Ensuring that increased demand does not raise local prices and does not lead to higher environmental costs are concerns in any electricity and gas exchange.

Energy to Argentina: the world upside down?

The Minister of Energy, Máximo Pacheco, informed that the country will export 5.5 million cubic meters of natural gas per day to Argentina during the winter. It also announced that we would also export electricity with a capacity of 200 MW via Mejillones-Salta. How is this possible? Isn’t Chile a country without fossil energy resources? Weren’t we suffering from high prices due to supply restrictions?

Before explaining the logic behind this, it is important to point out that energy exchanges between countries can have important benefits and synergies for those involved, allowing them to optimize production costs, improve security of supply, place energy surpluses and take advantage of complementary resources of the interconnected countries. One region that has been convinced of the above is Europe, today with a large interconnected electricity system covering 34 countries, supplying more than 530 million consumers, with a net generation capacity of over one million MW. But of course, energy exchanges can also end very badly, a good example was our previous gas exchange with Argentina. To understand the logic behind the new actions, it is necessary to identify two possible dimensions of energy exports to Argentina, with different conditions and restrictions.

A first dimension is to serve as a natural gas supply interface. Chile receives liquefied natural gas by sea from abroad. It has two underutilized liquefaction terminals in Mejillones and Quintero, and the Nor Andino gas pipelines in the Second Region and the Andes in the Metropolitan Region, which were built to supply Chile and are not in use. The opportunity then arises to be a channel to supply Argentina with serious gas supply problems, without affecting Chile’s supply. It is true that this may be transitory, since Argentina must rebuild its energy infrastructure, punished by erroneous energy policies. It must regain its leadership, counting on large untapped resources, including its shale gas reserves, among the largest in the world. But this may take decades.

The second dimension is the export of surplus electricity. Norway and Sweden export hydroelectric power to the rest of Europe while France exports nuclear power. North Africa is projected to export solar power to Europe, as we expect the Norte Grande to do to the rest of South America.

Since there is currently surplus thermoelectric capacity in the north, the possibility of selling it to Argentina is attractive, but the restrictions are different from the previous case. Ensuring that increased demand does not raise local prices and that higher environmental costs are not assumed are concerns of any exchange. The same concerns arise in Peru, with which a Tacna-Arica interconnection has also been announced. It is a country with great potential for electricity generation via natural gas and is taking advantage of its great hydroelectric potential without any problems.

To dream of the Andean Electrical Interconnection System with Peru, Colombia, Ecuador and even Bolivia is to dream of an integrated Europe. It remains to know the protocols of agreement under development, the purchase and sale contracts, and how we protect ourselves from repeating the mistakes of the past.

*The author is a civil engineer.