Chile’s coal phase-out update and next steps

Carolina Gómez Environment and Climate Change

Division Ministry of Energy

June, 2020

-

20.000

40.000

60.000

80.000

1971 1980 1990 2000 2010 2019

GWh

Petróleo

Gas Natural

Carbón

Hidro

Biomasa

Solar

Eólica

Geotérmica

Natural gas imports begins

Natural gas supply cuts

Renewables growth

Droughts

40% of electricty generation is coal-based

Today the energy sector is the largest CO2 emitter

Source: Own elaboration based on data from the National GHG Inventory 2016

Carbon neutrality 2050

130

65

0

40

80

120

2015 2020 2030 2040 2050

MM tCO2e

Green Hydrogen (21%)

Energy Efficiency (7%)

Sustainable Industry (25%)

Electromobility (17%)

Forest Capture

Sustainable Building (17%)

Reference Stage

Carbon Neutrality Stage

Phase out coal(13%)

Forest Capture Maintaince

5

50% (65 MMtCO2e)

50% (65 MMtCO2e)

Phase- out coal is one of the principal measures to reach Carbon Neutrality

Carbon Neutrality

Voluntary Agreement for coal power plants withdrawal

1. Not to build new coal power plants unless they have CCS or similar technology

2. The Ministry of Energy will lead a working group with main stakeholders to establish criteria to provide a smooth transition to a low carbon economy in social, economic, environmental, health, employment and technical terms

3. To define a schedule to phase out or reconvert existing coal power plants

Voluntary Agreement was signed in January 2018 and ratified in May 2018, in the Energy Road Map 2018-2022

Coal phase out Roundatable 2018-2019

Kick off Meeting

June, 11

Starting Work

June, 26

Health and air quality

July, 24

International experience

August, 20

Electrical system impact

September, 25

Environmental issues

October, 23

TecnologicalAlternatives

November, 20

Economical and social impacts

December, 4

January 2019: Final Learnings Presentation

June 2019: Phase out of coal power plants schedule

Coal phase out Roundatable Stakeholders

Institutions

Private Engie

Private ENEL

Private AES Gener

Private Colbún

Institutions

NGO WWF Chile

NGO Casa de la Paz

NGO Chile Sustentable

Civil Society Civil Society Council of Min. of Energy

Institutions

University Pontificia Universidad Católica

University Universidad Adolfo Ibáñez

International Inst. GIZ – German Cooperation

Independent Inst. National Electrical Coordinator

Institutions

Public Ministry of Energy

Public National Energy Comission

Public Ministry of Environment

Public Municipality of Tocopilla

Institutions

Union Association of Electricity Generators

Union Coal Power Plants Syndicate

Clients Mining Council

Clients Unregulated Energy Consumers Association

Clients Consumers and users organization (ODECU)

3 plants have been retired since June 2019, having today 25 plants with 5197 MW.

At the end of this year, the central Ventanas 1 (Puchuncaví) and Bocamina 1 (Coronel) will be retired.

9

By 2024, 11 plants will be closed, which represent 31% of the coal capacity (1,731 MW)

28 Coal Units, 5 GW of installed capacity

Schedule of the first stage of coal-phase out Working groups every five years for schedule review

11

People-centered energy transition

Employment Associated with Coal Power Plants

• Direct employment: 4.391 people (contracts or subcontracts)

• Indirect employment: 9.505 people (value chain and its productive linkages)

• 0.17% of total employment in Chile (direct and indirect)

Iquique Mejillones Tocopilla Huasco Puchuncaví Coronel

Direct Employment

150 1,533 589 533 808 777

% of total in commune

0.14% 3.8% 4.4% 6.8% 1.6% 0.3%

Source: Study on Economic and labor impact of the withdrawal and / or conversion of coal units in Chile, IDB.

13

June 23, 2020 LAUNCH OF THE ELABORATION PROCESS OF

JUST TRANSITION STRATEGY IN ENERGY

J u s t T r a n s i t i o n M o t i v a t i o n

To reach an energy transition with

OPPORTUNITIES to the community.

to work in a COLLABORATIVE way with

all public institutions involved

To create effective participation with

community and organizations.

L o c a l

O p e r a t i o n a l

L e v e l

C e n t r a l

T t r a t e g i c

L e v e l

M a n a g e m e n t

L e v e l

L O C A L C O M M I T T E E

Local representatives, public services and companies at the community level.

Public services, companies, communities, unions, international agencies (GIZ, CEPAL, IDB).

E X E C U T I V E C O M M I T T E E

Executive Secretary (Ministry of Energy)

Other related Ministries Ministry of Energy Ministry of Labour Ministry of the Environment

I N T E R - M I N I S T E R I A L C O M M I T T E E

GOVERNANCE

Analysis of existing

information and

develop specific

studies

Diagnosis

Develop a structure

proposal and a

working plan with

definitions of

Objective, Vision,

Pillars

Strategy

Participatory

processes and social

dialogue (online

workshops)

Participation

The First proposal

for a Just Transition

Strategy

Proposal

Public Consultation

The Working Plan J U S T T R A N S I T I O N S T R A T E G Y I N E N E R G Y

Just Transition

Strategy

PUBLISHED

J U N E 2 0 2 0 J U L Y 2 0 2 0 D E C E M B E R 2 0 2 0

F I R S T S E M E S T E R

O F 2 0 2 1

17

T O C O P I L L A M E J I L L O N E S H U A S C O P U C H U N C A V Í C O R O N E L T A R A P A C Á

P H A S E O U T C O A L P L A N

Chile’s coal phase-out update and next steps

Carolina Gómez Environment and Climate Change

Division Ministry of Energy

June, 2020