News round-up, Monday, February 6, 2023
In memory of my friend, José Alberto Ginebra Giudicelli...
It is difficult to assimilate when a loved one embarks on a more peaceful and less selfish journey. The famous Mexican poet, novelist, and philosopher, Carlos Fuentes describes this difficult moment of understanding uniquely like no other,
"How unjust, how cursed, how bastard is death, which does not kill us but those we love."
Quote of the day…
Africa needs to learn to feed itself, says Senegal President Macky Sall
Source Reuter. Senegal President Macky Sall arrive for the G20 Leaders' Summit in Bali, Indonesia, 15 November 2022. Most Read…
The EU's Global Gateway Europe's Answer to China's New Silk Road Is Slow-Going
The European Union wants to compete with China's New Silk Road via a multibillion-euro infrastructure initiative in Africa and Asia. But the project is meeting with resistance, even within its own ranks.
Spiegel by Christoph Giesen, Michael Sauga, Fritz Schaap, Stefan Schultz und Bernhard Zand
War in Ukraine: Europe bans Russian diesel in order to weaken Putin
In coordination with the G7, the EU-27 is implementing a second round of sanctions targeting Russian oil. Products refined in Russia will be banned from February 5 and a price cap will be set.
Le Monde by Marjorie Cessac and Philippe Jacqué (Brussels (Belgium) correpondent)
In France, the Russian diesel embargo keeps pressure on pump prices
The new ban approved by the EU may have an inflationary effect at the pump, but professionals assure that it has already been largely anticipated in the current rates.
Le Monde by Adrien Pécout
Chile, the land of mines, leads the way in solar energy
The Latin American country has far exceeded its goal to reach 20% of energy production from renewable sources by 2025
El País by NOOR MAHTANI
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Seafloat-hybrid-power-plant
Armando Rodriguez, Seaboard CEO for the Dominican Republic, concludes:
“We are very excited about this project because it will be a big benefit to the community in terms of the environment and the employment we will provide to the area.
Cooperate with objective and ethical thinking…
What is Artificial Intelligency?
Artificial intelligence (AI) is the ability of a computer or a robot controlled by a computer to do tasks that are usually done by humans because they require human intelligence and discernment. Although there are no AIs that can perform the wide variety of tasks an ordinary human can do, some AIs can match humans in specific tasks.
Bill Gates: A.I. is like nuclear energy — ‘both promising and dangerous’
Published Tue, Mar 26 2019
Catherine Clifford@IN/CATCLIFFORD/@CATCLIFFORD
Microsoft founder Bill Gates
Lintao Zhang/Getty Images
The power of artificial intelligence is “so incredible, it will change society in some very deep ways,” said billionaire Microsoft co-founder Bill Gates.
Some ways will be good, some bad, according to Gates.
“The world hasn’t had that many technologies that are both promising and dangerous — you know, we had nuclear energy and nuclear weapons,” Gates said March 18 at the 2019 Human-Centered Artificial Intelligence Symposium at Stanford University.
According to Elon Musk, “cutting edge” AI is actually “far more dangerous than nukes.” But in Gates’ view, the most scary application of artificial intelligence is for warfare.
“The place that I think this is most concerning is in weapon systems,” Gates said at Stanford.
A 2018 report by AI and security technology experts, says that digital, physical and political attacks using artificial intelligence could include speech synthesis for impersonation; analysis of human behaviors, moods and beliefs for manipulation; automated hacking and physical weapons like swarms of micro-drones.
Jeff Bezos has also expressed concerns about killer AI.
“I think autonomous weapons are extremely scary,” said Bezos at the George W. Bush Presidential Center’s Forum on Leadership in April. The artificial intelligence tech that “we already know and understand are perfectly adequate” to create these kinds of weapons said Bezos, “and these weapons, some of the ideas that people have for these weapons, are in fact very scary.”
Meanwhile, AI also has the potential to do a lot of good for humanity, Gates said, because it can sort vast quantities of data much more proficiently and efficiently than humans.
“When I see it applied to something that without AI, it is just too complex, we never would have seen how that system works, that I feel like, ‘Wow, that is a very good thing.’”
