On Aug. 6, an appeals court in Chile suspended another electricity megaproject, marking the latest in a series of power-generation setbacks for the increasingly energy-starved nation. That same week, Rene Muga, general manager of the Chilean Electric Power Association, told an energy conference that power consumption in Chile will double by 2025, further calling into question how the country will respond to this increasingly critical need.
Chile has struggled to meet rising electricity demand in the face of growing environmental concerns, and the suspension of the 740-megawatt, $1.4 billion Punta Alcalde thermoelectric plant raises questions about the long-term economic implications of this trend. The energy-intensive mining sector is particularly worried, but its fears should not be considered in isolation. A failure to significantly increase Chile’s generation capacity has already become a hurdle to mining expansion and, in turn, national economic growth.
Chile is not alone; neighboring Peru is in a similarly precarious position as it seeks to promote sustainable growth, much of which is underpinned by the mining sector. Mining will also be the key driver of electricity demand in Peru in coming years.