SANTIAGO- As Chile strives toward the laudable goal of becoming South America’s first developed country, the fragility of its electric transmission system and, more broadly, its energy sector has become an Achilles heel said Minister of Energy Jorge Bunster.

“We need to enhance the resources the country has; hydroelectricity and also nonconventional renewable energy sources, but without casting aside conventional energy” Bunster told almost 100 representatives from across Chile and the hemisphere at the Institute of the Americas November 12 Chile Energy Roundtable in Santiago.

In a keynote address and in responses to questions during a roundtable discussion, Minister Bunster acknowledged that energy costs will remain high for the next four to five years as the nation grapples with project delays, uncertainty over interconnecting the nation’s two electric grids, as well as opposition to large-scale energy projects from an increasingly sophisticated public.

“Today we have a fragile system in terms of transmission” Minister Bunster said. “We have an Achilles heel that must be resolved.” He added that Chile’s “energy future must be diversified.” Chile imports roughly 60% of its energy needs.

Minister Secretary General of the Presidency and former IOA Fellow, Cristián Larroulet, speaks at lunch during the Institute of the Americas Chile Energy Roundtable.

The Piñera government, with the Carretera Eléctrica Pública and Ley de Concesiones para Sistemas de Transmisión initiatives before Congress is working to address the deficiencies and weaknesses of the nation’s transmission and distribution system, but a short-term solution is unlikely noted the minister.

Given the nation’s economic development trends and development goals, many speakers echoed Minister Bunster’s affirmation of the need for a diversified energy matrix and further support in addressing the issue of interconnection of the country’s two electric grids.

But serious concerns over recent cancellations, delays and opposition to major energy projects and how the government has managed the sector permeated the discussions.

Indeed, participants from across a diverse roster of major energy players in Chile called for increased government attention to the project approval process.  Uncertainty for energy project development and execution will continue to impact the country’s near-term energy outlook they contended.

The need to understand and learn from the lessons of the past several years in Chile’s energy sector was paramount argued several speakers. [inset side=left] “The investment effort underway will provide the energy that Chile needs.” Cristián Larroulet[/inset] Efforts undertaken by the Ministry of Economy to address economic development and investment issues remain important to identify the existence of problems that are in the interests of the government and private sector to solve.

Participants implored an energy matrix that maximizes Chile’s abundant hydro resources as well as further assessment of the global natural gas price and supply upside, particularly given decisions made over the last few years to develop liquefied natural gas infrastructure and recover the use of natural gas as a fuel source.

How to deal with public outreach and communication and the image of the energy industry proved topics of concern and ones that drew great introspection but few immediate answers.

A more positive note was sounded in a lunchtime keynote address by former Institute of the Americas Fellow and current Minister Secretary General of the Presidency, Cristián Larroulet, who stressed that “the investment effort underway will provide the energy that Chile needs.”