Costly Chile power may jolt renewable energy

OVALLE, Chile,  (Reuters) – A long drought has dried  up hydroelectric power production in Chile, sending electricity  costs soaring and making renewable power sources like wind,  solar and geothermal more attractive, particularly to  energy-hungry miners reaping a copper windfall.

“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.”

Scarce rains from the La Nina weather pattern have slashed  hydroelectric output in Chile, the world’s top copper producer.  Generators must rely on plants powered by costly imported oil  and gas, compounding inflation risks in the booming economy.

Energy prices have nearly tripled in five years, leading  companies to covet the cost stability offered by wind, solar  and geothermal power.

Chile’s mining sector in particular, which consumes a third  of the country’s power, has the means and motive to stabilize  its energy costs by investing in new technology now that copper  prices are at record highs.

State miner Codelco has committed $700 million to a 250 MW  wind farm that may be the largest in Latin America when  finished, and world No. 3 copper mine Collahuasi is exploring  geothermal energy to tap Chile’s immense volcanic activity.