Non-conventional renewable energy (NCRE) faces institutional, financial and regulatory obstacles in Chile and Peru, according to a presentation by Solarpack Chile director Jon Segovia.

Institutional hurdles in Chile include a three to four year wait to obtain public land, a slow permitting and decision making process, and excessive sector concentration.

Peru’s institutional obstacles also include delays in securing land, along with gas subsidies that stymie a NCRE free market (despite auctions) and occasional disputes between the central and regional governments.

Chile’s financial barriers are characterized by a local conservative banking system that lacks sector experts and although there is support from state development agency Corfo, it is insufficient and rigid.

Meanwhile, Peru lacks Corfo-type financing and banks have low capacity to tackle project finance alone.

On the regulatory front in Chile, Segovia points to difficulty in applying the NCRE law, and complex and obsolete legislation for the entrance of these energy sources; connection permits take 2.5 years to obtain. In Peru, connection permits also take time to secure and the environmental impact assessment law was not drafted with NCRE in mind.

Nevertheless, the company executive highlights Chile’s clear rules, high energy price, increasing demand, rejection of conventional energy, and the NCRE law which requires generators to produce 10% of power from NCRE by 2024. Peru’s pluses include a government pledge to advance NCRE, auctions and growing demand.

In Latin America, Solarpack is building the 1MW Calama Solar 3 project for state copper corporation Codelco under a PPA that is due to begin operation year-end; and 20MW projects Panamericana Solar 20TS and Tacna Solar 20TS in Peru under PPAs with the state. The latter two are scheduled to come online by end-2012.

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