Emergency Response Assessment of CHILE

On no one quality, on no one process, on no one

country, on no one route, and on no one field must
we be dependent
W. Churchill
Cuauhtmoc Lpez-Bassols
Energy Analyst, IEA

OECD/IEA 2012

Chiles Energy Mix

Total primary energy supply
8%
26%

40%

54%

Chiles TPES has grown 4.2% per year since 1990 (to

2009), in line with its economic development.

Oil 54%, Combustible renewables/waste 17%, Coal 13%,
Gas 8% (2009).
Gas: 26% TPES in 2004 before flows were restricted

OECD/IEA 2012

Oil
Domestic production down from 14% in 1990 (15 kb/d) to
2% (3.6 kb/d) in 2010
Demand 333 kb/d (2010)
Transport 46%/ Power sector 17% (unusual for OECD =5%)
Oil products for power generation increased from an average
share of 2.4% in 2000-2006 to 28% in 2007-2009.
kb/d
180

Imports of
Gasoline/Diesel/Kero:
100% from OECD
countries

2.4% Gasoil for

power generation

160
140
120

29.5% Gasoil
for power
generation

100
80

60

Diesel (high spec): US

37%, Rep. of Korea 35%,
Japan 28%.
3

40
20
-

2000

2001

2002

2003

Fuel Oil
Kerosene for domestic use
Gasoline

2004

2005

2006

2007

2008

2009

Gas/diesel oil
Jetfuel Kerosene
LPG
OECD/IEA 2012

Oil Infrastructure
Oil Pipelines
Sonacol owns 6 pipelines and three terminals in

the central region.

Refining capacity
ENAP only refiner in Chile
Three refineries : 240kb/d or 70% prod. demand

Storage capacity
Total capacity: 22mb
Crude: 1/3 Products: 2/3
Average current utilisation rate 37%
Stock level: 30.8 days of net imports (IEA

methodology)
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OECD/IEA 2012

Key Oil Emergency Policy Issues

No NESO, but the National Emergency Office (ONEMI) is

responsible for coordinating efforts during emergencies

A 25 days stock-holding obligation on industry.
No regulation to determine how reserves are quantified,
administered or managed in emergencies
Study on 90-day stockholding estimates cost appears
excessively high
No clearly established demand restriction policy for liquid
fuels.
No/limited fuel-switching and oil surge capabilities.
Strict motor fuel specifications can pose a short-term
supply risk due to lack of available fuel in international
markets which meets standards
OECD/IEA 2012

Natural Gas
Natural Gas Consumption by Sector
mcm
9,000
8,000
7,000

Petrochemical feedstocks

6,000

Transformation

5,000

Other

4,000

Commercial and Residential

3,000

Industry

2,000

Transport

1,000

Indigenous production

1980
1981
1982
1983
1984
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009

Peak demand of 8.3 bcm in 2004.

Gas consumption plummeted to 2.2 bcm in 2008 as a
result of curtailment of piped gas from Argentina.
LNG demand has grown in 2009 to 2.7 bcm
41% for power generation (2010)
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OECD/IEA 2012

Gas Infrastructure
LNG terminals
Mejillones (2 bcm/year)
Theoretical send out rate 5.5 mcm/d
LNG used mainly for power generation

Quintero (3.9 bcm/year)

Maximum send out rate 10 mcm/d

Pipelines
Built in 1990s linking Chile with Argentina, now

mostly disused.

Storage
No stand-alone gas storage sites.
Storage capacity exists at LNG terminals: 334,000

cum and 160,000 cum.

No obligation on LNG terminal operators to hold a
minimum amount of stocks.
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OECD/IEA 2012

Natural Gas Emergency Policy

No public or mandatory industry gas stocks
No specific response system for handling gas

emergencies.
MoE is developing a regulation establishing how
industry must respond to situations in which gas
supply is at risk.

OECD/IEA 2012

Electricity
Electricity demand

SING
SIC

Rapid electricity growth from 40TWh in 2000 to 60TWh in 2010.