For example, said Gates, the “nature of these technologies to find patterns and insights...is a chance to do something in terms of social science policy, particularly education policy, also, you know, health care quality, health care cost — it’s a chance to take systems that are inherently complex in nature,” Gates said.
“These systems should help us look not just at correlations but try interventions and see causation, as well. So it’s a chance to supercharge the social sciences.”
An artist's rendering of the Global Gateway project Hyrasia OneImage: Spiegel by HYRASIA ONEThe EU's Global GatewayEurope's Answer to China's New Silk Road Is Slow-Going
The European Union wants to compete with China's New Silk Road via a multibillion-euro infrastructure initiative in Africa and Asia. But the project is meeting with resistance, even within its own ranks.
Spiegel by Christoph Giesen, Michael Sauga, Fritz Schaap, Stefan Schultz und Bernhard Zand
03.02.2023
In the barren steppes of southwestern Kazakhstan, not far from the Caspian Sea, the European Union's energy worries will soon evaporate if things go according to plan. Wind and solar plants with around 40 gigawatts of capacity are planned there, along with electrolysers to produce 2 million tons of green hydrogen per year – enough to meet one-fifth of the EU's estimated import needs in 2030.
The multibillion-euro project, which involves a Dresden company, is called Hyrasia One. It is meant to be a beacon for a greener economy – and a move against Vladimir Putin: Since the Russian army invaded Ukraine, Kazakhstan has been increasingly turning away from Moscow and looking for partners in the West.
European Commission President Ursula von der Leyen is very enthusiastic about the project, because Hyrasia One is intended to be the driving force behind a 300-billion-euro offensive that von der Leyen has made a priority for her term in office: Global Gateway. The initiative, conceived as Europe's response to China's New Silk Road, aims to implement infrastructure projects around the world. Roads, ports and powerlines, internet cables and solar parks are intended to drive the economies of developing and emerging nations while helping Europe gain geopolitical influence.
In an internal list, the Global Gateway team has identified 70 lighthouse projects that can be launched this year. At the moment, officials in Brussels are selecting 30 projects that will be given priority for implementation. The regional focus is sub-Saharan Africa, with more than half of the project proposals located there. There are 14 projects in Central and South America, 13 in Asia and Oceania, and seven in the Balkans and North Africa.
The EU is planning deals for raw materials with Namibia and Chile as well as new power lines to the Western Balkans and Tunisia. And it wants to compete with Russia and China, partly in their backyards – with major projects in Central Asia, Indonesia and Vietnam.
Global Gateway marks a change in strategy for European foreign policy. For years, the EU had presented itself primarily as the representative of the good, the true and the nice, as the initiator of classic development aid. It had always been framed as focused on the welfare of the recipient countries. Europe benefited as well – even though this fact was often glossed over. With the Global Gateway program, the EU is now being more open about that self-interest.
Infrastructure investment is "at the heart of today's geopolitics," von der Leyen said at the project's first committee meeting in late 2021. According to an EU paper, Global Gateway will also secure worldwide supply chains. Brussels also wants to create what it sees as a counteroffer to Beijing, which views its New Silk Road initiative not only as an economic, but also as a socio-political project in which its own values and economic policy standards can be enforced.
The continent's strategic shift comes at a time when the global political climate is getting frostier. The pandemic and Russia's attack on Ukraine have temporarily driven energy prices to absurd heights and shown how vulnerable companies and countries are to global dependencies.
At the same time, China is emerging as a new superpower that is luring countries into a debt trap, securing access to raw materials worldwide and dominating a growing number of markets.
Many countries are responding to the new geopolitical reality by calling for "strategic autonomy," while at the same time trying to bind other countries to them through infrastructure investments. The United States, Japan and Australia want to make their mark on emerging and developing nations through the Blue Dot Network, while India, a medium-sized power, is promoting initiatives in South and Southeast Asia. The EU, however, has recently fallen behind in the global power game.
