"I think solar energy will take some time in Chile... there isn't enough know-how"
Solar power has been slow to take off in Latin America despite the region's vast capacity for the resource.
But Chilean authorities have warmed to the technology of late, hosting a number of talks and panels on the power source. Solar is an attractive alternative up north, where generators will have a hard time meeting the state's 5% renewable quota with the scarce resources the desert environment provides.
While critics say the energy source is cost-prohibitive, proponents argue governments should help with upfront investments to build up an industrial complex that could be profitable and labor-intensive in decades to come.
Spanish renewables expert Julián Blanco Gálvez joined the debate this month by leading a conference on solar power in Santiago and meeting with government and private sector authorities on the topic. BNamericas caught up with Dr Blanco after his Santiago seminar to discuss solar's potential in Chile.
BNamericas: Now that you've been in Chile a few days meeting with executives and government officials, do you think solar power will grow in the country in the short and medium term?
Blanco: I believe so, but I don't know when.
The different players are very receptive to the technology here in Chile. Government authorities have been very inquisitive and have shown a lot of interest.
But they're taking the initial steps right now. Officials have been a bit timid at the outset, setting a 5% quota for renewable capacity.
One limiting factor, however, is that there isn't enough know-how in Chile. They need universities, professors and research centers to lobby for the technology and advance it. Right now only foreign companies are lobbying for solar energy.
So I think solar energy will take some time in Chile. They still need to discuss and debate the topic to convince everybody that solar is positive for the country. Then they need to create the mechanisms to make way for solar installations.
BNamericas: What kind of companies would be most likely to launch solar energy commercially in Chile - small independents, renewable companies or larger power companies?
Blanco: Let's look at what has happened elsewhere in the world. It has generally started with large engineering firms. Immediately after that, utilities get involved, as do companies with experience like Endesa and Iberdrola.
BNamericas: You mentioned Chile's 5% quota for renewable generation, which will obviously push the renewables market. But will it be enough to push solar energy, specifically?
Blanco: No, it won't be a push for solar.
BNamericas: Right. I've heard you talk of feed-in tariffs. Is that what's needed to get the ball rolling on solar?
Blanco: In developing a renewables portfolio, companies are naturally going to favor the easiest, simplest and cheapest technology, which in general is wind.
You have to make an effort to take advantage of solar technology and develop its capacity in the country. You have to push the technology in order to develop industrial capacity and know-how in the country. And the returns are higher than the initial effort.
The 5% quota will encourage companies to buy turbines in Denmark or Germany, for example. Although you'll have new wind capacity, much of the benefit of the program will go abroad.
BNamericas: But is the feed-in tariff expensive for the government…
Blanco: Consumers pay; the government doesn't incur any costs.
If you spread this throughout the power system, you see a 3-5% increase [in power costs] for the end user.
That would serve as an initial stage of a long journey. What I'm talking about is taking the initial steps.
BNamericas: Do you envision solar power growing more up north in the desert mining industry or in the populous central region?
Blanco: Solar's greatest potential is up north, without a doubt. Solar meets a host of needs up north as well, where there's strong demand for energy. Whereas the coal and gas are imported, solar is an abundant local resource.
Like I've said, there's not a great deal of local know-how, but that can be established through universities, research centers and local companies.
BNamericas: So it sounds like introducing solar power to the grid is a mid-term project, given the need to develop know-how. It sounds doubtful this will happen say in the next two years.
Blanco: Well, nobody knows what can happen. Two years ago in the US with then-president George Bush, solar seemed unthinkable. But now, President Barack Obama is following Europe's lead in strongly supporting solar.
Things have advanced quickly in the last 10 years as more and more people have been convinced about solar's importance.
BNamericas: What role does the economic crisis play in developing solar energy now? I imagine the lower price of oil and tight credit markets make it harder to develop solar projects.
Blanco: It is more difficult in the sense that resources are scarcer than they were. But in the case of Spain, the entire economy is having troubles minus the renewables sector. It's the only sector still attracting investments, public and private. The future is very clear.
BNamericas: Plus they say that renewables are a big boost to employment.
Blanco: Right, the crisis is creating opportunities and is teaching us to fix what wasn't working well before.
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