The rapid rise of renewable energy in Latin America often highlights the significant influence of China. Chinese government, banks, and companies have played a pivotal role in propelling the continent’s energy transition. A staggering 90% of all installed wind and solar technologies in Latin America are produced by Chinese companies. Moreover, China’s increasing investments in Latin America’s critical minerals sector, such as lithium, nickel, cobalt, and rare earth elements, further reinforce its involvement in clean energy development. In this blog post, we will explore the case of Chile and how it reflects both China’s influence and Latin America’s homegrown innovations in renewable energy.

I. China’s Impact on Latin America’s Renewable Energy Landscape:

1. Technological Contribution: Chinese companies have significantly contributed to the installation of wind and solar technologies across Latin America. Their involvement has played a crucial role in driving the continent’s energy transition forward.
2. Critical Minerals Sector: China’s growing presence in Latin America’s critical minerals sector is noteworthy. The acquisition of shares in Chile’s major lithium producers, such as Sociedad Química y Minera, and investments in lithium projects in Argentina exemplify China’s interest in securing crucial resources for electric vehicles, wind turbines, and defense technologies.

II. Chile’s Renewable Energy Transition:

1. Achieving Renewable Energy Goals: Chile has made substantial progress in embracing renewable energy, surpassing its 2025 renewable energy goal. New geothermal, solar, and wind power projects, some with Chinese support, have elevated Chile’s clean energy generation to power approximately one-third of the country.
2. The Lithium Connection: Chile’s Atacama Desert houses the world’s largest lithium reserves, a vital component for lithium-ion batteries used in electric vehicles and energy storage systems. The Chilean government is determined to retain control over its lithium reserves and has introduced a national strategy to ensure partial ownership in future lithium developments.

III. Homegrown Innovation in Latin America:

1. Fostering Energy Innovation: Alongside international investments, Latin American countries are nurturing their own innovation cultures in renewable energy. From high-tech materials to frugal innovation, these dynamic and often grassroots initiatives contribute to the region’s clean energy landscape.
2. Chile’s Start-Up Ecosystem: Chile hosts StartUp Chile, one of Latin America’s largest public incubators and seed accelerators. This initiative has supported local startups in various sectors, including food, energy, and biotech, offering important innovations that prioritize sustainability with lower costs.
3. Examples of Frugal Innovation: Local companies like Reborn Electric Motors, which converts old diesel bus fleets into fully electric buses at a lower cost than imported alternatives, exemplify frugal innovation in Chile. Industrias Quantum Motors’ development of an affordable, small electric vehicle designed for widespread use in Latin America further showcases the region’s commitment to sustainable and cost-effective solutions.

IV. Chile’s Green Hydrogen Ambitions: Chile is venturing into the realm of green hydrogen production using its abundant solar and wind resources. The government aims to leverage these renewable energy sources to produce green hydrogen for export, potentially rivaling the country’s mining industry. Although challenges exist, including environmental concerns and project administration, Chile sees green hydrogen as a promising opportunity for a sustainable future.

China’s role in Latin America’s renewable energy boom cannot be underestimated, with Chinese companies and investments driving significant progress across the continent. Chile, in particular, exemplifies this trend as it embraces renewable energy and actively safeguards its valuable lithium reserves. However, Latin America is not solely reliant on external influences. The region is fostering its own energy innovation culture, exemplified by homegrown startups and frugal innovations that prioritize sustainability and cost-effectiveness. As Chile looks ahead to green hydrogen production and Latin America continues to increase its renewable energy capacity, collaboration between international players and local innovators will be key to shaping a sustainable energy future for the region.

Note: The views expressed in this blog post are based on the article originally published by The Conversation under a Creative Commons license.

Reference: https://fortune.com/2023/07/08/china-secretly-fueling-latin-america-renewable-energy-boom-chile/