Chile is fifth emerging country where it’s cheapest to invest in energy transition – report
RIO DE JANEIRO, BRAZIL – The tenth edition of the Bloomberg Climatescope report, which ranks the best countries to invest in the energy transition, takes into account not only clean energy activities but this time also the decarbonization of the transport and construction sectors, placing Chile 5th among emerging countries and 26th overall.
In terms of 2020 data, and between the maximum score of 3.04 achieved by the Netherlands and the minimum score of 0.5 for Turkmenistan (ranked 136th), Chile scores 2.12 points, so that among emerging countries, it is surpassed only by China, India, Croatia, and Taiwan, in that order.
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The area where Chile stands out the most is energy, where it scores 2.5 points and shares second place with China among emerging countries, in a list topped in this case by India. In decarbonization, the country scores 1.8 points in transportation and 1.31 points in construction, ranking fourth and eighth, respectively.
Three criteria are considered when analyzing the individual points. Thus, Chile receives an average of 1.43 points for experience and 0.33 points for fundamentals and opportunities. The Netherlands, the best performer at the global level, scores 0.44 points for experience, 1.31 points for fundamentals, and 0.53 points for opportunities. Denmark completes the podium with 2.86 points and Spain with 2.64 points.
CHILE’S GOALS AND PROGRESS
According to the detailed analysis, the report highlights that “Chile has committed in its updated ‘Nationally Determined Contribution’ (NDC) to achieve carbon neutrality by 2050, i.e., its plan to achieve the goals of the Paris Agreement.”
In this context, it is highlighted that while the country “has a target of generating 20% of its electricity from renewable sources by 2025″, this target was “achieved ahead of schedule, as 25% of electricity generation in 2020 came from clean energy sources″. It is because wind and solar energy accounted for 17% of total generation in that year.
On the other hand, it is pointed out that the country “aims to phase out coal-fired power generation by 2040 and has set a timetable to close 50% of coal-fired power plants by 2025”.
Among other details relevant to investment, the report states that “Chile conducts power auctions with standardized power purchase agreements (PPAs) denominated in U.S. dollars.” It also says that “developers can also enter into bilateral contracts with large consumers outside the regulated market.” An example of this is the mining sector, which “accounts for a large portion of Chile’s clean energy PPA market and generally enters into long-term contracts.”
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