State of the Art: The Energy Sector in Chile by International Cooperation Programme CONICYT

Energy Sector in Chile: Research Areas and Capabilities State of the Art Report

Table of Contents 1. Introducción.......................................................................................................................................6 1.1 Chile at a Glance............................................................................................................................................. 6 1.2 National Science, Technology and Innovation System........................................................................................ 7 1.3 Funding schemes for Science, Technology and Innovation............................................................................... 10 1.4 Overview of the Chilean Energy Sector........................................................................................................... 13 1.4.1 Chile’s Energy Resources...................................................................................................................... 14 1.4.1.1 Primary Energies........................................................................................................................ 14 1.4.2.2 Non-Conventional Renewable Energy (NCRE)............................................................................. 16 1.4.1.3 Secondary Energy Sources.......................................................................................................... 17 1.4.2 Chilean Energy Policy Guidelines.......................................................................................................... 22 1.4.2.1 Energy Sector Regulation............................................................................................................ 22 1.4.2.2 Hydrocarbons Sector.................................................................................................................. 23 1.4.2.3 Electricity Sector .............................................................................................................................. 24 1.4.3 Sector Consumption and Energy Development............................................................................... 25 1.5 Description of Chile’s Science and Technology System on Energy..................................................................... 26 1.5.1 Institutions and Policies ................................................................................................................ 26 1.5.2 Financing Sources and Private Sector Participation......................................................................... 29 1.5.3 Key Indicators............................................................................................................................... 29 1.6 description of the current situation on Science and Technology in energy........................................................ 32 1.6.1 Science community on energy.............................................................................................................. 32 1.6.2 Centers and Universities...................................................................................................................... 33 1.6.3 Research areas on energy in Chile and their development..................................................................... 36 1.6.4 Existing cooperation with the EU.......................................................................................................... 39 1.6.5 Challenges and opportunities to progress............................................................................................. 40 Glossary.............................................................................................................................................................. 41 References.......................................................................................................................................................... 41

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Published by the European Union Programme of the International Relations Department at CONICYT Santiago, December 2010 This document was developed with funds of the European Union under the scope of the CHIEP II project (Grant Agreement 222705) of the Capacities programme under the Seventh Framework Programme. The content of the document is the sole responsibility of CONICYT and can in no way be taken to reflect the views of the European Union.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

1. Introduction 1.1 Chile at a Glance Chile is located to the Southwest of South America spanning 4,200 kilometres of continental territory, and 8,000 kilometres if the Antarctic territory is included. The continental territory is located between the 17.50º and the 56.50º South Latitude, and the Antarctic area reaches the South Pole, at 90º South Latitude.

América del Sur South America

Chile

Capital City

Santiago

Population (2010)

17,09 million people

Gross Domestic Product (2010)

US$ 203.300 million

GDP per capita (2010)

US$ 11.958

PPP GDP per capita (2010 est.) (PPP: Purchasing Power Parity)

US$ 15.400

Currency

Chilean peso CLP $

Approximate equivalence

US$ 1= $ 483; € 1= $ 667 (Sept. 2011)

Labour force

7,4 million people

Literacy rate

96%

Main industries

mining, aquaculture, forestry, agro-industry, banking, telecommunications

Main exports

copper, fruit, fish, wine, forest products

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Chile is a unitary State with its central government located in the capital, Santiago, in the central and landlocked Regi贸n Metropolitana. The rest of the territory is divided into 14 administrative regions, all of which have access to the Pacific Ocean. These regions were traditionally ordered from North to South, from I (on the border with Peru) to XII (including the Chilean Antarctic territory). The recently created XIV and XV regions were inserted as a result of the division of other regions and therefore do not follow the same geographical criteria.

1.2 National Science, Technology and Innovation System The National Science, Technology and Innovation System in Chile is composed of public and private entities such as government agencies, companies, universities, technological institutes and research centres which aim at developing research, technology, human capital training and innovation, as well as creating policies to support this. As part of this system, the government formulates public policies, develops research at the national level and supports research and innovation performed in companies and universities through different funding schemes and financial incentives. State participation is essential for the coordination of the different actors of the System and the development of networks. The State establishes priorities and objectives in this area and defines the National Innovation Strategy to orient the System.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Although industry does not conduct a significant amount of research, they finance an important percentage of the research performed by universities and private institutions. Enterprises are where innovation is produced and used. Therefore, a higher participation of the industry sector in research projects must be encouraged since they play a fundamental role in technological innovation by developing the concepts, ideas and knowledge produced by scientific institutions. The education sector forms specialised human capital who later participates in innovation processes at universities and private companies. Universities and research centres develop most of the fundamental research and contribute in applied research and technological development. This activity is financed through direct government contributions, government grants, private company funds and international resources. In Chile there are several public sector agencies in charge of executing Science, Technology and Innovation activities. Some of these are independent institutes and others are under the supervision and dependence of a Ministry. These agencies focus on research, development, transfer and dissemination of technologies in different areas such as agriculture, forestry, mining, fisheries, defence, and public health. The National Science, Technology and Innovation System is regulated by a series of norms1 related to research and innovation such as norms on scientific intellectual property, industrial property, on funds for financing scientific and technological research and tax incentives for scientific and technological research among others. In 2005, The National Council of Innovation and Competitiveness was created to propose guidelines for a National Innovation Strategy. Council members include high level authorities from the public, scientific, academic and private sectors. Taking into consideration the opinion of the academic and productive sectors, representatives from different regions and the civil society, the Council integrates diverse visions in order to define national priorities for strategically oriented scientific activities, public policies and to develop an efficient National Innovation System. Following a recommendation of the Council, the Interministerial Committee for Innovation and Competitiveness was formed in 2007 and is integrated by representatives of seven ministries to serve as a counterpart of the Council and implement public innovation policies for competitiveness. The Committee of Ministers defines the National Innovation Strategy after consideration of the recommendations of the authorities from the National Commission for Scientific and Technological Research (CONICYT) and the Chilean Economic Development Agency (CORFO).

http://www.bcn.cl/leyes_temas/leyes_por_tema.2007-09-03.7728937048

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

President of Chile

National Council of Innovation

Human Capital Science and Technology

Interministerial Committee for innovation

Innovation

MINEDUC CONICYT

Innovation strategy and guidelines

MINECON CORFO (Innova Chile)

Promotes the formation of advanced human capital Strengthens the scientific and technological base

Promotes innovation and technological diffusion

National Science, Technology and Innovation System

The National Commission for Scientific and Technological Research (CONICYT) is in charge of promoting the formation of advanced human capital, disseminating scientific and technological research and strengthening the country’s scientific and technological foundation. CONICYT is an autonomous public institution which is part of the National Science, Technology and Innovation System and which relates administratively with the government through the Ministry of Education (MINEDUC). The Chilean Economic Development Agency (CORFO) is responsible for increasing competitiveness in Small and Medium Scale Enterprises through innovation and technological dissemination. With this main aim, CORFO finances entrepreneurship, technology transfer and innovation in SMEs, seeks to attract foreign investment, and supports optimisation of management of procedures. CORFO is part of the Ministry of Economy, Development and Tourism (MINECON). As part of the National Innovation Strategy, five economic sectors have been identified as the ones which offer more development potential for the future: Aquaculture, Agri food, Mining, Global Services and Special Interest Tourism. A large amount of the research CONICYT supports and funds corresponds to the areas of Environment and Energy due to their importance for the development of the country in general, and in the areas of Education and Health since these significantly impact the population’s quality of life. CONICYT also focuses on Chile’s unique natural conditions in order to develop research in the areas of Earth Sciences and Oceanography, and Astronomy.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

It is in the country’s best interest to increase the number of professionals working in science to a level comparable to countries of similar size and productive profile which excel for their economic growth and innovation. In this sense, the National Innovation Strategy aims at forming advanced human capital that will contribute to the economic, social and human development of the country. In 2009 the National Statistics Institute of Chile (INE) conducted the first national R&D survey which complies with OECD standards. The survey presented that in 2008 the national expenditure allocated for R&D in Chile was of USD 674 million representing 0.4% of the country’s Gross Domestic Product. In more advanced countries, a close relationship is observed between levels of development and of quality of life and the relevance that RTD has in governmental policies. Chile should continue increasing its investment in science, technology and innovation for the forthcoming years and achieve a higher participation and contribution of the business sector in this effort. It is noticed that in countries with a high RTD investment, the participation of the private productive sector is essential and reaches more than 60% of the total2. The aforementioned survey revealed that the industry sector in Chile financed 43.7% of the expenditure in R&D in 2008. According to the National Innovation Council for Competitiveness, Chile’s RTD expenditure should reach 2.3% of the GDP by 2020 and about half of the resources should be contributed by the private sector3.

