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Chile sees increasing demand for new energy sources

Copper Mine Radomiro Tomic, Region II at Antofagasta, Chile (source: flickr/ matt.hintsa, creative commons)
Alexander Richter 11 Feb 2011

With an increasing shortage and demand in energy supply after droughts keep hydroelectric power input at low levels, Chile's mining sector is increasingly looking for renewable energy sources including geothermal to fuel demand.

A report from Reuters looks into the effects of recent droughts, resulting energy price spikes, as well as record copper prices which makes mining companies increasingly looking into exploring new energy sources.

The article talks about that the the recent drought has a large impact on hydroelectric power production, which results in higher electricity costs. Increasing prices and shortage of electricity supply are making now renewable energy sources in the country, including geothermal more attractive and this particularly to mining firms.

“Renewable energies require a greater investment but they have low production costs,” said Mabel Weber, an energy analyst with Banchile Investments. “The more prices rise, the more viable alternative energies look.”

A lot of mining companies are now utilizing expensive oil and gas to run generators to fuel electricity demand, also resulting in near threefold higher electricity prices over the last 5 years. The article talks about that Chile’s mining industry consumes about a third of the country’s electricity and is looking at stabilizing energy costs to the companies in the sector.

Some mining firms invest in wind farms, the third largest firm Collahuasi is exploring geothermal energy and there might be even more exploring a geothermal option.

Source: Reuters