Chile Essay

3.1. Why Chile?

The initial thought was that emerging markets are the ones that attract most investments nowadays. Especially the Latin American countries have received lot of investment capital regarding energy. Moreover, E.On is already present in the Brazilian market; a fact that illustrates the possible elimination of risk in terms of the similarity of the countries. Although Chile’s market size is smaller than those of their neighbors, it can be still a great target that involves great expectations. An analysis of the factors that can enable or challenge E.On is given, followed by the final overview of the potential solar energy investment.

3.2. Introducing Chile

Chile is considered to be the most developed country in Latin America based on the World

Competition

As far as the energy market is concerned, in Chile the electrical industry is considered a private sector. Both local and international companies are present, 31 generation companies, 5 transmission and 36 distribution companies are active in the Chilean electricity market.

3.4. Weather conditions

The prevailing weather conditions in Chile are more than suitable for a renewable energy investment. The climate varies from the world’s driest desert in the north through a Mediterranean climate in the center to a snow regions in the south. Moreover, Chile has the highest solar incidence in the world. There is plenty of potential for renewables, from solar energy in the Atacama Desert to geothermal wells in the volcanic Andes and tidal generation along the Pacific coastline. (The Economist, “Energy in Chile, Dancing in the dark”, 1/10/2011). “The high horizontal solar radiation in areas in and around the Atacama Desert make solar technologies more productive in these regions, translating into lower costs per unit of electricity generated.”, according to Christian Roselund and his article “Chile's solar market is leading the way in South America” on “The guardian”.

3.5. Political