1.3 Funding schemes for Science, Technology and Innovation There are various national funding schemes for science, technology and innovation. The Chilean Economic Development Agency (CORFO) and the National Commission for Scientific and Technological Research (CONICYT) play a key role in the system in financial terms. CONICYT’s programmes and funding schemes are divided into two separate lines: the promotion and strengthening of the national scientific and technological foundation and the formation and training of advanced human capital. Scientific and Technological Foundation • National Fund for Scientific and Technological Development (FONDECYT): It is the country’s main public fund aimed at supporting and strengthening individual basic research. It finances research projects of excellence in all areas and has caused a significant impact in the generation of a critical mass of researchers.

http://www.conicyt.cl/573/article-35902.html

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

• Fund for Financing Research Centres of Excellence (FONDAP): This funding scheme supports the establishment or strengthening of centres in research areas which are relevant for the country and where basic national science has reached a high development level. Besides promoting research of excellence, these centres are oriented towards the training of advanced human capital and collaborative networking. • Fund for the Promotion of Scientific and Technological Development (FONDEF): This funding scheme aims at promoting a relationship among research institutions and companies for the development of applied research projects, precompetitive development and technology transfer. All projects must have a high socio-economic impact and be oriented to creating or improving products, processes and services. • Astronomy Programme: It seeks to support and strengthen the development of astronomy in Chile by providing grants in this field, managing observation time at telescopes in the north of the country, and managing doctoral and post doctoral scholarships in astronomy among others. • National Fund for Research and Development in Health (FONIS): FONIS was created as a result of a joint effort by the Ministry of Health and CONICYT. Its mission is to create greater technological and scientific development, which in turn will allow better public health decisions to be made in the country at both policy level and clinical and management level. In order to achieve its objective, this programme finances projects which contribute to the improvement of decision-making in health. FONIS’ beneficiaries are universities, research centres related to health or academics or health personnel directly. • Associative Research Programme (PIA): This programme aims to promote the articulation and partnership between different groups of researchers and other national and/or international groups from the academy and/or the private and public sectors. PIA supports the strengthening of structured groups in research areas of excellence at national level, thus contributing to the economy and competitiveness of the Chilean society. The programme is founded on four lines of actions that provide support for: Research Rings, Research and Development Centres, Scientific and Technological Equipment, and Articulation and Liaison. • Regional Programme for Scientific and Technological Development: This scheme supports units of scientific and technological development located in the different regions of the country to promote decentralised research.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Training of Human Capital â&#x20AC;˘ Advanced Human Capital Formation Programme: This programme focuses its actions on supporting and strengthening the formation of advanced human capital in every area of knowledge, both in Chile and abroad. In order to achieve its goals, this programme has several postgraduate and complementary scholarships. Since 2008, the advanced human capital formation programme has been the executing agency for all postgraduate international scholarships under the BECAS CHILE programme. â&#x20AC;˘ Attraction and Insertion of Advanced Human Capital Programme: Its purpose is to increase the scientific, technological and academic capabilities of Chilean institutions devoted to science and technology, by means of attracting international researchers and by inserting highly qualified professionals in academia and productive sectors. In terms of innovation, through a variety of funding schemes, CORFO promotes technology innovation for companies, technological transference and dissemination, pre-competitive innovation, public-oriented innovation, and innovating entrepreneurship among others. In the past years, the country has set forth high-level initiatives, with diverse funding schemes, aimed at scientific and technological development and innovation. These intend to create an impact on productive sectors and knowledge by integrating the best capabilities of the country linking universities, technology centres, and research groups and in some cases, enterprises. The Millennium Institutes and Millennium Nuclei are examples of the most outstanding ones. These are integrated by associate researchers and young researchers, and aim at developing cutting-edge research, training young researchers, and working with collaborative networks with foreign centres. These focus their projects towards the industrial sector, education, the public sector and society as a whole. Both Millennium Institutes and Millennium Nuclei are financed through the Millennium Scientific Initiative, a government entity which is part of the Ministry of Economy, Development and Tourism (and which was formerly part of the Ministry of Planning). Apart from being financed by the Millennium Scientific Initiative, Millennium Institutes also receive funds from the Innovation Fund for Competitiveness (FIC). Chile is currently implementing through the International Relations Department at CONICYT three multilateral cooperation agreements in science and technology, as well as various bilateral agreements with European countries. The multilateral agreements are: i) STIC-Amsud with Argentina, Brazil, France, Peru and Uruguay in the area of Information and Communication Technologies, ii) MATH-Amsud with Argentina, Brazil, France, Peru and Uruguay in the area of Mathematics and iii) CYTED with Iberoamerican countries in the areas of food/agriculture, health, industrial development, sustainable development, ICT, social sciences and energy. Regarding the bilateral cooperation, Chile has signed agreements with institutions in Germany (DAAD, BMBF, Max Planck Society, Alexander Von Humboldt Foundation and DFG), with France (INRIA, INSERM, IRD, ANR, and the French Embassy), with the Region of Wallonia in Belgium

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

and with AKA of Finland. International experience shows that tax incentives are effective instruments for increasing the private sector´s expense in research and development. Also, a strong relationship between the private sector and research centres is essential for orienting the capacities of research centres towards the satisfaction of companies’ needs. In Chile, the ties between these sectors are still weak. In Chile, law n° 20,241 of the 19th of January 2008 regulates tax incentives for private investment in research and development. This law has the objective of increasing private investment in research and development and to strengthen the ties amongst universities or research centres and companies. It allows enterprises to obtain a tax credit equivalent to 35 per cent of the total payments of research and development contracts signed with Research Centres registered in the Research Centres Registry and certified by CORFO. This law will be in force until December 31, 2017.

1.4 Overview of the Chilean Energy Sector Throughout history, Chile has been characterised by a major dependence on foreign energy. In 2009, 60.1% of the primary energy inputs, with 97.3% of the oil, 27.5% of the natural gas and 95.5% of the raw coal consumed, were imported (CNE 2009a). The following figure shows the different fuels’ share within the energy matrix. Figure 1: Primary Energy Matrix

Firewood and other 20,55%

Wind Power 0,03% Hydroelectric 8,68%

Biogas 0,03%

Crude Oil 42,67%

Coal 16,01% Natural gas 12,05%

Source: National Energy Balance 2009, National Energy Commission (CNE, Comisión Nacional de Energía)

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Primary energy production has not fluctuated significantly, leaving imported energy sources to supply the growing needs. It should also be noted that oil has shown a significant rise in importance in the matrix in recent years. Figure 2: Evolution of Primary Energy 1999-2009

350.000 Teracalories

300.000 250.000 200.000 150.000 100.000 50.000

Consumption

Imports

09 20

08 20

07 20

06 20

05 20

04 20

03 20

02 20

01 20

00 20

Production

Source: National Energy Balance 2009, CNE

While Chile does have significant renewable energy resources (hydro, geothermal, etc.), these have not yet been exploited, and as can be seen in the information above, the majority of the countryâ&#x20AC;&#x2122;s energy needs are supplied using imported hydrocarbons.

