Chile-US Energy Solutions

Javier Irarrázaval and Rodrigo Ballivián, AmCham; Rhiannon Davies,  US Department of Energy; Doyle Brewington,  Power Tube Inc., and Antonio Monzón, IBM

As Chile races towards development, high energy costs threaten to slow its rapid growth. According to a recent report by the Organization for Economic Co-operation and Development (OECD), Chileans pay 60% more per megawatt than the OECD average and prices have quadrupled since 1998.

Part of the problem is Chile’s lack of hydrocarbons. With virtually no oil and little gas of its own, it imports around 75% of its energy needs in the form of fossil fuels, mostly oil, coal and LNG.

Chile has plenty of fast-flowing rivers and hydroelectricity accounts for around 40% of its installed capacity, but new generation and transmission projects have been delayed due to regulatory concerns.

“The energy issue is important for the economic and social development of the country and, if it is not resolved in the short term, Chile will not be able to meet the increase in demand from residential customers and industries,” said AmCham’s president, Javier Irarrázaval.

In this scenario, non-conventional renewable energy and energy efficiency projects could play an important role in meeting future demand growth.

The United States has much to contribute in this area. One of the outcomes of President Obama’s visit to Chile in March 2011 was an agreement with President Piñera to create the US-Chile Energy Business Council which is aimed at generating business opportunities between the United States and Chile in renewable energy and energy efficiency.

Launched last October with AmCham’s leadership, a key part of the Council’s mandate is bringing together US and Chilean energy experts. To this end, it organized the first International Technologies Fair (IFT Energy 2012) held in May at Espacio Riesco in Santiago. During the three-day fair, US and Chilean companies demonstrated new technologies while participating in a series of seminars on topics related to increasing the energy supply in Latin America.

In parallel, AmCham hosted a seminar titled “Chile-US Solutions for the Energy Issue” with three guest speakers: Antonio Monzón, an energy & utilities industry leader at IBM; Doyle Brewington, founder and chief technical officer of Power Tube Inc.; and Rhiannon Davies, Senior Policy Advisor at the Office of Western Hemisphere Affairs in the U.S. Department of Energy.

AmCham’s Javier Irarrázaval introduced the seminar and spoke about the Energy Council’s advances to date. The Council, which is open to all members, has created four working groups focused on financing, regulation, training, and technology.

He said AmCham has contacted multilateral financial entities such as the Inter-American Development Bank, the World Bank and the US Eximbank, as well as angel investors and fund managers, to seek ways for financing new technologies and infrastructure in Chile that improve the security and efficiency of the country’s energy system.

In addition, the Council is working to develop training activities in the generation, transmission and distribution areas. This includes seeking opportunities to send Chilean professionals to learn and work in US companies with special visas available under the US-Chile Free Trade Agreement.

“It’s clear that new technologies imply the need for people who are adequately trained,” said Irarrázaval.

The Council is also working to promote new technologies that could be used in Chile. An example is “smart grid” technology, which allows companies to remotely gather and act on information about the behavior of suppliers and consumers. IBM’s Monzón spoke about how smart grids used in Malta and other countries could serve as an example for Chile to optimize scarce energy resources and reduce dependence on imported fossil fuels.

Smart grids could also help protect consumers in Santiago in the event of a blackout by automatically detecting where the problem occurred and minimizing its impact, said Monzón.

But, according to Doyle Brewington, Chile could be sitting on all the energy it could ever need. His invention, the Power Tube, is designed to generate power using heat from deep in the earth’s core without causing pollution or requiring large amounts of water.

Chile, like California where Brewington developed his device, lies on the Ring of Fire, which means it produces a large amount of heat where tectonic plates meet. Putting a 60-meter tube into the ground to extract this energy, at temperatures of between 120 and 170 degrees Celcius, could solve Chile’s energy problems once and for all, suggested Brewington.

Finally, Rhiannon Davies highlighted US-Chile cooperation in the energy field and outlined President Obama’s plan for 80% of energy supplies in the United States to come from clean energy sources by 2035. She also noted that Chile has agreements with California and Massachusetts, two states with important experience in the energy field.

The Energy Council is already planning the second IFT conference to be held in 2013 which promises to be another golden opportunity for US and Chilean companies to exchange experiences and ideas. Whether any of these ideas come to fruition is up to the companies involved, but Chile stands to benefit from their cooperation.