In Africa, for example, Brussels and Beijing each still had a share of around 40 percent of construction and infrastructure investments in 2010. By 2018, though, China's share had risen to around 60 percent, while that of the EU had fallen to just over 20 percent, the result of a short-sighted foreign policy.
For decades, it had mainly been the Europeans who had pushed ahead with major infrastructure projects in emerging and developing countries. Water-control projects along the banks of the Tigris River in Baghdad, the urban highways of Riyadh and Jeddah in Saudi Arabia or the street plan of Lagos in Nigeria are monuments to this era.
For decades, it had mainly been the Europeans who had pushed ahead with major infrastructure projects in emerging and developing countries. Water-control projects along the banks of the Tigris River in Baghdad, the urban highways of Riyadh and Jeddah in Saudi Arabia or the street plan of Lagos in Nigeria are monuments to this era.
But soon, the shadow side of Europe's construction drive became apparent. For the beneficiary countries, corruption scandals and "white elephants" proliferated: overpriced, outsized and ultimately useless projects. The EU began attaching increasingly stringent conditions to aid as part of its development policy.
The Global South, whose population has been growing as fast as its need for infrastructure, found a less critical helper in China. Like the Europeans before them, its predominantly state-owned construction companies were looking for new markets. And Beijing was seeking ways to expand its influence. In 2013, head of state Xi Jinping announced the New Silk Road project.
From the beginning, China's leadership made no distinction between development and geopolitics. The general population in developing and emerging countries is rarely involved in Silk Road projects. "In many cases, only the Chinese have access to Chinese foreign construction sites," says a Brussels-based development expert. "The Chinese plan it, the Chinese do the work and Chinese is spoken." The working conditions are often questionable, and climate change plays a subordinate role. Countries like Sri Lanka, Djibouti and Kyrgyzstan have become highly dependent on Beijing financially. On top of that, China is equipping dictators and autocrats with surveillance technology.
The EU long found it difficult to react to this in a unified manner. Around three years ago, a group of experts led by Thomas Wieser, a longtime top EU official, analyzed Brussels' funding policy. They issued a scathing verdict. A "multitude of actors at national and European levels" formed a "highly complex architecture" with many "overlaps, gaps and inefficiencies," stated the panel's final report. It said it lacked a "unified strategy." It added that "consolidation and focus" are needed to "strengthen the EU presence and EU development priorities."
Leading EU officials viewed the situation similarly. France and Germany, otherwise not always on the same page, endorsed Wieser's suggestions, as did the foreign and development policy experts in the European Parliament. Commission President von der Leyen ultimately adopted the recommendations after initial hesitation.
So far, though, not much has happened. "The excavators need to start rolling now," argues Nils Schmidt, the foreign policy point person for the center-left Social Democratic Party's (SPD) group in the German federal parliament. "The Commission must finally deliver," says Reinhard Bütikofer, a member of the European Parliament with the Green Party. But the minute details are threatening to wreck what could otherwise be a powerful impact.
Germán & Co
There is currently a dispute among member states about the regional focus of the initiative. Italy and France are calling for investment in Africa in particular. Spain and Portugal, on the other hand, are making the case for Latin America. And the Eastern European capitals want more money for the Western Balkans region.
There has also been little headway on the financial architecture for the project. The Wieser Commission had already criticized the fact that Europe's infrastructure funds are allocated by two financial institutions: the European Investment Bank (EIB) in Luxembourg and the European Bank for Reconstruction and Development (EBRD) in London. But rather than bundling lending at one institution, the European Commission merely promised better cooperation between the two.
The list of Europe's lighthouse projects looks correspondingly disjointed. Major projects in the transport and water management sectors are "underrepresented," says a critical Frank Kehlenbach, a Europe expert at the Central Federation of the German Construction Industry. Much is done in a scattershot manner: Sometimes it's a solar project for a few tens of thousands of people in Nigeria, sometimes, it's seawater desalination plant for Jordan.
Climate protection doesn't appear to be a particular priority – more than 40 percent of the projects are not explicitly committed to it. Projects are also planned in autocratic countries like Cameroon, Rwanda and the Congo. "The bottom line is they are likely to strengthen the position of the autocrats there," says Mark Furness of the German Institute of Development and Sustainability (IDOS) -- no matter how high the standards are for the projects themselves, and regardless of their positive impact.