1.4.1 Chileâ&#x20AC;&#x2122;s Energy Resources 1.4.1.1 Primary Energies The primary energy resources available within Chile are a critical variable in determining the main generation options available, while the absence of these resources obligates the country to turn to the international market to import them. It is essential to seek an energy generating base using existing national resources, which is why hydroelectricity has been the basis for the electrical grid, and is why using non-conventional

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

resources, such as wind, mini-hydro and solar, which are available in Chile, gives these options a big advantage when it comes to evaluating them as projects (CNE, 2009). The following is the current state of the country’s primary resources. • Crude Oil: The country imports 97.3% of its primary consumption. Imports are supplied mainly from Brazil (31%), Angola (15%), and Ecuador and Azerbaijan (14% each). The entire national production comes from wells located, on dry land and offshore, in the Magallanes Region, with a reserve of approximately 30 million barrels; this production is equivalent to 1.2% of the gross national consumption. The production volume is decreasing due to depletion and lack of new wells. • Natural Gas: Chile imports 27.5% of its primary consumption. Existing domestic production originates in the Magallanes Region, where the estimated reserve is 45 billion cubic metres, which is used primarily to meet that Region’s consumption. In the second half of 2009, following conflicts over importation of natural gas from Argentina due to their curtailed shipments to meet domestic demand, the first Liquefied Natural Gas (LNG) terminal in Chile commenced operations. This allowed for diversification of LNG sources, as the plant’s inputs come from various different countries. This has put an end to the previously heavy reliance on Argentinean sources. • Coal: Imports make up 95.5% of the primary consumption. Chile’s production comes from mines located in the Bío Bío, Araucanía and Magallanes Regions, which together have estimated reserves of 155 million tons. Coal extraction has been declining since 1991, with a reduction in production of nearly 90% through 2007. • Hydro Resources: Chile has hydroelectric plants (run-of-the-river and dam) throughout the country, except in the Antofagasta and Magallanes Regions. The total amount of hydro resources in the country is approximately 24,000 MW, of which there is an installed capacity of approximately 5,319 MW (CNE, 2009). • Nuclear: Currently there are no nuclear energy plants associated with electricity generation, but it is one of the country’s options for using non-conventional energy. Worldwide this technology accounts for about 16% of the generated electricity, equivalent to 9% of installed electric power. As shown in Figure 1., the primary energy supply in Chile in 2009 reached 249,569 TCal, distributed in the percentages presented in this figure.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

1.4.2.2 Non-Conventional Renewable Energy (NCRE) In early 2008, renewable energy was supplying 19% of the world’s end energy consumption, including traditional biomass, large hydro, and the “new renewable energies” (mini-hydro, modern biomass, wind, solar, geothermal and biofuels). A larger relative growth from the NCRE is expected within the so-called new energies. These renewable energies accounted for 60% and 50% of the new installed capacity in Europe and the United States respectively4.

Despite this trend, in Chile in 2009, non-conventional renewable energy sources accounted for only 6.1% of the installed electricity generation capacity (i.e. 986 MW of a total 16,082 MW). The resources considered are: • Biomass and Firewood: Firewood is available from the Coquimbo Region to the Magallanes Region with 294 MW installed. Given that it is renewable, consumption levels, at least in the medium term, are expected to remain stable. • Wind: At present this technology is delivering only 68 teracalories (79,070 MWh for 164 MW installed) of the 249,569 teracalories national gross consumption (CNE, 2009a). Nonetheless, given Chile’s high wind potential there are major projects underway aiming to change this balance, and in fact wind is one of the non conventional energy sources that has most progressed in the past years. • Solar: This is one of the technologies that requires major investment, but in the coming years, given economies of scale, the investments will likely be competitive with those currently in existence. The use of this kind of energy in Chile is small, mainly employed in thermal, both at the industrial and domestic level. Currently there are 2 approved projects of Photovoltaic Energy (18 MW), and others under analysis (372 MW) at the Environmental Assessment Service, nevertheless, none of these projects have been financed yet and therefore are not being constructed nor executed. • Geothermal: Currently there is no power being generated by these means, but the Chilean Ministry of Energy has requested bids for the investigation and subsequent exploitation of 21 geothermal fields. An investment of between U.S. $500,000 and $3 million is expected through the concession mechanism.

“Optimal NCRE Expansion Strategy in Interconnected Systems” FCFM Energy Center.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Figure 3: Installed NCRE Capacity in Chile, 2009

Wind 20%

Hydro <20 MW 41%

Biomass 39%

Source: National Energy Balance 2009, CNE

According to the Environmental Assessment Service (http://www.sea.gob.cl/), between projects already confirmed and in process of confirmation, approximately 2,900 MW of NCRE couldbe provided if these projects are eventually executed. Getting the project approved by the Environmental Assessment Service does not necessarily mean these will be implemented. Of these projects, 2,255 MW would correspondto the SIC (Sistema Interconectado Central or Central Interconnected System, which covers the central and most of the southern part of the country) and 650 MW to the SING (Sistema Interconectado del Norte Grande or Norte Grande Interconnected System, which supplies the northern zone of the country). There would bea sizeable contribution of 1,074 MW to the SIC(400 wind, 674 geothermal) and 2,900 MW to the SING(2,500 wind and 400 geothermal)5. Additionally, the Aysen and Magallanes systems cover the two southernmost regions of Chile.

1.4.1.3 Secondary Energy Sources Electricity: Historically, hydroelectricity has been the main source of energy in Chile, which means that electricity generation depends on weather conditions. Until 1995, oil and its derivatives were used for industrial and residential purposes. In the mid ‘90s, Chile began to diversify its energy matrix with the importation of natural gas, primarily for electricity generation, which reduced crude oil’s share of the matrix.

These figures were obtained from “Analysis of Wind Power Impact on the NGIS”, carried out by the Energy Centre at the Universidad de Chile for the GTZ (http://www.gtz.de), “Analysis of Wind Generation in Taltal’s Impact on the CIS”, developed by the Foundation for Technology Transfer for the CNE, and estimates of geothermal potential provided by the Chilean Ministry of Energy.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

However, in 2010, due to low rainfall, for the first time in Chilean history thermal generation surpassed hydroelectricity, 50% to 48% respectively, in the CIS versus the 59% share that hydroelectricity had in 2009. The installed power generation capacity is distributed in four systems across the country. These systems are virtually autonomous because large distances make integration difficult: • Norte Grande Interconnected System (SING), supplies the country’s large mines, with 3,572 MW of installed capacity. • Central Interconnected System (SIC), with 11,147 MW of installed capacity. • The Aysen and Magallanes systems, with 51.45 MW and 99 MW respectively (this is raw power, and does not subtract the plants’ own consumption). In 2009, installed capacity reached a total of 14,870.35 MW (compared to 5,635 MW in 1995 and 3,324 MW in 1985). (CNE, 2009)

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Figure 4: Installed Power Generation Capacity in Chile

SING 24%

3.572,7 MW

SIC 75%

11,147 MW

AysĂŠn 0,034

51,45 MW

Magallanes 0,66%

99 MW

NCRE 0,4% Conventional 99,6%

NCRE 3,45% Conventional 96,55%

NCRE 45,0% Conventional 55,0%

NCRE 0,0% Conventional 100%

Source: CNE, 2009

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Regarding electricity production, this is broken down as 43% from hydroelectric plants (dam and run of river), 28% coal (coal and pet coke), 19% oil (diesel, fuel oil and diesel-fuel), 9% natural gas (out of which 1.73% is LNG), and 1.7% from waste. The total generation for 2009 was 57,320 GWh. The breakdown is shown in the following figure. Figure 5: Electricity Generation by Source, 2009

Diesel - Fuel 0,16% Wind 0,13%

Fuel Oil 0,59% Diesel 17,57%

Dam 25,15%

Waste 1,71% Coal 16,92%

Run of river 18,20%

Coal - Pet Coke 10,86% LNG 1,73%

Natural Gas 6,99%

Source: National Energy Balance 2009, CNE

Petroleum Derivatives and other energy. Chile has processing centres for the production of petroleumderived liquid fuels, located in the Valparaíso Region (Refinerías de Concón), the Bío Bío Region (Refinería de Petrox), and the Magallanes Region (Refinería ENAP6), with a refining capacity of approximately 37,800 cubic meters per day in 2007. Chile also has production capacity for blast furnace gas, coke and tar, located in the Bío Bío Region, mainly at the Huachipato Iron and Steel plant. The following figure is a summary of the distribution of secondary energy sources in the country, according to the 2009 National Energy Balance.

Empresa Nacional del Petróleo / National Petroleum Company

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Figure 6: Balance of Secondary Energy Sources

Firewood 15%

Other 1%

Natural Gas 9% Petroleum Derivatives 47%

Coke 3% Coal 11% Electricity 14%

Note: “Others” includes tar, piped gas, furnace gas, methanol and biogas. Source: 2009 National Energy Balance, CNE.

The figure illustrates the importance of the petroleum derivatives, which account for nearly 50% of the country’s consumption. Wood and electricity follow well behind; with an approximate 14% share each. Separately, the figure below shows the balance of petroleum derivatives for the same year. Figure 7: Petroleum Derivatives, 2009

Jet Fuel 4,76%

Naphtha 0,65%

Aviation Gasoline 0,03%

Refinery Gas 2,21%

Liquefied Gas 10,09%

Fuel Oil 13,55%

Kerosene 0,83% Diesel 50,74% Gasoline 17,14%

Source: 2009 National Energy Balance, CNE

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

In this case, diesel oil is the most widely used fuel (around 50%), primarily in the transportation sector.

