Chile Plans to Award $1 Billion Power Grid Contracts This Year

Chile plans to grant about $1 billion of electricity-grid contracts this year as high power prices threaten to curb investments in the world’s biggest copper-producing country.

About $200 million worth of contracts have been awarded already and authorities are preparing an $800 million contract to connect the country’s two main grids, Energy Minister Jorge Bunster said in an interview in Santiago today. About $920 million of contracts were awarded in 2012.

“This agreement will speed up improvements in the grid that makes investments in power generation viable,” he said.

A bill that regulates transmission investments will permit more companies, including suppliers of renewable energy, to connect to the country’s power network. High energy prices pose the biggest threat to growth in the country, Economy Minister Pablo Longueira said earlier today.

Lawmakers also agreed on aspects of a bill that regulates investments in geothermal energy, as well as extending a deadline that requires 20 percent of power to be sourced from renewable energy by 2020, until 2025, Bunster said. The target was lowered to a range of 15 percent to 20 percent. Renewable energy companies have obtained approval for projects with a combined capacity of more than 3,000 megawatts, he said.

Before it's here, it's on the Bloomberg Terminal.