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| The SIC Power Grid of Chile |
There’s some unfortunate news out of Chile this week. It looks like the South American nation is facing extended power shortages due to a crushing drought affecting the country. (Remember, south of the equator it’s the opposite season.) Since a good amount of Chile’s industrial power generation comes from hydroelectric plants, the draught is affecting the country in several very bad ways.
This power shortage could have bad effects for the rest of the world, too. Chile is the world’s leading producer of copper — it makes almost a third of the world’s supply. Though the government has said the power shortage would leave the country’s copper mines unaffected, a power shortage should cause infrastructure problems and price increases that have tertiary affects on the economy.
The power shortage is so bad that the government is thinking of instituting a power rationing plan — only the third time the government’s intervened over the last fifteen-odd years. Reservoir levels are at a pitifully low level, and a power-rationing move could reduce as much as 5% to 10% of the country’s power generation.
The main primary industrial power generators supplying energy to the drought-affected SIC power grid are Empresa Nacional de Electricidad SA (EOC, ENDESA.SN), AES Corp. (AES) through its Gener SA (GENER.SN) unit, and Colbun SA (COLBUN.SN).
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