Oil Report

Renewable energy law signed into effect in Chile

SANTIAGO, March 20 (Reuters) - Chilean President Michelle Bachelet signed a new energy law into effect on Thursday that requires electric utilities to invest in and supply nonconventional energy sources (NCES).

The vanguard law is an attempt by the energy-poor country to diversify supply as it tries to feed booming industry, particularly its copper mining sector.

The law mandates that NCES account for at least 10 percent of the energy supplied by Chile’s electric utilities by 2024, and was approved by Congress unanimously earlier this month.

“The main idea is to establish conditions to attract investment to projects for non-renewable energy by accelerating the development of the market, eliminating entry barriers making these new sources compatible with the country’s electricity market,” Bachelet said on signing the law.

Nonconventional energy sources include wind, solar, geothermal, hydraulic and other forms of energy that have low environmental impact and are still not widely used in the local market.

Chile, which imports nearly all of the fuel it consumes, has been grappling with a serious energy shortage amid cuts in natural gas from sole supplier Argentina and lower hydroelectric reservoir levels caused by scant rainfall. (Reporting by Monica Vargas; Editing by Marguerita Choy)