1.4.2 Chilean Energy Policy Guidelines According to CNE (2009) and CNE (2008), the big challenge facing the country’s energy policies is being able to expand the energy matrix enough to cover the expected growth in the demand of the power sector in the coming years. While in the long run there are a number of factors that can influence this increase in required production, including energy efficiency, technological development, implementation of environmental policies or models, among others; in the short run, the estimate is more accurate given the slow speed of development of the abovementioned factors. There are key points in Chile’s strategy for carrying out this task, one of which is to strengthen institutions that can implement policies consistently through organisations and legal regulations. Another important point is the need for promotion and development of energy efficiency, because in a scenario of growing energy demand along with restrictions and environmental sustainability, it is not enough to increase generation only by implementing more energy sources (CNE, 2008).

1.4.2.1 Energy Sector Regulation The management, regulation and oversight of the Energy sector currently involve a number of actors; namely: • Ministry of Energy. Created in 2009, its main objective is to develop and coordinate plans, policies and standards for the proper functioning and development of the sector, ensure compliance, and advise the Government in all matters pertaining to Energy. • National Energy Commission (CNE). A decentralised public agency in charge of “analysing prices, tariffs and technical standards to which production, generation, transportation and energy distribution companies must adhere, in order to provide a service which is adequate, safe and of high quality, while being economical”(CNE, 2011). • Superintendence of Electricity and Fuels (SEC, Superintendencia de Electricidad y Combustibles). It is a decentralised public service whose function is to oversee and supervise the compliance with laws, regulations and techniques related to liquid fuels, gas and electricity. Its nexus with the Government is through the Ministry of Energy. • Chilean Nuclear Energy Commission (CCHEN, Comisión Chilena de Energía Nuclear). A decentralised public service whose role is the development of nuclear science and technology. It deals with the production, acquisition, transfer, transport and peaceful uses of atomic energy. Its nexus with the Government is through the Ministry of Energy.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Recently in 2009, a new institutional framework in Chile was developed, through the creation of the Ministry of Energy (Law 20402). The legislation’s proposed institutional structure includes the following elements (CNE, 2008): • Separation of functions. All powers related to the design of policies, legal and regulatory provisions, plans and programmes will become the responsibility of the Ministry of Energy, which shall govern the country’s energy sector. Functions related to technical and economic regulation of the energy sector will remain under the competence of the CNE. • Sectorial co-ordination and integration of Chile’s regions. The Ministry’s highest authority will be the Minister of Energy. Internal administration and co-ordination of public energy services will be the responsibility of the Undersecretary of Energy. At the regional level, Regional Energy Ministry Secretariats (SEREMIs) will be established. • Co-ordination of environmental and energy policies. The Minister of Energy will sit on the Management Committee of the National Environmental Commission and the Regional Energy Ministry Secretaries will be members of the Regional Environmental Commissions. This arrangement will enable the integration of energy and environment policies.

1.4.2.2 Hydrocarbons Sector Chile’s Political Constitution establishes that “the State has the absolute, exclusive, inalienable and nonlapsable domain over” among others, “the deposits of coal and hydrocarbons and other fossil substances.” In particular it indicates that substances contained in the hydrocarbon deposits are not subject to the granting of exploration and/or exploitation, and therefore such activities “may be executed directly by the State or its agencies, or through administrative concessions or special operating contracts, with the requirements and under the conditions the President of the Republic determines, in each case, by Presidential Decree.” Within this context, the Chilean State has adopted a policy to promote Petroleum Operations Contracts (CEOP for the initials in Spanish) through the National Petroleum Company (ENAP), which can directly participate with private companies interested in these types of contracts”7. The Fuel Price Stabilisation Fund (FEPCO, Fondo de Estabilización del Precio de los Combustibles) was created in 2005 to improve the price stabilisation mechanism, and sought to reduce the variations in the domestic market prices caused by price variation in the international markets for gasoline, diesel, liquefied gas and kerosene. Previously, in 1991, as a result of the Gulf Crisis, the Oil Price Stabilization Fund (FEPP, Fondo de Estabilización de Precios del Petróleo) was created with the main objective of seeking domestic price stability for fuels by shielding these from the short-term volatility in the international markets. Both instruments are currently operating.

http://www.cne.cl/cnewww/opencms/03_Energias/Otros_Niveles/hidrocarburos/Tipos_Energeticos/petroleo_derivados.html

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Licenses are granted for transportation and distribution, which give the licensee certain rights and demand continuity of supply. In the case of gas transmission (provision to suppliers), licensees are required to provide open access to their available spare capacity. The natural gas distribution companies are free to set their own prices, except in the Magallanes Region, in the countryâ&#x20AC;&#x2122;s extreme south, where the price is set by the Government because of the special conditions prevalent in the region (i.e. geographic isolation and extremely cold temperatures).

1.4.2.3 Electricity Sector The regulation of the Chilean electricity sector stipulates that investments are made via private initiatives on the basis of economic signals from the marketplace but which remain subject to the regulations dictated by the authorities as follow:. Reference prices are fixed twice a year in April and October. The determination is made by the CNE through a Technical Report submitted to the Ministry of Economy, which sets them forth in a decree in the Official Gazette of Chile (Diario Oficial). One of the criteria used in the sector is that prices are freely set in segments of the market where there is competition. It is deemed that end users with connected power equal to or below 2,000 kW (Regulated Clients) are considered to be a sector in which natural monopoly conditions exist, therefore the law provides price regulation. On the other hand, end users with a connected power greater than 2,000 kW are considered to be Free Clients, who are assumed to have negotiation capacity and the ability to provide themselves alternate supplies of electricity, such as through self-generation or through direct supply from generating companies. In this case the law allows for free pricing. Users whose connected power is between 500 and 2,000 kW can chose to belong to one of the types of clients (Free or Regulated). The prices that the licensed public service companies must pass on to their Regulated Clients are called Average Node Prices (PNP, Precios de Nudo Promedio), which stem from modifications made to the General Law for Electricity Services (LGSE, Ley General de Servicios ElĂŠctricos) by Law 20,018 also known as the Ley Corta II. These prices have been applied since January 1, 2010, and consist of the weighted average of the following prices: a) Long Term Node Prices for energy (PNELP, Precios de Nudo de Largo Plazo de EnergĂa) and power (PNPLP, Precios de Nudo de Largo Plazo de Potencia): are those that must be paid by a licensed distributor to their supplier under the respective supply contract signed in accordance with the publicly regulated tender.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

b) Short Term Node Prices for energy (PNECP, Precios de Nudo de Corto Plazo de EnergĂa) and peak power (PNPCP, Precios de Nudo de Corto Plazo de Potencia de Punta): are the prices for generation/ transportation set semi-annually in April and October of each year under Article 160 of the law8. Finally, the fees paid by Regulated Clients of the distributors are composed of the prices for generation and transportation plus the amount added for the distribution cost.

1.4.3 Sector Consumption and Energy Development According to the Energy Balance (2009), Chileâ&#x20AC;&#x2122;s energy consumption is determined by the end consumption of the three major consuming sectors: Transportation; Industrial and Mining; and Commercial, public and residential (CPR). Because mining consumption is so significant, it is best to separate it from the Industrial sector, and consider the mining sub-sectors of: copper, iron, nitrates, and miscellaneous. Transportation drives the highest energy demand, accounting for 35% of end energy consumption. In this case, energy consumption is 99% concentrated in only one source, namely petroleum derivatives, which basically include diesel fuel and gasoline. There is also some smaller scale electricity consumption tied to the Metro and Light Rail, and gas associated with a fleet of light vehicles. The CPR sector represents 25% of the final energy consumption. The largest energy source here is firewood, accounting for 47% of total consumption, a source which is mainly used for cooking and heating. Electricity and petroleum derivatives are also important components of the final demand, with a 23% and 21% share respectively. Natural gas has increased in importance, and now represents 9% of the final demand in this sector. The Industrial sector accounts for 21% of the final demand, and consumes from fairly diversified sources, which requires resources from all of the sources mentioned. However, 65% of the energy consumption is concentrated in three sources: Petroleum Derivatives (30%), Electricity (25%), and Firewood (29%). Lastly, the mining sector consumes 14% of the final energy total. Electricity is an important source for this sector, accounting for 50% of total consumption. Petroleum derivatives, in turn, supply 47% of energy consumed.