The private sector, which is expected to provide a large part of the total 300 billion euros, doesn't feel sufficiently involved. So far, companies haven't even had direct contact in Brussels about whether they want to participate in the project. "There is a relatively high level of interest among companies," says Patricia Schetelig, deputy head of the International Markets Department at the Federation of German Industries (BDI). "But many are a little baffled right now."
This is even more so the case within the EU administration. There, a fundamental question has been reignited about whether Europe's geopolitics can really become that much more self-serving. There is also a general aversion to change. Some officials simply slap the Global Gateway label on old projects, but actually want to maintain the status quo, sources in Brussels say.
Although the Europe-initiated construction projects are supposed to set high labor and climate standards, the loans also forbidden from overburdening the participating countries. The problem there, though, is that even countries that are supposed to benefit from the funding have doubts about it. "We have seen recently that the EU and other development partners have made grandiose statements, but very little of it has actually been implemented," says Jason Braganza of Kenya, an economist and the director of the African Forum and Network on Debt and Development.
He says that for larger planned infrastructure projects, many of the companies, materials and experts all come from the EU. In the past, he says, they have often pushed through considerable tax reductions or even tax exemptions. The countries in question then had to forfeit those revenues. "Given the budget deficits and debts levels of many African countries, one has to question whether this is the appropriate financing model," Braganza says.
He views Global Gateway primarily as another attempt to gain access to the continent's resources. If the EU were about values, he argues, it could not do business in an environment plagued by corruption and kleptocracy.
Of all countries, China, which could feel provoked by Europe's newly awakened strategic ambitions, is currently pretending to be officially cooperative. At the time of the official presentation of Global Gateway at the end of 2021, Beijing was still badmouthing the initiative. Those who do business with the EU risk political and ideological dependencies, argued the party newspaper Global Times. It was the polar opposite of the Europeans' narrative.
Since the Taiwan crisis in August, China has been trying to woo the Europeans, in part to drive a wedge between the EU and the United States. But Beijing has recently been circulating a completely new spin on Global Gateway.
Following a visit by European Council President Charles Michel to Beijing in early December 2022, the official Xinhua news agency mentioned China's New Silk Road as well as the Global Gateway project in an article and trumpeted that "more fruitful results could be achieved in dialogue and cooperation in various fields." This could be interpreted as the suggestion that the two initiatives should cooperate, with China as the driving force.
Many in Brussels find that to be a little strange. Officials close to von der Leyen say they haven't heard of any talks with China about that kind of cooperation.
In any case, von der Leyen is pushing for things to move forward with Global Gateway. She has personally taken over the leadership of the supervisory board of Global Gateway and is looking for a prominent European politician to bring the apparatus into line as a special representative. One of those under discussion, former European Central Bank (ECB) head and former Italian Prime Minister Mario Draghi, has turned down the post. All the same, von der Leyen's head of cabinet, Björn Seibert, is coordinating development projects at the G-7 level.
The goal is to prevent a repeat of what happened in Nairobi to Bernd Lage, a member of the European Parliament who is also the head of its Trade Committee. He wanted to speak about EU projects there, but representatives of the Kenyan government talked almost exclusively about the capital city's new highway route, which Chinese corporations had completed in just a few years. "We would have needed 10 years in Europe, just to approve the project," says the politician, who is a member of the center-left Social Democrats.
Germán & Co
War in Ukraine: Europe bans Russian diesel in order to weaken Putin
In coordination with the G7, the EU-27 is implementing a second round of sanctions targeting Russian oil. Products refined in Russia will be banned from February 5 and a price cap will be set.
Le Monde by Marjorie Cessac and Philippe Jacqué (Brussels (Belgium) correpondent)
Published on February 6, 2023 at 05h00
The first Russian oil embargo did not cause any upheaval in the world market. What will happen with the second?