Demand growth expected at 6% pa for next 10 years.
Growth forecast to occur in the SIC

Industrial users account for nearly 70% of total electricity demand

Hydro power dominates the electricity mix; representing 46% of SIC
While gas (57%) dominate the generation mix in SING
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OECD/IEA 2012

Electricity Infrastructure
Chiles power system : 4 regional power

systems.
The SIC: populous central region including
the main consumption centres: mainly
hydro
The SING: north; serves the major mining
and processing operations: mainly thermal
The Aysn System in the south and the
Magallanes System in the far south; small
and isolated (generating capacity of around
150 MW).

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OECD/IEA 2012

Chile Commended for - Oil

Chiles wide diversity of import sources.
MoE for its efforts in developing a market-

monitoring system for supply and demand.

MoE for commissioning a study on the
possibility of meeting the IEAs 90-day
stockholding obligation (although costs seem
excessively high).
MoE for a study into demand restraint
measures.

OECD/IEA 2012

Some Key Recommendations Oil

Supply, Demand and Market Issues/Emergency
Encourage upstream investments as domestic

12

production provides a good buffer for energy

security. (rec 1).
Reconsider the perceived value of reducing price
volatility-SIPCO (rec 3).
Introduce Third Party Access to storage facilities;
could help to optimise usage of existing storage
facilities, and discourage uncompetitive
behaviour (rec.4).
Develop a comprehensive emergency plan and
organisation for the energy sector, to improve
emergency preparedness. (rec.7)

OECD/IEA 2012

Some Key Recommendations Oil (2)

Supply Infrastructure- Emergency Policy
Continue to improve data collection, notably

requiring power plants and mining companies to

report their tertiary stock levels. (rec. 15)
Impose obligation on dual-fired electricity
generating plants to hold minimum amount of
diesel stocks. (rec. 16)
Clarify process and conditions for authorising
and monitoring waivers for oil product
specifications in the event of an oil supply
disruption. (rec 19).
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OECD/IEA 2012

Chile Commended for - Gas

The development of two LNG terminals within a

very short period of time, which provides a

significant source of energy security (flexibility
and storage).

OECD/IEA 2012

Key Recommendations Gas

Supply, Demand and Market Issues -Infrastructure
Encourage upstream investments, including further

analysis of unconventional gas prospects. (rec 20)

Increasing LPG import capabilities beyond the two
existing terminals. (rec. 24 )
Investigate storage capacity potential of under-utilised
trans-Andean pipelines. (rec. 26)
Consider imposing a minimum stockholding obligation
on the Quintero LNG terminal, based on a worst-case
scenario for the weather that would affect the Bay of
Quintero. (rec. 27)

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OECD/IEA 2012

Key Recommendations Gas (2)

Supply Infrastructure-Emergency Policy
Consider building stocks of LPG throughout the

supply chain in order to better cope with supply

emergencies. (rec. 28)
Develop a comprehensive emergency policy
framework for natural gas disruptions, including
priority users, demand restraint measures,
interruptible contracts, forward planning and
TSO-like responsibilities. (rec. 31)

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OECD/IEA 2012

Chile Commended for - Electricity

Efforts to identify and address the lessons

learned from recent emergency events.

Steps taken to diversify its electricity generation
mix, especially through the deployment of new
non-conventional renewable energy.

OECD/IEA 2012

Key Recommendations Electricity

General Issues
Review and clarify regulatory and operational

responsibilities to improve the timeliness and

effectiveness of decision-making in response to
emergency events.(rec.32)
Strengthen the independence and objectivity of
system operation, notably by reforming
governance and funding arrangements to
remove conflicts of interest. (rec.33)

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OECD/IEA 2012

Key Recommendations Electricity (2)

System Security and Adequacy
Review the application of current operational

and technical standards, like the N-1 standard,

to ensure that they provide a strong,
comprehensive and enforceable foundation for
delivering power system security. (rec. 35)
Assess the effectiveness of the Rationing Decree
Mechanism, with a view to improving its costeffectiveness, including the introduction of
market-based demand response elements. (rec.
40)
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OECD/IEA 2012

Key Recommendations Electricity (3)

System Security and Adequacy
Streamline investment approvals, to minimise

processing delays, improve certainty and bring forward

investments to ensure electricity security. (rec.43)
Examine options for an interconnector between the SIC
and SING to improve power system reliability and
resilience. (rec. 46)
Examine an obligation for adequate supplies of back-up
fuel to maintain electricity security during an
emergency. (rec. 47)

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 OECD/IEA 2012