Components of Average Node Price, provided by the CNE, http://www.cne.cl/cnewww/opencms/07_Tarificacion/01_Electricidad/ Otros/Precios_nudo/precio_nudo_promedio/precio_nudo_promedio.html

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

1.5 Description of Chile’s Science and Technology System on Energy Currently, there is no coherent strategy or system to prioritise activities and guarantee continued research, development and deployment of new and improved energy technologies. In its Energy Policy: New Guidelines, the CNE recognises the importance of developing a long-term vision for the energy sector, as the sector is seen as playing an important role in the country’s long-term development. To address this gap, the CNE is currently in the process of developing a new national energy policy (IEA, 2009). In spite of not having an energy R&D strategy, there are different entities seeking to develop its scientific aspects and encourage technological progress. To this end, there are both, institutions created by collective initiatives and universities that seek to develop Chile’s technological development and carry out government generated proposals.

1.5.1 Institutions and Policies 9 In2007, public funding is the major contributor to R&D expenditure (53%). The private sector accounts for 37% of this total and 10% come from other sources10. To ensure coordination across different ministries, a committee (the Ministerial Innovation Committee) is now officially responsible for the coordination of public innovation policies (see Figure 8). CONICYT and CORFO are key entities in this system and are responsible for the implementation of this action plan. The following diagram showsthe role ofthesetwo institutionsin theNationalInnovationSystemandthe programs they manage currently. Programmes managed by CONICYT The National Scientific and Technological Development Fund, FONDECYT, selects and funds research projects based on merit. The Fund has financed over 70 energy-area projects in the past 20 years for a total amount of 3,500 million Chilean pesos (5 million Euros). The projects focus on energy efficiency, renewable energy (mainly solar), biofuels and lithium batteries. The Fund for the Promotion of Scientific and Technological Development (FONDEF) is a co-financing scheme that requires complementary private funding. FONDEF has one line of financing specifically devoted to energy, which between 2006 and 2009 funded over 20 energy projects (primarily renewable) for a total of 7,000 million Chilean pesos (approximately 10 million Euros.) Apart from these funds, there are specific programmes for regional development, applied Centres, and an Associative Research Programme (PIA) that supports groups of researchers and different Centres of Excellence.

Based on Chile Energy Policy Review, 2009.

The energy sector in Chile – Research capabilities and science and technology development areas, CONICYT, 2007.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

In 2010, CONICYT held the Third National FONDAP Centres of Research Excellence Competition, where the creation of the Los Andes Geothermal Centre of Excellence from the School of Physical Science and Mathematics of the Universidad de Chile was selected to be financed for five years. In this instance over $3,610 million Chilean pesos (over 5 million euros) were awarded. The aim of this Centre is to generate the scientific basis for developing models of geothermal reservoirs in Chile. In 2010, CONICYT and the Ministry of Energy held a contest to stimulate the Development of Small-Scale Non-Conventional Renewable Energy (NCRE) Solutions. The objective of this competition is to encourage innovation in the energy field by financing pilot-scale demonstration projects that will become applicable and repeatable small-scale solutions for use in rural, isolated or poor areas.The projects have a deadline of 12 months for their execution and the grants can be of a maximum of 10 million pesos (14.000 Euros), corresponding to a maximum of 80% of the total project cost. Additionally, this ministry and CONICYTâ&#x20AC;&#x2122;s Department of International Relations have an Internship Abroad Programme11that focuses on: Energy Storage; Energy Efficiency; NCRE â&#x20AC;&#x201C; General, Solar, Low and MediumEnthalpy Geothermal, Bioenergy, Ocean Energy, Small-Scale Hydro, Hybrid Electricity Generating Systems, Distributed Generation, Methane Hydrates, Coal Bed Gas Extraction (CMB), Clean Coal, and Nuclear Energy. As part of the same programme, these institutions are developing an initiative of Courses for Skills Training in the Energy Sector12 which includes the same fields outlined in the contest mentioned above, along with Heat Production Technologies (Heating) and Reconstruction (incorporating NCRE and energy efficiency in their design). Programmes managed by CORFO CORFO, through the Innovation Promotion Agency created by InnovaChile in 2005, is actively engaged in helping Chilean firms improve their international competitiveness. Priorities for funding include technology transfer and dissemination as well as pre-competitive research and innovation. Since 2005, InnovaChile has supported 68 innovation projects related to energy, with a public funding contribution of 10 million Euros. Among the main beneficiaries are University R&D Research Centres involved in private sector projects and energy related small- and medium-sized companies. CORFO has developed a series of initiatives related to energy efficiency, nonconventional renewable energy, and greenhouse gas emissions, among others. It is important to highlight the following:

(http://www.conicyt.cl/573/article-37033.html)

(http://www.conicyt.cl/573/article-37031.html)

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

• The creation of technology company consortia, promoted by CORFO’s InnovaChile and CNE, for the study of second generation algae based biofuels. US$ 31.6 million were allocated to this initiative, Desert Bioenergy, AlgaFuels and BAL Biofuels S.A. were the winning consortia. The consortia were launched in 2010 to create a sustainable energy model and strengthen Chile’s scientific and technological capabilities. • Creation of the first coal research centre in Magallanes (Universidad de Magallanes), supported by CORFO’s InnovaChile and the private sector, with the objectives of creating a coal characterisation laboratory; creating the technical capacity to design, build and operate a pilot combustor to study the behaviour of combustion mixtures; stimulate and develop human capacity for applied research in the development of Magallanes’ coal, where the estimated economically recoverable reserves are approximately 50milliontons, and the creation of national and international networks. 632 million pesos (900.000 Euros approximately) will be invested in the project. • Additionally, in 2008, InnovaChile tendered two projects to the Universidad Católica de Valparaíso and the Fund for Technology Transfer to create two entities to execute projects related to the Clean Development Mechanism of the Kyoto Protocol. The goal is to support new projects to reduce greenhouse gas emissions, especially in small- and medium-sized businesses, through partnership initiatives. The entities that have emerged from the tender are the Carbon Market Development Centre – ChileCO2 (www.chile-co2.cl) and the Centre for Management and Enhancement of a Clean Development Mechanism. Public research centres play an important role in energy R&D in Chile. There are 36 university research centres that have some sort of focus on energy. More than half are developing small-scale non-conventional renewable energy (NCRE) projects. Of the remainder, 11 focus on electricity-based R&D, seven on general and cross-cutting issues, and one,the Chilean Nuclear Energy Commission (CCHEN, Comisión Chilena de Energía Nuclear13),addresses nuclear issues such as applications of radiation, although it does not conduct research on nuclear energy. Two entities have been recently established: the Chilean Energy Efficiency Agency (ACHEE, Agencia Chilena de Eficiencia Energética) and the Centre for Renewable Energy (CER, Centro de Energías Renovables). ACHEE is an executive agency responsible for the implementation of energy efficiency programmes. The CER has a lead role in promoting renewable energy technologies in the market and functions as a clearinghouse connecting research entities and private companies to the international network of renewable technologies. The Centre will also monitor the effectiveness of policy instruments and identify barriers.

The Chilean Nuclear Energy Commission (CCHEN) is primarily oriented to advising the government on issues relating to the production, acquisition, transfer, transport and peaceful use of nuclear energy. To date the development of nuclear-powered electricity generation has not been its main focus.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

1.5.2 Financing Sources and Private Sector Participation While private participation in R&D is low, there are some recent initiatives in whichprivate companies have collaborated, some of which are highlighted below. The first example is the ENDESA14 Circle of Innovation (CIDE), which aims to carry out technological developments with clear mutual benefits together with the main electrical distribution suppliers. Permanent relationships with various universities have been strengthened, including Universidad Católica de Chile, Universidad Técnica Federico Santa María, Universidad de Santiago and Universidad Mayor. In the same vein, as members of the Innovation Club, which belongs to the Centre for Innovation and Technology (CIT, Centro para la Innovación y Tecnología) of the Adolfo Ibáñez University, collaborative initiatives have been undertaken with companies such as Siemens and 3M, among others. In these collaborations, through various activities, experiences related to innovation are shared, creating synergies that can lead to areas of interest among members, and create common opportunities. In the academic and research support areas, ENDESA Eco (renewable energy branch of ENDESA) participated actively in Universidad Católica de Valparaiso’s (PUCV) Private-Public Committee for the development of Biogas Projects in Chile, and in the project of creating a promoter for the carbon market, led by Universidad de Chile and Fundación Chile. The National Petroleum Company (ENAP), through its subsidiary ENAP Refinerías S.A., participated in the creation of the Biofuels Technology Consortium S.A., “Biocomsa,” which was built in August 2009, under the umbrella of InnovaChile CORFO. For its part, COLBUN, the electricity generating company, together with the Universidad Católica de Chile, developed a project called “Capacity Building to Meet Global Change in Chile”, funded by CORFO’s Innova-Chile Committee. Finally, ENEL and the National Petroleum Company (ENAP), signed an agreement for the development of two projects for the exploration and production of geothermal energy in southern Chile. ENAP seeks to develop Chile’s geothermal resources in three geographical areas: Apacheta-La Torta (Region II), Calabozo (Region VII) and Chillán (Region VIII).