Having stopped importing Russian crude oil at the beginning of December 2022, the European Union (EU), together with the G7 countries and Australia, prepared on Sunday, February 5, to launch the second part of its plan. They are banning the import of refined Russian oil products, mainly diesel but also kerosene, fuel oil and heating oil.
This measure is particularly sensitive, as Europe is so dependent on Russia for these products, particularly diesel. Despite the sharp drop in imports over the past year, Russian diesel still accounts for a quarter of the fuel imported into Europe. Every day, the EU consumes some 6.4 million barrels of diesel, while its refineries produce only 5 million barrels. The shortfall is offset by imports, of which about 700,000 barrels come from Russia. The rest come from the Gulf States, the United States and India.
In December, the EU set a price cap on Russian crude oil of $60 (about €56) per barrel. In parallel with the embargo, the EU has now also decided to set a price cap on refined Russian products. For premium fuels (diesel, kerosene, etc.), the price cannot exceed $100 per barrel. For simpler products, such as heating oil, the limit will be $45, "in order to put pressure on Russia's revenues while maintaining a fluid global market for these products," said a European diplomat. In concrete terms, Western countries are prohibiting service providers (transport, insurance, etc.) from transporting these Russian products beyond the fixed price.
Stocks and new sources
While the mechanism has been tried and tested for two months for crude oil, the EU member states nevertheless took time to agree on Friday, February 3. The Baltic States and Poland were campaigning for an additional reduction in the cap for crude oil and refined products in order to further reduce Russian revenues, said a diplomat from northern Europe. But other states, in the EU and in the G7, did not want to destabilize the market.
One source said, "In mid-March, after a comprehensive analysis of the mechanism in place, a decision will be taken on whether to change the level of the price cap." This decision "will further destabilize the international energy markets," warned Russian presidential spokesman Dmitry Peskov on Friday, adding that Moscow was "taking steps to cover [its] interests."
With these measures, will the EU run out of diesel, kerosene or fuel oil? "No, it has largely anticipated this embargo and increased its stocks in recent months by accelerating purchases," said Ben McWilliams, who is in charge of energy at the Bruegel Institute, a think tank. The stockpiles are helping to preserve the immediate supply for motorists, and also for the entire transport, agricultural and industrial sectors, which are highly dependent on these products. "Things should be fine in the short term," said McWilliams.
Among the new sources of supply, the Middle East, already a long-established supplier, will be at the forefront for economic reasons and because supply routes are shorter, compared with India, for example. Refineries in the Gulf are already running at full capacity and new plants under construction are expected to provide additional capacity by the end of 2023.
"In order of preference, the EU is expected first turn to the Gulf countries, then the United States and India," said Carmine de Franco, head of research at Ossiam. In January alone, Europe imported large amounts of refined products from the United Arab Emirates, Saudi Arabia and the United States. Between them, they exported the same level as Russia alone to Europe.
Redrawn flow map
De Franco added that "for its part, China buys cheap crude oil from Russia to refine and then sell on to other Asian countries," which should "free up resources that Europe can rely on."
Just as has happened with oil over the past two months, the map of refined product flows will be completely redrawn. In the case of crude oil, India and China, as well as Saudi Arabia for its domestic market, have taken many Russian deliveries at a price below the market. Saudi Arabia has consequently increased its exports to Europe.
In the case of refined products, where long-distance transport is more complex because the vessels are smaller, traders have so far observed a redirection of Russian oil product flows mainly to North Africa and Turkey, which suggests that Moscow, constrained by its fleet of tankers, prefers shorter routes.
According to Viktor Katona, an analyst at Kpler, the countries around the Mediterranean (Morocco, Algeria, Tunisia, Egypt and Turkey) are ideal places to carry out transshipments. These operations allow the transfer of cargo from one ship to another to make the journey. "Morocco, for example, buys Russian diesel that it mixes with local products to make them pass through European customs without hindrance," the expert explained.
In contrast, Sub-Saharan Africa, South America and Asia have seen much lower flows in recent months. In China and India, for example, diesel imports have remained lower (10,000 barrels per day on average). These countries have rebuilt their refining capacities and are now less tempted to import this type of product.
