Chile debunks solar cost myth

From The Carbon Wars

Just five years ago, Chile’s energy prices were among the highest in Latin America. A few monopolistic utility companies dominated the sector, and Argentina had stopped selling natural gas to its neighbor. Facing the risk of blackouts, the private sector planned to open more coal-burning power plants and build hydroelectric dams that would have flooded Patagonia.

But mass protests soon followed. In 2010, the movement became so powerful that then-president Sebastián Piñera shut down the coal project Barrancones, even though its developer, GDF Suez, was following the law. While it was a win for the environment, the decision seriously harmed Chile’s business reputation.

Today, renewable power is on the rise, with energy investment surpassing mining investment in a nation that’s the largest copper producer in the world. Chile even started exporting electricity and natural gas to Argentina earlier this year.

So what brought on such a rapid change? In a word: competition. There were 84 bids during this month’s power auction, with the winners signing 20-year power purchase agreements. And in a surprising turn, three of Chile’s four largest generators failed to win a supply contract.

The biggest win went to Granja Solar, Solarpack’s project, a near impossible feat a few years earlier. Until recently, solar power couldn’t compete without subsidies, but the falling price of solar panels has made this form of energy more appealing. The average price has declined to a record low of 44.7 cents a watt for standard polysilicon panels.

The new plant will break ground in Northern Chile’s Atacama Desert, an ideal location given its position high in the Andes near the equator. It’s one of the sunniest and driest places in the world, making it a rich option when it comes to solar power.

The Chilean government is also on board. It plans to complete transmission lines that will deliver Granja Solar’s power to the entire country, which is why Solarpack bid so low, Molina told Bloomberg.

Solar power wasn’t the only success, either. Renewable-energy companies won more than half the contracts this time around. The lowest price for wind power was $31 per megawatt-hour, natural gas sold for $47, hydroelectricity for $60, and geothermal for $66, according to Bloomberg.

The triumph of renewable energy at Chile’s recent auction is a strong indicator that the energy sector is in transition. Companies looking to compete will need to adapt quickly if they want to remain competitive, which is a major win for both consumers and the environment.

China on track to become renewable leader

From The Carbon Wars

China has long been known for its consumption of coal — with photos of smoggy cities making headlines numerous times in recent memory. However, it appears the world’s top fossil fuel emitter is getting ready to clean up its act as it formally joined the Paris climate agreement along with the USA yesterday.

In spite of its reputation for air pollution, and late ratification of the COP21 agreement, China is ostensibly on its way to becoming a global leader in renewable energy. In 2015, the country’s solar energy capacity increased by 74 percent and its wind energy capacity was upped 34 percent. It’s worth noting that coal consumption also dropped by 3.7 percent in the same year.

Earlier this year, Nick Mabey, the CEO of climate change think tank E3G, noted: ““Twenty years ago Europeans were still teaching China how to draft environmental law.” And while that may be the case, China is now putting showing its green-energy forebears how it’s done. Last year, sales of electric vehicles in Asia’s largest country were 50 percent higher than in the EU, and in 2014 China spent more on renewable research and development than Europe did.

It has been estimated that by the end of the decade, over 15 percent of China’s energy capacity will come from sources that don’t emit greenhouse gases. Admittedly, that’s no measly number — but the reality is coal will still remain in use for decades.

China may be “cleaning up” its coal-fired capacity in order to make power plants more efficient, though this isn’t sounding the death knells for greenhouse gases like some environmentalists have hoped for. Ultimately, the country has limited oil and gas reserves, and is thus reliant on coal to meet its energy needs. Emissions are predicted to peak in 2030, but until then, coal is likely to remain king.