1.5.3 Key Indicators Because research in Chile is primarily carried out at university level, an indicator based on the number of research publications will show the current state of research within the country and in relation to neighbouring countries. According to the 2010 Scimago Institutions Ranking (SIR) for Ibero-America, Chile generated between 2003 and 2008nearly 24,000 publications, of which 62% were concentrated in three universities: The Universidad de Chile, the Universidad Católica de Chile, and the Universidad de Concepción. (http://www.scimagoir.com/pdf/ranking_iberoamericano_2010.pdf).

Empresa Nacional de Electricidad (National Electricity Company)

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

In the energy area, over the last 10 years, more than 180 ISI publications have been generated on topics of interest to the Seventh EU Framework Programme in the areas of engineering, geology, electrical and electronic engineering, environmental, and fuels, among others. The following figures show the evolution in numbers of citations and publications over this period. Figure 8: Citations and Published Energy-Related Items, By Year

300 250 200 150 100 50 0 2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

2008

2009

2010

2011

Years

35 30 25 20 15 10 50 0 2001

2002

2003

2004

2005

2006

2007

Years Source: ISI Web of Knowledge, Published by Thomson Reuters. http://apps.isiknowledge.com

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

In terms of patents generated in this area, from 2000 â&#x20AC;&#x201C; 2011, 20 national patents have been identified (INAPI, 2011).These have been developed mainly in the areas of energy efficiency, solar, wind and undimotriz. In terms of scholarships granted for studying abroad by the government through the Becas Chile programme, between 2008 and 2009 a total of 3,081 scholarships were awarded, including those for various types of postgraduate study. (http://www.becaschile.cl). Additionally, in 2008, public investment in innovation for competitiveness amounted to 400 million Euros, more than double the amount allocated in 2005. To date, the Innovation Fund (FIC) has substantially elevated public investment in innovation, with an 18% increase between 2006 and 2007, and a 39% increase between 2007 and 2008, and a 21% increase between 2008 and 2009. In relation to sums allocated to the energy sector, in 2008 the Fund contributed 266 million Chilean pesos (approximately 400.000 Euros) to the Programme for Investment in the NonConventional Renewable Energy Industry and CDM (Clean Development Mechanism) â&#x20AC;&#x201C; CORFO. In addition, they co-financed 500 million Chilean pesos (approximately 750.000 Euros) of projects related to renewable energy and energy efficiency. Figure 9: Public Investment in Innovation (*). In real terms, carrying the figure through 2009 the National

Innovation System will grow 27% from 2008, and the Innovation Fund will grow 21%.)

294.997 300.000

27%

15.669

233.163

218.275

20% 7%

MM$

133.944

29%

118.244

157.861

148.868

117.110

26% 21%

279.330

169.254

39% 18%

133.944

51.010

60.414

84.296

102.220

2005

2006

2007

2008

2009

AFD Becas Fondo Bicentenario

AFD

FIC

Source: Initial Yearly Budgets Law - Budget Office, Ministry of Finance, Government of Chile (DIPRES). Numbers in 2009 Chilean pesos.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

The Innovation Fund (FIC) directs resources to scientific research, business innovation and entrepreneurship, among others, through specialised public agencies. The main ones are CORFO’s Innova Chile and CONICYT, totalling 93% of the expenditure in 2007. In addition, there are programmes implemented through FIA, the Millennium Scientific Initiative (ICM) and some programmes from the Ministry of Education. In 2008, the FI Call located resources in the energy area for 1,400 million pesos (2 million Euros) through InnovaChile and 16 million pesos (23.000 Euros) through CONICYT initiation projects.

1.6 description of the current situation on Science and Technology in energy 1.6.1 Science community on energy There is a growing critical mass composed by researchers working on energy issues, mainly renewable energies and energy efficiency, throughout the country, even including the southernmost regions. 46 institutions related to this area, either research centers or university departments have been identified. They house around 150 researchers, amongst whom 75% hold a PhD and 15% have a Master’s degree. Regarding the areas about energy proposed by UE’s FP7, around 180 research projects have been undertaken by these researchers. The number of researchers and research centers per region related to energy is presented as follows. Those regions non-listed hereby have neither research centers nor researchers on energy. Region

Nº of researchers

Number of research centers

II de Antofagasta

IV de Coquimbo

V de Valparaíso

VII del Maule

VIII del BíoBío

IX de la Araucanía

XII de Magallanes y Antártica Chilena

XIV de los Ríos

XV de Arica y Parinacota

RM Metropolitana de Santiago

Total

149

Fuente: Elaboración propia

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

1.6.2 Centers and Universities There is an outstanding work about energy going on at universities, mainly focused on new renewable energies development, which is a great challenge for this country. Organized from north to south, the following institutions highlight on energy issues: Universidad de Tarapacá ● CIDEA, regional center for research on energy and water (http://www.conicyt.cl/fondef/bases/fondef/ PROYECTO/06/I/R06I1001.HTML). It aims at making a contribution to the research projects applied to water and energy resources enabling the region’s development15. Universidad de Antofagasta ● Antofagasta center for the energetic development (http://www.uantof.cl/cdea/). This center promotes innovation, applied research and development related to the region’s energetic needs16. Its main research lines are photovoltaic projects, biofuel development based on micro-algae and the design study of the R&D Centre for concentrated solar energy. Pontificia Universidad Católica de Valparaíso ● Interdisciplinary Centre on Energy, (http://www.vriea.ucv.cl/index.php/investigacion-asociativa.html). its mission is “to develop, on a systematic and ongoing manner, studies and research about energy, beginning at the providing sources as far as the final use.”17 Universidad Técnica Federico Santa María ● CIE, Centre for strategic Innovation, (http://www.cie.usm.cl/). This center seeks “to make a contribution, through technological innovation on energy, in order to improve the link between the national development needs and the university capacity in terms of energetic innovation.”18 Its working areas are: new renewable energies, energy efficiency and the training on energy management and new renewable energies.

http://www.uta.cl/

http://www.uantof.cl/cdea

http://www.vriea.ucv.cl/index.php/investigacion-asociativa.html

http://www.cie.usm.cl/

15 16 17 18

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Pontificia Universidad Católica de Chile ● The Energy Group (http://web.ing.puc.cl/~power) at the Electric Engineering Department (http://web. ing.puc.cl/~wwwiee). This department focuses on the economic area related to the development of energy systems.19 Amongst the research interests within this group: electronic control of electric devices; electric vehicles and electric drive; economic operation of electric systems; energy efficiency on electric systems; operation, planning and economy about energy and electric systems; applied microeconomics and regulation of the electric sector. ● Centre on Global Change (http://cambioglobal.uc.cl/). This centre rises out of the alliance of four schools: Engineering; Econommics and Management; Biological Sciences; and Agronomics and Forestry engineering. It points its endeavors towards the development of basic and applied research about the human and biophysical dimensions of the global change.”20 Universidad de Chile ● Energy Centre at the Electric Engineering Department (http://www.centroenergia.cl) This centre works on: smart networks and supplied generation; electric vehicles; and systems for gathering and developing the supporting tools for decision taking.21 Among the major initiatives and projects, it highlights the creation of the first Centre on Lithium Innovation which will develop this potential in collaboration with the Catalonian Institute on Nanotechnology plus the VTT Technical Research Centre of Finland. This initiative aims to provide this compound a larger added-value, which is highly important for the country. ● Domeyko Research Programme on Energy (http://www.uchile.cl/domeykoEnergia). This group gathers most of the researchers related to energy at this university and they work the following issues: energy efficiency at local governments; assessment on the production potential for biogas in Chile; wind energy’s maximum penetration into the Chilean electric system; maximizing the lignocelluloses to obtain bioethanol; biomass production for bioenergetics purposes; regulation and new renewable energies. They also offer a diploma to train experts on renewable energies.22 ● Electric engineering department, (http://www.die.uchile.cl/2010). The areas it develops focus on several topics about electric engineering. This department develops the following research lines: modeling, simulation and controlling of dynamic systems; maximizing generation process; transmission, distribution and consumption of electric energy; computing intelligence theory and applications (neuronal networks, evolutionary computing and diffuse systems); biomedical engineering; digital processing of signals and patterns recognition; robotics and autonomous systems; among others.