But Europe is not immune to a crisis. IFP New Energies (formerly the French Petroleum Institute) does not rule out "a more pessimistic scenario (...). If some of the Russian gas oil is not exported, due to constraints linked to either sanctions or transport costs, or even a Russian national decision to restrict them," this could increase prices everywhere.
In France, the Russian diesel embargo keeps pressure on pump prices
The new ban approved by the EU may have an inflationary effect at the pump, but professionals assure that it has already been largely anticipated in the current rates.
Le Monde by Adrien Pécout
Published on February 6, 2023
Will France still be able to meet its diesel needs in the coming months? And, above all, at what price? This is a major concern for motorists in the country, where, at 55% of the fleet, diesel engines still outnumber gasoline ones. The concern will grow on Sunday, February 5, the start date of the European Union (EU) embargo on refined oil products from Russia, two months after the embargo on crude oil came into effect.
In January, the government replaced a systematic fuel discount across the board with an allowance of €100 per year for people with the lowest incomes, but prices at the pump have already climbed significantly higher: €1.94 per liter of diesel on average in the week of January 27. The peak in this area remains in March 2022 (€2.14 per liter). The month of June would certainly have exceeded this number without the government's rebate of €0.18 per liter.
The most significant impact has already occurred, according to the oil industry's employers' organizations because, since its outbreak in February 2022, the war in Ukraine has made Russian deliveries uncertain. In 2021, this represented about 9% of crude imports in France and 30% of diesel imports. "The embargo on Russian diesel has more impact in France than the one on crude oil, but this impact has been anticipated in diesel prices for several months," said Jean-Nicolas Fiatte, director general of the Professional Oil Committee.
'Looking further afield for fuel'
On a European scale, "as of March 2022, diesel prices in Rotterdam [the benchmark index in the Netherlands] have risen more than the price of crude oil [for North Sea Brent]," observed Olivier Gantois, president of the French Union of Petroleum Industries. They have risen so much that the gross refining margin – the difference between the value of the refined product and the initial value of the crude – has increased from one to more than seven times: €101 per tonne in 2022, as compared with €14 in 2021, according to figures compiled by the UFIP.
But, according to Andrew Wilson, head of analysis for the French shipping broker BRS, prices could still rise for reasons of logistics. "Europe will have to look further afield for fuel, which means paying higher shipping costs, and that will depend a lot on the cost of replacement barrels," said Wilson. Instead of Russian ships crossing the Baltic, larger vessels could come from North America, the Middle East, India or even China.
"We are going to use our global refining system, particularly in Saudi Arabia, to supply our service station networks in Europe as a priority," said Patrick Pouyanné, head of the oil company TotalEnergies, in an interview with the Belgian dailies L'Echo and De Tijd on January 28. Gantois said that "the embargo should not affect the availability of diesel in France, as a system of communicating vessels with other areas than Europe will be at work."
There is also increasing structural pressure on diesel, and therefore on its price. Over the past decade, several refineries in Europe have closed – for example, those at Dunkirk (northern France), Reichstett (northeast) and Berre (south) – which has increased the use of contracts from further afield. This is a "profound strategic error," said Thierry Defresne of the General Workers' Confederation union (CGT) for TotalEnergies.
"In France, successive governments have allowed the destruction of refining," said the trade unionist. "Rather than securing imports, we were asking for the possibility of refining within France all the oil the country uses, in an effort for energy independence." In its January report on the oil market, the International Energy Agency wrote that in December 2022, Russia was still exporting a record 1.2 million barrels of diesel per day – 60% of this was destined for the EU.
Source: El País, The Cerro Dominador concentrated solar power plant in Chile’s Atacama Desert.JOHN MOOREChile, the land of mines, leads the way in solar energy
The Latin American country has far exceeded its goal to reach 20% of energy production from renewable sources by 2025
El País by NOOR MAHTANI
In the middle of the Atacama Desert, 10,600 mirrors face skyward. Each one measures 140 square meters and weighs about three tons. Their function is to follow the sun’s trajectory, reflecting and directing the radiation towards the receiver and converting it into energy. The Concentrated Solar Power plant occupies 1,000 hectares and is located in northern Chile’s Cerro Dominador. This area has the highest level of solar incidence in the world and is the site of Latin America’s first solar thermal plant. Most of the country’s clean energy is generated there and, because of the plant, Chile achieved one of its most ambitious environmental targets last year, four years ahead of schedule.
