Three startups that are changing the energy sector in Chile
Updated: Feb 17
A few years ago, I wrote a piece on the potential of renewable energy in Latin America. Since then much has happened, but one thing that remains unchanged. The potential of renewable energy sources in the region.
Chile has undergone many challenges starting in 2019 with nationwide demonstrations and more recently rewriting its constitution. All this while dealing with a global pandemic. However, according to the World Investment Report 2020 FDI increased by 63% from USD 7 billion to USD 11 billion in 2019. Chile is regarded as one of the strongest investment destinations in Latin America, due to its natural resources, governmental support and high quality of infrastructure.
With Chile’s seemingly never ending coastline, off shore wind farms make an excellent energy source. The Atacama Desert in the north, which is one of the hottest places on earth allows for an ideal location to install solar panels. The volcanic landscape also located in the northern parts of the country, is almost handmade for producing geothermal energy. Despite this, their main energy source still is hydro power.
But Chile is looking to diversify their power sources, similar to Uruguay. Today, the country is too affected by droughts and floods. As a result, solar, wind and especially geothermal has become increasingly more popular in the last 7 years.
Apart from the natural resources Chile another comparative advantage is the willingness from the government to make a 180 transition in the energy sector. The government recently launched its decarbonization program, which aims to completely replace coal with other sources of energy by 2040, when 100 percent of the country’s energy will come from NCRE. This process may imply a greater development of hydroelectric plants and energy storage solutions.
In 2017, Argentina suspended natural gas shipments to Chile, because they could not support their own domestic needs. This was a clear wake up call, saying that Chile needs to become energy self-sufficient. One of the actions Chile’s government has taken is to invest in green infrastructure to lower the price of renewable energy in the long term and make it attractive for foreign investors to invest in Chile.
Further, the government recently launched its decarbonization program. which aims to completely replace coal with other sources of energy by 2040, when 100 percent of the country’s energy will come from “clean energy”. That implies that there will be a support for hydroelectric plants and energy storage solutions.
There is always some risk involved when making a transition of this magnitude, but the expectation is for Chile’s energy supply to keep moving in a positive direction is still unprecedented. Currently, 20 % of the country’s energy supply is represented from solar and wind power, which is a number that will continue to increase.
There are many intriguing Chilean startups with loads of potential and innovative ideas to keep an eye on. I have selected three of them that I found the most interesting and worth given some extra attention.
Sunai is a power generating company that is taking the fight against the energy giants. Their mission is to accelerate the energy transition in Chile, and are focusing on making solid energy systems through data intelligence. This solar startup recently won Platzi’s DemoDay competition which is an initiative to support and launch startups.
With their new approach combining AI with solar energy, they are able to predict the energy production and connect multiple solar plants in an accessible and easy way. This provides a unique way of rethinking the solar energy sector and opens up for new opportunities in the future.
Endurance Electric is a social enterprise that is trying to revolutionize the energy sector while tackling poverty in Chile. They are trying to support thousands of vulnerable Chilean families who suffer from poor access, poor quality and inequality in energy sector.
The business model is to offer a “Paygo model”, similar to mobile phone companies where you don’t need a financial evaluation and the family is paying month to month. This created a more simple and accessible energy source to families that have never had electricity before.
Microsolar is a company that develops an ultra-low-cost solar inverters.
They have been able to develop a technology that allows them to generate up to 25% more power and cost 70% less. They are a pioneer in the industry and entered the Peruvian market in 2013.
Their projects range from personal usage to massive project involving installation of entire facilities. In 2018 Microsolar was in charger off the installation of climate and extraction of the great new “Polideportivo de Independencia” sport complex.
There are many uncertainties moving forward both political, social and economic but one thing that is for sure is that the sun will shine and it belongs to everyone. So why not take advantage of it and all its potential?