% 5.0% 5.7% 5.6% 5.6%

SIC SUR -0.7% 1.8% 4.2% 3.1% 3.1% 3.5% 4.4% 4.9% 5.5% 5.5% 5.5%

SIC Austral 1.5% 7.1% 6.6% 6.5% 6.4% 6.4% 6.5% 6.4% 6.4% 6.5% 6.5%

Total 4.6% 7.2% 6.4% 6.1% 6.1% 5.8% 5.8% 5.7% 5.7% 5.7% 5.6%

We see enormous potential for the development of geothermal

energy in Chile, given its attractive geological conditions,

with some 360 volcanoes, and an estimated generating potential of between 3,000 and 16,000 MWe.

Vemos un enorme potencial en el desarrollo de la energa

geotrmica en Chile, que se basa en la atractiva configuracin

geolgica del pas ante la presencia de unos 360 volcanes

y un estimado de potencial de generacin que oscila entre 3.000

a 16.000 MWe.

Peter BarnettManaging Director.

Hot Rock Ltd.


40 41

The CNEs recommendations envisage the development of 59 generation projects in the SIC and the SING between 2012 and 2022 - which, in the case of the SIC, would total 6,310 MW - and 12 transmission projects between 2012 and 2017 for a total of 9,820 MVA.

Los proyectos recomendados por la CNE incorporan 59 obras de generacin en el SIC y el SING entre 2012 y 2022 -que, en el caso del SIC, totalizaran 6.310 MW de potencia en el sistema central- y 12 obras de transmisin entre 2012 y 2017, por un total de 9.820 MVA.


Recommended Generation Projects in SIC, 2012-2017 (By start-up date)Instalaciones recomendadas de generacin SIC, 2012-2017 (Por mes de inicio)

Sep 2012 Wind farm, Region IV 01 50Dec 2012 Hydroelectric plant, Region VI 01 40Jan 2013 Forestry waste plant, Region VIII 01 8Apr 2013 Hydroelectric plant, Region III 01 4.3Apr 2013 Wind farm, Concepcin 01 50Jul 2013 Forestry waste plant, Region VII 01 10Sep 2013 Hydroelectric plant, Region VII 01 30Mar 2014 Hydroelectric plant, Region VIII 01 20Apr 2014 Hydroelectric plant, Region VIII 02 136Jul 2014 Hydroelectric plant, Region VII 02 20Jul 2014 Wind farm, Region IV 02 50Apr 2015 Hydroelectric plant, Region VIII 03 20Jan 2016 Hydroelectric plant, Santiago Region 01 256Jan 2016 Wind farm, Concepcin 02 50Jan 2016 Geothermal plant, Calabozo 01 40Mar 2016 Geothermal plant, Chilln 01 40Mar 2016 Forestry waste plant, Region VIII 02 9Jul 2016 Hydroelectric plant, Santiago Region 02 275Apr 2017 Coal plant, Region VIII 01 343Dec 2017 Wind farm, Region IV 03 50Dec 2017 Geothermal plant, Calabozo 02 40Jul 2018 Quintero CC FA LNG 35Jul 2018 Quintero CC LNG 350Jul 2018 Wind farm, Concepcin 03 50Aug 2018 Wind farm, Region IV 05 50Sep 2018 Forestry waste plant, Region VII 03 15Oct 2018 Geothermal plant, Potrerillos 01 40Oct 2018 Forestry waste plant, Region VII 02 10Dec 2018 Wind farm, Concepcin 04 50Mar 2019 Wind farm, Region IV 04 50Aug 2019 Coal plant, Maitencillo 01 342Oct 2019 Hydroelectric plant, Region VII 03 20Oct 2019 Geothermal plant, Calabozo 03 40Nov 2019 Coal plant, Pan de Azcar 04 135Dec 2019 Wind farm, Region IV 06 50Aug 2020 Module 01 660Oct 2020 Wind farm, Concepcin 05 50Sep 2021 Coal plant, Maitencillo 02 342Oct 2021 Hydroelectric plant, Region VIII 04 20Nov 2021 Geothermal plant, Potrerillos 02 40Dec 2021 Module 02 500

Start-up dateMonth Year Capacity MW

Project


Recommended Generation Projects in SIC, 2012-2017 (By start-up date)Instalaciones recomendadas de generacin SIC, 2012-2017 (Por mes de inicio)