http://web.ing.puc.cl/~wwwiee

http://cambioglobal.uc.cl

http://www.centroenergia.cl

http://www.uchile.cl/domeykoEnergia

19 20 21 22

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

● PRIEN, Studies and research on Energy Programme, (http://www.prien.cl). This programme works on projects related to energy efficiency and renewable energies. ● Programme on management and environmental economics, (www.progea.cl). This programme carries out projects related to energy efficiency, renewable energies and its impacts in terms of greenhouse gas emission. Universidad Adolfo Ibáñez ● Centre for energy innovation, (http://www.uai.cl/energia/index-2.html). Its mission is “to promote innovative solutions for Chilean energy challenges considering the technological progress, the environmental impact, policy plus the business feasibility.”23 Universidad Austral de Chile ● Centre for sustainable energy, (http://www.fci.uach.cl/ces/). This centre develops projects related to low energy consumption sustainable building. Universidad de Magallanes ● CERE, Centre for studies on energy resources, (http://www.umag.cl/investigacion/cere.php). It offers “innovative solutions for energy planning and usage of productive natural resources, specially the energetic ones, in harmony with the environment.”24 It mainly focuses on promoting the region’s potential for wind energy generation. ● Centre for research on Magellan Carbon, (http://www.umag.cl/investigacion/centros.php). This initiative launched in 2011 is funded by the INNOVA-CORFO Programme, and works in collaboration with some private sector firms such as Isla Riesco Mining, Edelmag and PCM fuel laboratory. This project aims to set up the human and technical capacities within the region in order to study the Magellan carbon combustion. ● Electric engineering Department at the School of Engineering, (http://www.umag.cl/facultades/ ingenieria/electricidad/). This department develops some projects related to power electronics and activation, along with projects on new renewable energies, especially about wind energy.

http://www.uai.cl/energia/quienes.html

http://www.umag.cl/investigacion/cere.php

23 24

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

1.6.3 Research areas on energy in Chile and their development The research lines on energy aimed by EU FP7 are: hydrogen and fuel cells; renewable electricity generation; renewable fuel production; renewable energies for heating and cooling; CO2 capture and storage technologies for zero emission electricity generation; clean carbon technologies; intelligent networks on energy; energy efficiency and saving; and knowing the energy policy. A brief state of the art description at national level about the aforementioned areas is presented below. In addition, the main research centers working on these areas are also presented along with some example of projects. Hydrogen and fuel cells. The hydrogen usage as energy vector requires the development of the supply chain, from carbon hydrogen production to the effective conversion of hydrogen with fuel cells to feed final appliances. Fuel cells can be used for a wide range of application such as miniature mobile energy (replacing the batteries in mobile electronic devices), transport (e.g. a zero emission propulsion system), and the energy generation in several sizes (e.g. domestic energy and heating combined systems, as well as full size energy stations and quadri-generation.) This is a hardly studied area in Chile and three universities only are working on it having some incipient results. Universidad de Chile has driven two studies: “Study on a catalytic system hydrogen production based on primary alcohols” and ““Hydrogen production from biomass-derived sources”. Universidad Católica de Valparaíso undertook the “production and optimisation of acid-genesis process to obtain bio-hydrogen as a renewable energy source within a global system for organic waste processing (probio-h2)” and Universidad de Concepción carried out the study “Development of power electronic converters for performance improvement in residential and distributed generation fuel cell systems.” A list of Chilean research centres working on the energy areas aimed by EU FP7 is presented in Appendix 1. Renewable electricity generation. In Chile, there are 28 university centres doing research on solar, geothermal, micro-hydraulic and wind energy, mainly in the north (solar and wind) and central regions. For instance, the most recent projects about resources potential estimation focus on solar, geothermal and tidal power. Most researches aim to determine how feasible it is to use these resources for electric generation as well as the improving the generation technologies (wind propellers and photovoltaic panel). A list comprising the projects on R&D carried out in Chile is presented in Appendix 2. Renewable fuel production. Renewable fuels have gained reputation due to its sustainability, low contribution to carbon cycle and, in some cases, fewer greenhouse gas emissions. Geopolitics consequences out of this fuels are also interesting, especially in the industrialized economies willing to become oilindependent from the Middle East.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

In Chile, there is a wide development in the research vis-à-vis this area. At present, some studies are being carried out about the use of lignocellulosic materials, biomass waste, algae, wood energy, among other sources, in order to produce ethanol and biodiesel. In particular, ten university centres drive research related to biofuel and the usage of biomass among others, as well as studying energy potential these latter have for the country. To name some interesting projects examples in the country: optimizing the treatment process of lignocellulosic aiming to obtain ethanol, research carried out by the Agronomics School at Universidad de Chile; analyzing the life-cycle for several options of biomass usage as an energy source, in charge of the Technological Development Unit (UDT) at Universidad de Concepción; analyzing the energy potential and the biofuel’s polluting emissions, led by the Centre on environmental technologies (CETAM), at Universidad Federico Santa María; plus the development of a technological business consortium on biofuel research based on lignocellulosic materials (Biocomsa) which involves research institutions with private firms.25 Renewable energies for heating and cooling. Usage of renewable energy systems for home and factory heating and cooling has drawn little attention vis-à-vis the renewable biofuel for electricity or transport. The mature technologies about renewable energy for heating and cooling using solar, biomass and geothermal sources are currently available as a profitable mean to reduce the CO2 emissions plus the dependence on fossil fuels, under many circumstances. Some other technologies are about to achieve a wide spread display in the market (IEA, 2007). The electric engineering and geology Departments at the Universidad de Chile are the principal ones researching on this area. Also the electric engineering and the mechanics Departments at Pontificia Universidad Católica de Chile in addition to Universidad de Magallanes have carried out projects on this line. CO2 capture and storage technologies for zero emission electricity generation. CO2 capture and storage technologies is one of the principal bet on technologies carried out by some developed countries (US, UK) in order to relieve the greenhouse effect gases produced by power generation plus some other greenhouse gas emission process (GEI) (IPCC, 2005). Notwithstanding, R&D in this area has only reached a pilot phase level. Currently in Chile, there is no research centre working on this area.

Consorcio Maderero S.A., ENAP Refinerías S.A. y la Universidad de Chile. (Facultad de Ciencias Forestales y de Conservación de la Naturaleza), con fondos de InnovaChile de CORFO.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Clean carbon technologies. This comprises the development and demonstration of clean technologies converting carbon and some other solid hydrocarbons referring to both the current facilities and the future ones. This also includes the conversion technologies, specially the chemical process, producing the secondary energy vectors (hydrogen) plus solid and liquid fuels. Regarding this latter, the electric engineering Department at Pontificia Universidad Católica de Chile, the electric engineering Department at Universidad de Chile along with its Energy Centre and the Universidad de Concepción, are the ones which have progressed on this area. Amongst this progress, some projects are noteworthy: “Co-combustion of carbon-sawdust mix in the thermal generation of electricity. Phenomenological and kinetic features”; “Efficiency prediction on carbon mix combustion, through index based on constituent carbons maceral composition” and “Mixed carbons combustion in the thermal generation of electricity.” Intelligent networks on energy. This technology has been developed for several decades in the world and in Chile for some years of research. The electric engineering Departments at Pontificia Universidad Católica de Chile and Universidad de Chile along with the Energy Centre are the ones which have worked on this area the most. One of the most outstanding projects in this area carried out in Chile is the creation of a multi-generation electric micro-network in a northern town of the country, Huatacondo (http://www.dicyt.com/noticias/ primera-microrred-a-base-de-energias-renovables-de-chile), developed by the Energy Centre at the Universidad de Chile. This village is not connected to SING and it used to get energy out of a diesel based engine, prior to the project implementation. At present, the system works based on solar, wind, batteries and diesel energy. The micro-network is able to provide around 80 inhabitants with electricity 24 hours a day. Energy efficiency and saving. There are several institutions in Chile developing research and appliances for energy efficiency. Noteworthy are: the Programme of Studies and Research on energy in the Public affairs Institute at Universidad de Chile which has been working on this field for over 20 years; the Architecture Schools at Universidad de Chile, Pontificia Universidad Católica de Chile and Universidad de Concepción; as well as the brand new Chilean Agency on Energy Efficiency. Some of the principal lines on energy efficiency carried out by Chilean researchers are: energy efficiency in local government activities; taking into consideration the energy efficiency in building projects and its climate change link. Some of the most outstanding projects collected in the country are: “taking into consideration the energy efficiency in building projects”; “Technological Node on energy efficiency, new renewable energies and clean mechanisms for the northern mining industrial sector and SMEs”, “Energy efficiency at local government activities (City Hall building). Solar Access in facades and the impact in the buildings thermal energy demand”; “Urban shape planning based on energy efficiency criteria.” These projects have been carried out by members of the Domeyko Energy Group at Universidad de Chile (Architecture and planning School) and the Engineering development Corporation in Arica.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Knowing the energy policy. This area comprises the activities related to DB and hypothetical models creation, the impact evaluation on energy, and the policy related to supply security, environment, society, energy industry competitiveness and public acceptability issues. Across the country, several institutions are working on projects related to energy development, energy efficiency policy, greenhouse gases reduction, renewable energies incorporation, among other. These institutions, their main projects and researchers are presented in appendix 1, 2 and 3.

