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Saudi Arabia’s Electricity Market and Opportunities

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Saudi Arabia’s Electricity Market and Opportunities ( saudi-arabias-electricity-market-and-opportunities )

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Chile’s Renewable Energy and Energy Efficiency Market: Opportunities for U.S. Exporters Figure 1: Current and Future Energy Mix (2012 and 2024) Source: Chile National Energy Strategy, pp. 12-13 participate in public tenders under long-term contracts (up to 15 years) to sell power to distribution companies at a fixed price. A “spot” market also exists for power transfers not subject to existing power purchase agreements (PPAs).10 Whether through long-term PPAs or the “spot” market, most power producers sell their electricity into the wholesale electricity market the Chilean electricity wholesale market is privately operated, but is controlled by a few large companies, which operate a virtual monopoly as a result of geography and the cost of building transmission grids.11 Finally, utility companies buy power from the wholesale market and supply it to electricity customers. Chilean utilities are often well-known companies that have a geographic monopoly through a concession granted by the Ministry of Economy, which awards concessions for an indefinite period of time for electricity systems greater than 1,500 KW.12 Importantly, some large energy consumers – mainly mining companies in Northern Chile – have recently built their own power systems, cutting out the remaining part of the value chain, including wholesalers and utilities. These firms have decided to build and operate their own power stations since either connecting their operations to a far-away electricity grid or operating diesel generators has become increasingly cost prohibitive. Many of these firms have turned to renewable energy – either solar, small wind, or 10 Country Energy Profile: Chile – Clean Energy Information Portal (www.reegle.info/countries/chile-energy-profile/CL 11 Ibid 12 Ibid geothermal energy – to provide their power needs, opening a new market for U.S. firms with expertise developing off- grid applications. Renewable Energy In 2012, 37% of Chile’s energy was produced from renewable energy sources – mostly large hydro projects, which accounted for 34% of Chile’s energy production.13 Non-conventional renewable energy, which is defined by Chilean law as renewable energy excluding hydropower projects over 40 MW, remains a small but growing part of the Chilean energy mix, contributing only 3% of Chile’s energy production.14 As of 2011, Chile had only 843 MW of non-conventional renewable energy capacity installed, much of it in the form of small hydropower projects.15 Despite little progress to date, the solar and geothermal markets appear poised for significant growth as a result of both resource potential and high energy prices, which together have catalyzed investment in the sector and built a strong pipeline of planned projects. Bloomberg New Energy Finance (BNEF) estimates that $4.5 billion was invested in Chile’s clean energy industry over the last five years – 5% of all renewable energy investment committed to Latin America, trailing only Brazil and Mexico.16 By 2015, ITA expects Chile to produce 264 MW of solar energy and 1,361 13 Government of Chile, “National Energy Strategy 2012-2030: Energy for the Future,” pp. 12 (February 2012) 14 Ibid,12 15 Bloomberg New Energy Finance, “Climate Scope 2012: Assessing the Climate for Climate Investing in Latin America and the Caribbean,” pp. 47 16 Ibid,48 Manufacturing and Services — Market Intelligence 3

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