Smart Grids would be a smart move for Chile
Smart Grids would make a lot of sense in Chile, an energy-poor country facing a power crisis. Hydroelectric plants have been producing 60% of Chile’s electricity, while the remaining 40% has come from natural gas imported from Argentina. Due to a reduced supply of Argentine gas and lower hydroelectric reservoir levels caused by scant rainfall, Chile has had to look for alternative sources of power. In March 2008, a law was passed requiring electricity companies to invest in nonconventional energy sources (NCES), including wind, solar, geothermal, and hydraulic power. By 2010, at least 5% of all the electricity supplied by any one of Chile’s utilities must come from NCES, gradually increasing to 10% by 2024. The law is an attempt by the country to diversify its supplies as it tries to feed a booming industry, particularly in the copper mining sector.
Smart Grids are intelligent IP overlays of the electricity grid by means of which utilities can better manage their network, limit electricity loss, reduce carbon emissions, prevent outages, and provide customers with in-house information and tools (smart meters) to better manage their own energy use. Broadband Powerline (BPL), fibre-optic, fixed-wireless, and mobile can all be used to link a smart grid backbone to a customer’s premises, and such a network also offers opportunities to sell excess capacity (on a wholesale level) to other telcos and ISPs.
The idea of broadband in conjunction with their electricity networks is not an entirely new idea for Chilean utilities. In the 1990s, when BPL solutions looked promising, three Chilean electricity companies (Chilectra, CGE, and EMEL) undertook BPL tests. In 2001, Subtel granted Compañía Americana de Multiservicios Limitada, a subsidiary of the Enersis group (a Chilean utilities conglomerate with Spanish ownership interest), authorization to implement a pilot project based on BPL technology, exclusively for exhibition purposes and not to be implemented commercially. But tests globally came to a standstill due to problems in relation to international standards and radio interference. In 2004, technological developments spurred renewed interest in BPL, but further delays in standardisation, the relatively high cost of hardware, added to the fact that moving further into the broadband access market was outside their core business, put a virtual stop to new deployments over 2006-2007.
In March 2005, Chilean triple player VTR (provider of converged telephony, broadband, and cable TV) was the first company in Latin America to launch an In-House BPL service commercially for its residential clients. In-House BPL, also known as Power Line Indoors or Internal Telecoms (PLIC), is a home networking technology that uses devices developed by HomePlug Powerline Alliance. VTR’s system converted a dwelling’s electrical wiring into an Internet access network, allowing users to connect a WiFi transmitter or cable port to any power point in their homes. The service was however expensive and short-lived, and had disappeared from the company’s offerings by 2007.
Chile’s main electricity distribution firm Chilectra has toyed with BPL technology on a broader scale, across its entire grid. Lacking a telecom service licence, the company aimed to offer the system as a backhaul alternative for licensed carriers, but commercialisation of the system is on hold despite extensive testing.
A ‘Smart Grids Latin America’ conference, to be held in Santiago de Chile, is scheduled for November 2008. The purpose of the conference is to sensitise Latin American utilities, regulators, consultants, and vendors to the huge changes taking place globally in utilities’ power delivery and metering markets, and to understand the future impact these changes will have both nationally and within the region. It is to be hoped that the conference will spur Chilean utilities to invest in Smart Grid infrastructure.
See also: Chile - Convergence, Broadband and Internet market
Lucia Bibolini - Senior Research Analyst - BuddeComm
