Chile launches its biggest wind farm By Gideon Long

BBC News, La Serena, Chile Published duration 27 August 2014

image copyright Antofagasta Minerals image caption South America is lagging behind the US and Europe in its development of renewable energy

Chile has inaugurated its biggest ever wind farm as part of its bid to wean itself off fossil fuels and tap its massive potential for renewable energy.

The El Arrayan farm is located on a coastal hillside 400km (250 miles) north of the capital Santiago.

Built at a cost of $300m (£180m), it consists of 50 giant turbines with an installed capacity of 115 megawatts.

But despite its size, it represents less than 1% of Chile's total electricity generating capacity.

The wind farm is small by the standards of Europe and the US but is one of the biggest in South America, which is only now starting to develop "green energy" in earnest.

image copyright Antofagasta Minerals image caption President Michelle Bachelet said she hoped the wind farm would act as a stimulus for green energy

Some 70% of the energy the farm generates will be used to power a large copper mine, Los Pelambres, in the Chilean Andes. The rest will be sold on the open market.

Jointly owned by US company Pattern Energy and Chilean mining giant Antofagasta Minerals, El Arrayan will provide Los Pelambres with 20% of its energy needs.

"This farm is a great example of collaboration between our mining industry and a clean-energy company," Chilean President Michelle Bachelet said as she inaugurated the farm on Tuesday.

"I hope this project acts as a powerful stimulus for other companies in the mining sector to start opting for this kind of energy."

Running on empty

Energy is a key issue in Chile.

Unlike almost every other major country in Latin America, the Andean nation produces virtually no oil and gas of its own.

It relies on hydro-electricity for a little over a third of its energy but imports most of the rest as fossil fuels.

image copyright Getty Images image caption Chile gets just over a third of its energy from hydro-electricity

In theory, Chile could buy natural gas from Bolivia, but the Bolivians refuse to sell it to Chile owing to a border dispute that dates back to the 19th Century.

For a while, the Chileans imported gas from Argentina through pipelines running through the Andes until the Argentines turned off the taps to feed their own domestic supply.

Chile considered nuclear power but the 2011 Fukushima disaster in Japan put paid to that idea.

Chile is every bit as prone to earthquakes and tsunamis as Japan.

Faced with these setbacks, the Chileans have turned to liquid natural gas (LNG) as an alternative to coal, building two terminals on their coast that allow them to import gas by sea from around the world.

But LNG is relatively expensive and so, increasingly, Chile is now trying to develop its non-conventional renewable energy sector.

Huge potential

The potential is enormous. The Atacama Desert in the north of the country is one of the driest, sunniest places on earth - perfect for solar energy.

image copyright Reuters image caption With virtually no rain, the Atacama is ideal for solar energy

Chile is also one of the most volcanic countries in the world, making geo-thermal power a viable option.

It has one of the longest coastlines in the world, with great potential for wave and tidal power.

And, finally, there are some areas of the country that are ideal for wind farms like El Arrayan.

image copyright Antofagasta Minerals image caption El Arrayan's coastal location is ideal

"Chile needs more generating capacity to bring down fuel prices," Energy Minister Maximo Pacheco said as the wind turbines of El Arrayan whirred into life.

"Chile needs more clean energy and Chile needs more investment. There are enormous investment opportunities in this sector."

The government has vowed that between now and 2025, 45% of new capacity on the Chilean grid will come from non-conventional sources like wind and solar.

If successive governments stick to that ambitious target, they should ensure that by 2025, 20% of the nation's electricity comes from such sources.

At the moment, the figure is about 8%.

No subsidies

So far, progress in this area has been relatively slow.

image copyright Getty Images image caption Energy-hungry industry has a long history in Chile

The state refuses to subsidise the renewables sector, meaning that wind, solar and geo-thermal generators have to compete on a level playing field with cheap coal-fired power stations.

Furthermore, Chile has yet to endorse either net metering or feed-in tariffs, mechanisms designed to promote investment in renewable energy.

But, despite that, there are signs that the sector is taking off.

In the first seven months of this year, Chile added 600 megawatts of renewable capacity to its grid, more than twice as much as in the whole of 2013.

Since coming to power in March, the Bachelet government has granted 76 concessions for renewable energy projects in northern Chile, earmarking over 21,000 hectares of state-owned land for solar and wind development.

Many of those projects are designed specifically to serve the mining industry, the lifeblood of the Chilean economy.

Mining firms have seen their costs rise sharply in recent years and are desperate for cheap fuel.

It will be a while yet before Chile's copper mines break their dependency on fossil fuels.

image copyright Getty Images image caption Copper mining is key to the Chilean economy

Renewable energy has a long way to go before it can meet the industry's voracious energy demands.

But wind farms like El Arrayan are a first step.