Sep 2012 Ancoa-Colbn Line (220 kV) 910Jul 2014 Lo Aguirre Sectioning Substation: stage 1 Aug 2015 Lo Aguirre-Cerro Navia Line (2x220 kV): capacity increase 1,800Jul 2016 Diego de Almagro-Cardones Line (2x220 kV): first circuit 290Jul 2016 Cardones-Maitencillo Line (2x500 kV) 1,500Jul 2016 Maitencillo-Pan de Azcar Line (2x500 kV) 1,500Jul 2016 Pan de Azcar-Polpaico Line (2x500 kV) 1,500Jul 2016 Charra-Ancoa Line (2x500 kV): first circuit 1,300Jan 2016 Ancoa-Itahue Line (1x220 kV) 400Apr 2016 Lo Aguirre Sectioning Substation: stage 2 Jan 2017 Cautn-Ciruelos Line (2x220 kV II) 330Jan 2017 Ciruelos-Pichirropulli Line (2x220 kV) 290

Start-up dateMonth Year Capacity MWA

Project


Recommended Generation Projects in SING, 2013-2022 (By start-up date)Instalaciones recomendadas de generacin SING, 2013-2022 (Por mes de inicio)

Sep 2013 Wind farm, SING I 100 Eolic Lagunas 220 2,300May 2016 Geothermal plant, Polloquere 01 40 Geothermal Chapiquia 066 3,550Jan 2017 Wind farm, SING II 40 Eolic Crucero 220 2,300Mar 2017 Tarapac I 200 Coal Tarapac 220 2,350Oct 2017 Tarapac II 200 Coal Tarapac 220 2,350Aug 2018 Mejillones I 200 Coal Chacaya 220 2,350Jan 2019 Geothermal plant, Pampa Lirima 01 40 Geothermal Cerro Colorado 110 3,550May 2019 Mejillones II 200 Coal Chacaya 220 2,350Nov 2019 Geothermal plant, Puchuldiza 01 40 Geothermal Cerro Colorado 110 3,550 Jan 2020 Mejillones III 200 Coal Chacaya 220 2,350Jan 2020 Geothermal plant, Apacheta 01 40 Geothermal Calama 110 3,550Jul 2020 Wind farm, SING III 50 Eolic Laberinto 220 2,300Sep 2020 Mejillones IV 200 Coal Chacaya 220 2,350Jan 2021 Geothermal plant, Irruputunco 40 Geothermal Collahuasi 220 3,550Jan 2021 Geothermal plant, Puchuldiza 02 40 Geothermal Cerro Colorado 110 3,550Mar 2021 Wind farm, SING IV 50 Eolic Laberinto 220 2,300Apr 2021 Tarapac III 200 Coal Tarapac 220 2,350Jan 2022 Geothermal plant, Apacheta 02 40 Geothermal Calama 110 3,550

SINGconnection

Unit investment

cost (US$/kW)

Net Capacity

MWStart-up date TypeProject


42 43

adems de 900 empleos directos y cerca de 1.200 empleos indirectos en etapa de operacin.

Potencial geotrmico

Chile se ubica en el llamado Cordn de Fuego del Pacfico y ms de 300 puntos de actividad volcnica han sido localizados en reas cercanas a la Cordillera de los Andes. De acuerdo con estimaciones tericas, su capacidad geotrmica bruta alcanzara los 16.000 MW. En la actualidad no existen plantas geotermales operando, sin embargo ya son varias las compaas que avanzan en proyectos de este tipo. La meta es comenzar la generacin en 2014.

Trmites necesarios

Actualmente existen dos vas para obtener una concesin de energa geotrmica, sea para un proyecto de exploracin como de explotacin:

Eolic agenda: joint efforts

At the end of 2010, as part of its efforts to contribute to meeting emissions reduction targets, the Energy Ministry signed a Framework Collaboration Agreement with the Ministry for Fiscal Properties to promote opportunities in wind energy. Under this Agreement, a survey was carried out to identify fiscal properties suitable for projects of this type and those with high potential were earmarked for the purpose.

The two Ministries went on to launch a public tender for the installation of wind farms on two of these properties. The first stage of this tender was completed in July 2011 and another similar tender is scheduled for the second half of the year.

Geothermal agenda: national priority

Given Chiles natural characteristics, geothermal energy is a particularly important ARE source with high potential. Its great advantages are its immunity to climatic variations, a high load factor (95%) and a marginal cost that is close to zero.

A very low level of CO2 emissions per MWh also makes it one of the worlds cleanest sources of electricity. Indeed, as compared to an equivalent amount of electricity generated from fossil fuels, it represents a 95% reduction in emissions of greenhouse gases. Moreover, the fluid extracted does not produce residues because it is injected back into the earth.

Chile offers excellent prospects for the development of this source. In addition, according to estimates by the California Energy Commission, the installation of 500 MW of geothermal generating capacity means on average some 2,000 new jobs during the construction phase and, during the

Agenda elica: trabajo conjunto

A fines de 2010, y como parte de sus esfuerzos para contribuir a las metas de reduccin de emisiones contaminantes, el Ministerio de Ene

chile oportunities in energy

Documents

foreign investment statute

entry of foreign investment

foreign investors

investment opportuniti

foreign direct investment

foreign relations

f o r e i g n i n v

state of chile