The country set itself the goal of producing 20% of its energy from non-conventional renewable energy (NCRE) by 2025. This year, the percentage has already reached 31.1%, according to the Chilean Association of Renewable Energies and Storage (Acera). This comes primarily from photovoltaic energy, which represents 15% of the country’s renewable energy. Cerro Dominador’s proximity to Chile’s large mining areas has also made it easier for that industry to incorporate more solar energy. In 2019, mining’s use of renewable energies did not exceed 3.6%, but it rose to 10.5% in 2020. In 2021, solar energy consumption in the mining sector reached the milestone of 36.2%. That rate is projected to climb to 50% by the end of this fiscal year.
The turning point came in 2013. Over the last decade, clean technology prices have fallen by almost 90%, a trend that is set to continue. Javier Jorquera Copier, an analyst at the International Energy Agency, says that the boom in renewable energy sources is multifactorial and promising: “Government-led auction schemes, competitive bidding in the deregulated electricity market and, more recently, the country’s hydrogen strategy, are driving the solar PV boom in Chile,” he says.
Although Chile hasn’t implemented subsidies for large-scale solar generation, there are some government incentives for people to install solar panels at the residential level, such as the public solar roofs program and net billing, an initiative that allows Chileans to generate their own energy, consume it, and sell their surplus at a set price. Constanza Levicán, an electrical engineer and the founder of Suncast, a Chilean startup that uses artificial intelligence to assess NCRE, is somewhat more critical of the state’s failure to intervene. “If Chile had promoted this industry earlier, it could have positioned itself as an expert in the sector and exported its services to the world,” she says.
Chile has optimal conditions for clean energy production
Nevertheless, Chile has made one of the fastest green transitions in the world, according to Fernando Branger, an energy specialist coordinator at the Inter-American Development Bank. As he explains, the country has opted for a “powerful diversification of energy sources” as a result of greater awareness of global warming and international emission reduction targets. “On top of that, they have the resources. Just as their land is good for [producing] wine, it’s also good for generating solar energy,” he explains via a video call. “The mining industry worked to include it, and there are financial instruments that compensate for the fact that solar energy does not work at night.”
Chile’s conditions are optimal. The Atacama Desert’s average solar irradiation is approximately double the average of Spain’s, for example. Álvaro Lorca, a professor of engineering in the Department of Electrical Engineering at the Catholic University of Chile agrees about the importance of changing the narrative around emissions and climate change. “A real effort goes into making that transition and doing away with coal as well,” he explains. The government’s goal is to eliminate this energy source entirely by 2040 and “everything points to the fact that it could be replaced by solar. It is already competitive in the market today,” Lorca adds.
Switching a third of the country’s energy to clean sources in such a short timeframe makes the commitment to sustainability tangible. In fact, Chile’s new National Energy Policy is even more ambitious; it aims to reach a target of 80% by 2030, which is a “feasible” goal, according to experts. Thus, Chile is paving the way for a region that currently generates 61% of its power capacity is from renewables, according to Energy Global.
However, solar and wind energy pose a significant challenge: transmitting production from sunny and windy areas to the places where energy demand is greastest, something which does not coincide geographically in Chile. “The solar photovoltaic plants in the north have not been able to pump electricity into the system at maximum potential, because of the lack of transmission capacity. The slow expansion of that infrastructure has caused delays in projects in the past and could slow the pace of expansion in the near future,” says Jorquera.
The most viable solution for resolving that shortfall involves investing in batteries that store production at night to avoid spillage and waste. “That is the next step. Chile will require more precise regulations to correct some inefficiencies,” says Branger. Those must be the next steps to be taken if Chile is to continue to lead in the field of renewable energy, he notes.