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Education is top of the government’s agenda at the moment but Chilean students will have a dim future without reliable energy supplies. In fact, energy is one of the most important public policy issues Chile needs to address if it is to continue its economic growth and join the club of developed countries by the end of this decade.

Cleaner, lower cost energy supplies are essential for maintaining the country’s competitiveness but this will require greater diversification of the country’s energy mix. AmCham understands the importance of energy for Chile’s growth and led an initiative, which was announced by President Obama and President Piñera in March, to create a US-Chile Business Council on Energy.

On October 6, AmCham held a ceremony at the W Hotel to mark the creation of the Council, which was opened by AmCham’s president, Javier Irarrázaval, who is also the president of the Council. The US Ambassador to Chile, Alejandro Wolff, and Energy Minister Rodrigo Álvarez also spoke at the event which was attended by AmCham members and other guests.

“This Council is at the core of our mission, which is to promote trade and investment between our two countries,” said Irarrázaval.

The objective of the Council is to increase business opportunities for US and Chilean companies in the energy area; promote viable commercial projects in clean energy and energy efficiency; and support the sustainable development of the energy sector in both countries.

The Council is open to all members of the private sector who wish to participate. It will also provide a forum to interact with authorities from both countries.

“This Council can make an important contribution to the immense challenge Chile faces in energy in the coming decades,” said Minister Álvarez.

The Council has created five working groups that will focus on the various challenges it faces. These groups with their respective coordinators are: financing (René Muga), regulatory norms (Esteban Illanes), training (Gerardo Barrenechea), technology (Gabriel Olguín) and infrastructure (Antonio Monzón).

The United States has a wealth of experience in all these areas which will greatly benefit Chile. This includes world leading universities, innovative research centers, regulatory experience which is different in each state, and incentives for clean energy development, said Irarrázaval.

Each of the working groups will study the proposals in a report recently submitted by a panel of experts to the Energy Ministry to determine how the Council’s work can complement them, said Irarrázaval.

“Chile needs to be more competitive in today’s world and energy is an absolutely vital component of this,” said Irarrázaval. With electricity and fuel costs in Chile amongst the highest in the OECD, finding new, cheaper sources of energy should be a key priority for the country, he added.

Minister Álvarez agreed that high energy prices are a concern. To achieve the government’s goal of becoming a developed country this decade, Chile must grow at an average 6% annually, which requires more energy that is cheaper, safer and cleaner, he said.

“We have to make a huge effort in energy efficiency but even then energy demand will double in the next decade,” said Álvarez.

Considering this growth, the Energy Ministry’s main goals are energy security, lower energy costs and environmental protection. To meet these goals, more non-conventional renewable energy and energy efficiency projects are needed, noted Álvarez.

The Council can play an important role in helping the government achieve its goals, while also promoting new business opportunities, but coordination with the public sector is essential, said AmCham’s Irarrázaval.

On behalf of the US Energy Secretary, Steven Chu, Ambassador Wolff congratulated AmCham on the Council’s creation.

“The US and Chile have a common energy agenda,” said Wolff. “Accessible, secure and clean energy supplies are important for all of us, but the public and private sectors must work together if we want to achieve our objectives.”

Wolff praised Chile’s progress in developing sources of energy not based on hydrocarbons, but said the best way to improve productivity and reduce greenhouse gas emissions, while saving money and driving economic growth, is to invest in energy efficiency. The United States’ expertise and experience in this area could greatly benefit Chile, he added.

Chile and the United States have a long history of energy cooperation and share a focus on energy security, sustainable growth and environmental protection, noted Wolff. Chile is already a member of the Energy and Climate Partnership for the Americas, which is promoting clean energy and measures to mitigate climate change in the region.

Under the framework of this initiative, Chile has created a Center for Renewable Energy (CER), designed to become Latin America’s center for research in this area. In May a group of US experts visited Chile to study its geothermal energy potential and the two countries are also developing a solar energy project in the Atacama Desert.

“We hope that, with the Council, these types of initiatives will continue and expand,” said Wolff.

One of the first activities of the Council will be to meet with an energy trade mission from Illinois on March 23-24, 2012. It will also take part in the International Energy Fair (IFT Energy) to be held in Santiago on May 9-11. The aim of the Fair, which is being organized by Kallman Worldwide and sponsored by the Chilean government, is to showcase clean energy technologies. “We want to make Chile into the energy capital for the hemisphere,” said AmCham’s Irarrázaval.

It is up to Chilean and US companies to take advantage of the opportunities created by the Council, but AmCham is proud of its involvement in launching this promising bilateral initiative. As Ambassador Wolff said, “the Council is an initiative that offers only advantages for both our countries.”

Julian Dowling is Editor of bUSiness CHILE