Vestas Sees Chile's Wind-Power Capacity Doubling Amid Boric's Reforms - Yahoo Finance

Vestas Sees Chile’s Wind-Power Capacity Doubling Amid Boric’s Reforms

(Bloomberg) -- Chilean President Gabriel Boric’s efforts to cut red tape for new investments would help the country more than double its wind-power capacity during the next decade, one of the world’s largest wind turbine makers estimates.

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Vestas Wind Systems A/S expects to see about 10 gigawatts of wind power in the nation by 2033, according to Andres Gismondi, the company’s head for the southern cone region of South America. That would be up sharply from roughly 4.8 GW of installed capacity at the end of 2023, data from BloombergNEF show.

The technology has been relatively slow to take off in the country, in part due to the obstacles of obtaining permits, Gismondi said. According to Vestas, it takes between three and five years in Chile to obtain all of the required approvals before construction — twice as long as other countries in the region. Even once the building phase starts, it takes about 50% longer due to Chile-specific constraints, including logistics and port capacity, he said.

“Obtaining permits has become increasingly complex in recent years,” Gismondi said in an interview.

The country’s government has taken note, announcing earlier this year two separate bills that would speed up processes and reform environmental approval systems. Many economists and analysts have said that Chile’s growing bureaucracy has become one of its chief obstacles to economic growth, going so far as to coin the phrase “permisología” to refer to the long process of obtaining permits.

Read more: Chile’s Boric Bets on Cutting Red Tape to Boost Economic Growth

Installed wind capacity in the country at the end of 2023 was about half the size of the solar sector, BNEF data show. Solar power has benefited as panel prices drop. Still, Gismondi said the renewable sources should be seen as complementary, not competing. He pointed to opportunities for wind projects in areas with strong winds during the night when solar plants can’t produce.

For wind power to really take off, the country also needs to build more transmission lines to better connect the cities to windy, faraway parts of the country, like Patagonia, he added. A freeze for power prices since 2019 after a bout of social unrest has also impeded the sector’s recent growth, as has strong opposition from local communities.

To counter that community pushback, Vestas is looking to install larger mills that may produce more power with less environmental impact than multiple small turbines, Gismondi said.

“The turbines that we are going to install in Chile in the future are going to twice as big — and much quieter,” he said.

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