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    This blog highlights effective ideas in the fight against poverty and exclusion, and analyzes the impact of development projects in Latin America and the Caribbean.
  • Solar power plants in the chilean desert



    By Elizabeth Robberechts

    The Atacama Desert is among the driest regions on earth, with minimal cloud cover and high levels of solar radiation, making it the ideal place for Chile to harvest solar energy.

    To help the country tap into this potential, the IDB and the Canadian Climate Fund for the Private Sector in the Americas are providing long-term financing to build the country’s first large-scale solar power plants. Resources will be used to build two solar photovoltaic power plants with a combined output capacity of 26.5 megawatts peak.

    The investment, approved in the first quarter of 2013, represents the biggest step to date to help Chile use solar power to diversify its energy matrix and meet rising demand, which is expected to grow as much as 7 percent annually by 2020. The investment will help Chile advance on its plans to more than double renewable energy generation capacity over the next decade. That´s critical for a country whose generating capacity is 75 percent dependent on imported fuels.

    The power plants, which will be named Pozo Almonte and be built by Solarpack Corporación Tecnológica, will supply energy to two of Chile’s largest mining companies. Clean energy generated by the plants will prevent the release of approximately 56,000 tons of carbon dioxide each year. Financing provided by the IDB and the Canadian Climate Fund has been key to overcoming one of the biggest barriers to the development of solar power in Chile: lack of long-term credit. Unlike most solar projects around the world, these plants will receive no government subsidies in terms of feed-in tariffs or tax incentives.

    The financing arrangement is expected to show other potential investors how to viably harness Chile’s solar power. The potential is stunning: If even just 10 percent of the Atacama were used to produce electricity through photovoltaic power plants, it would generate 601,600 terawatt hours (TWh) of electricity over a century. In contrast, if all of the oil in the deserts of Saudi Arabia were burned, it would generate 177,143 TWh, based on comparable efficiency models. More simply put, solar plants in Atacama have the potential to produce more electricity than almost any other place on the planet.

    For the mining industry, the development of solar power plants in northern Chile could help mitigate concerns about the impact of its operations on the environment and facilitate future expansion. This could greatly benefit the Chilean economy since the industry is responsible for 19 percent of the country’s GDP and 18 percent of the total electricity consumption.

    By utilizing a local energy source that is clean and abundant to bridge the gap between energy supply and demand, Chile’s economic prospects seem brighter than ever.

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