1.6.4 Existing cooperation with the EU EU-Chile cooperation on energy issues has been crystallized for over a decade in the FP projects and other existing lines. As for FP7, 3 initiatives about this matter have been carried out in Chile. In the first place, “Biofuels assessment on technical opportunities and research (BIOTOP)”, undertaken by Pontificia Universidad Católica de Valparaíso in Chile; and some universities abroad from the Netherlands, Mexico, Brazil, Argentina, Austria, Denmark and Spain (http://www.topbiofuel.org). In addition, the “Sustainable energy technology at work: thematic promotion of energy efficiency and energy saving technologies in the Coal markets” (SETATWORK) project aims to promote energy efficiency within industrial sectors. Along with Chile (by P. Lehuede Ltda. Professional consulting), several European countries participate in this study as well as China, Thailand and India. It begun in 2008. (http://www. setatwork.eu). “The production of sustainable Diesel-Miscible-Biofuels from the residues and wastes of Europe and Latin America (DIBANET)” was launched in 2009. Along with Fundación Chile, some other countries also partake on it: Brazil, Denmark, Ireland, Argentina, Hungary, and Greece. (http://www.dibanet.org). Besides, currently underway the “Joint European-Latin American Universities Renewable Energies Project, JELARE” is a cooperation scheme involving universities from Germany, Latvia, Bolivia, Brazil, Chile and Guatemala. Its purpose is to foster innovative education and research proposals aiming to the renewable energy market in Europe and Latin America Higher Education Institutions. This project is funded by ALFA III, an EU cooperation programme with Latin America within the higher education and training framework (http://www.jelare-project.eu). Likewise, the EU “Thematic Programme on environment and natural resources sustainable management (including energy)” funds the “Promoting Renewable Electricity Generation in South America, REGSA” project. It aims to make a contribution to increase the renewable energy participation in electricity generation in Bolivia, Brazil and Chile (http://www.regsa-project.eu). At both projects, the electric engineering Department and the Programme on environmental management and economics at Universidad de Chile participate.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

1.6.5 Challenges and opportunities to progress In recent years, the Chilean scientific community on energy has strengthened its links with the EU, international banks, foreign universities, and private firms, as it is presented in the above sections. This has been crystallized by R&D research projects in this area, especially in renewable energies, along with creating centres, improving facilities, training programmes, reviewing and incorporating new subjects in universities curricula and scholarships. On the other hand, the country faces several challenges, such as the new energy and environmental legislation plus the willing to reach a 20% generation based on new renewable energies, a goal settled by the government in office which is far more ambitious than the one settled by the currently in force law on new renewable energies. Nowadays, the studies are progressing, not at the required speed though. For instance, only 3 large scale wind parks now exist in the country (Canela, Totoral and Monte Redondo), comprising 164 MW of installed capacity. Only 528 MW are installed in minihydro, albeit this last sector represents an important spotlight for promotion, given the countryâ&#x20AC;&#x2122;s characteristics to develop this technology. In terms of biomass, it is intended to exploit the huge amount of agriculture waste in order to increase the 294 MW available today. The main opportunities are based on geothermal and wind energy. Concerning the first one, the government will bid for 21 new sites for exploration, which means an estimated investment of USD 100 million. (http:// www.gobiernodechile.cl/informa/2010/09/01/ministro-raineri-anuncialicitacion21-nuevas-areas-de-geotermia.htm). It is also expected to make the most of the northern Chile great potential in terms of wind and solar energy, which is modeling by a joint project between the Ministry of Energy and the Geophysics Department at Universidad de Chile (http://condor.dgf.uchile.cl/ EnergiaRenovable/Chile). Also noteworthy are the spaces for R&D in energy efficiency (the non-energy), progress in regulation matters in terms of improve the laws, rules and opportunities for the technical development (crucial for the countryâ&#x20AC;&#x2122;s new renewable energies sustainability) as well as for the improvement of information availability supporting the decision-making in this area.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

Glossary CCHEN:

Comisión Chilena de Energía Nuclear / Chilean Nuclear Energy Commission

CCS:

Carbon Capture and Storage

CNE:

Comisión Nacional de Energía / National Energy Commission

CONICYT: Comisión Nacional de Investigación Científica y Tecnológica / National Commission for Scientific and Technological Research ENAP:

Empresa Nacional de Petróleo / National Petroleum Company

ERNC:

Energías renovables no convencionales / Non-conventional renewable energies (NCRE)

FEPCO:

Fondo de Estabilización del Precio de los Combustibles / Fuel Price Stabilisation Fund

FEPP:

Fondo de Estabilización de Precios del Petróleo/ Oil Price Stabilization Fund

GTZ:

Deutsche GesellschaftfürTechnischeZusammenarbeit (German Society for Technical Cooperation (http://www.gtz.de), which has become the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ).

LNG:

Liquefied Natural Gas

SEA:

Sistema de Evaluación Ambiental / Environmental Assessment Service

SEC:

Superintendencia de Electricidad y Combustibles / Superintendence of Electricity and Fuels

SIC:

Sistema interconectado central / Central Interconnected System

SING:

Sistema interconectado del norte grande / Norte Grande Interconnected System

References CNE, 2009. “Diseño de una estrategia energética para Chile”. Serie de Estudios Energéticos / 01.Comisión Nacional de Energía, 2009. CNE, 2009a. “Balance Nacional de Energía”.Comisión Nacional de Energía, 2009. CNE, 2008. “Política Energética: Nuevos Lineamientos. Transformando la crisis energética en una oportunidad”. Comisión Nacional de Energía, 2008.CNE, 2011. Página web de la Comisión Nacional de Energía. www.cne.cl Catamutun, 2011. http://www.catamutun.com/produc/carbon/pais.html CNE, 2011. Página web de la Comisión Nacional de Energía. www.cne.cl CNE, 2011a. “Estrategia de expansión óptima de las ERNC en los Sistemas Interconectados”. Preparado por el Centro de Energía FCFM de la Universidad de Chile, 2011. CNIC, 2007. “Estrategia Nacional de Innovación”. Consejo Nacional de Innovación para la Competitividad Conicyt, 2007. “El sector de la energía en Chile. Capacidades de investigación y áreas de desarrollo científico-tecnológico”. Conicyt, 2007.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report

European Commission, 2010. European Commission – Research and Innovation (http://ec.europa.eu/ research/energy/eu/research/fch/index_en.htm) IEA, 2007.“Renewables for Heating and Cooling”.International Energy Agency, 2007. IEA, 2009. “Chile: Revisión de la política energética, 2009”. International Energy Agency, 2009. IPCC, 2005. “IPCC Special Report on Carbon dioxide Capture and Storage”. Cambridge University Press, UK. pp 431. REN21, 2010. Renewables 2010 Global Status Report p. 15-16. REN21, 2008. Global Status Report 2007 REN21 Secretariat, 51 pages. WEC, 2004. “Energy Efficiency: a Worldwide Review”. World Energy Council, 2004.

Energy Sector in Chile: Research Areas and Capabilities. State of the Art Report