Q&A Series: Donny Holaschutz Speaks on Renewable Integration in the Power Supply across Chile & Latin America

Renewable energy expert and consultant Donny Holaschutz has worked with Fortune 500 companies, NASA and the U.S. Department of Energy among others, helping to lead innovations in energy and sustainability projects for over a decade across North and South America. He holds graduate degrees in Aerospace Engineering from UT Austin and from MIT’s Engineering School and Sloan School of Management.  Mr. Holaschutz co-founded inodú, a company developing solutions and providing consulting services to improve the energy value chains in Latin America.  While at inodú, Donny has helped policy makers and companies find opportunities to integrate renewable energy for energy storage and flexible generation capacity.

Michael Levitin: Chile leads South America in integrating renewables into the power supply. So, what have been some important factors which have led to their rapid integration of renewable energy? Are there other regions that have experienced similar situations?

Donny Holaschutz: One thing that has helped Chile is it established an environment that truly attracts investment. Recently, Bloomberg New Energy Finance ranked Chile as the number one place to invest in renewable energy out of 103 developing countries in the world.

Proper transmission infrastructure planning is an important ingredient to integrate renewable energy.  A place where this has happened is Texas, which is a pioneer in using transmission planning as a mechanism to incentivize renewable energy integration. Texas today is among the U.S. states that have integrated the most renewable energy, and they lead in wind integration. In part, they did this by developing a transmission system and defining Competitive Renewable Energy Zones – areas identified as having high renewable energy potential – and then they made big investments to develop transmission to those zones. However, this policy has not been enough to completely avoid curtailment of renewable energy. Chile has faced similar challenges, even though it has significantly increased its transmission capacity over the last couple of years.

Levitin: Can you clarify the role of transmission in integrating renewable energy? Are we going to have to think of other elements moving into the future?

Holaschutz: There is a “10-2 Year Rule.” Essentially it can take up to ten years to develop a transmission project (it’s hard to permit); but it can take up to two years to build any type of wind or solar project. So, there’s a natural dynamic that takes place as soon as these transmission projects are built, developers see the transmission lines and start developing renewable projects in high resource areas where transmission capacity is available. Very rapidly the lines can become saturated. Even if you build very large transmission infrastructure, this creates challenges.

Thinking about the future, regulators, RTOs, and developers have to recognize there’s a paradigm shift happening in technology, and adjust their paths moving forward. Energy storage is becoming much, much cheaper, it can be installed with the same speed as renewable energy projects (two year or less) and is becoming an alternative to developing transmission capacity to continue the integration of renewable energy. But energy storage is energy storage, it is not a traditional component of the transmission system, it can be installed in front of the meter to provide services to the wholesale market, installed in conjunction with a renewable energy asset or even behind the commercial and industrial client’s meter.

When installed outside the traditional definition of the transmission segment, it can still provide services to the transmission system by, for example, helping defer the development of transmission infrastructure. So going into the future, you have to think about how to use energy storage across all segments and the specific services energy storage can provide to function as a transmission asset.

At inodú, we recently published a report for the GIZ [German Corporation for International Cooperation, Deutsche Gesellschaft für Internationale Zusammenarbei] where we looked at some of the challenges to address flexibility needs in the Chilean electricity market and some practices to define the role of storage in the market.  The report was generated to support a broader effort of how to incorporate flexibility into the system in order to continue to integrate renewable energy an accelerated rate. Defining such regulatory changes was identified as a priority in Chiles’s 2018-2022 Energy Road Map.

Similar discussions have been present in the United States through their Federal Energy Regulatory Commission [“FERC”] and other regulatory bodies. For example, in the U.S., FERC published Order 841 to amend regulations in the Federal Power Act removing barriers in energy storage systems in the capacity, energy and ancillary services markets. The FERC has also made definitions on how energy storage can be used as a transmission asset. Defining the role of storage across all segments is an important step which will support the integration of renewable energy in the future.

Levitin: What are some other strategies Chile and countries across Latin America are employing to boost renewable energy investment and production?

Holaschutz: A lot of governments have recognized the importance of power purchase agreements (PPA) and how to use long-term contracts to incentivize the development of renewable energy projects. For example, in Chile’s publicly regulated PPA auctions, where distribution companies buy energy for regulated clients, the establishment of the block scheme in the 2013/03 (second call) made it easier for renewable energy generators to participate. The public auctions encouraged a lot of development and construction projects that are driving the integration of renewables into the market.

Many countries in Latin America have taken similar approaches. Mexico, after its energy reform which was formalized with the passing of a new electricity law in 2014, created an opportunity through PPA auctions for renewable energy developers. In the last three auctions in Mexico, wind and solar developers won most of the contracts, and through those PPAs the country is creating mechanisms to rapidly integrate renewables.

Yet another example is Argentina, where renewable developers participated in PPA auctions which were quite successful. Colombia recently started down this path, with an auction currently being conducted by the UPME – in this auction, only non-conventional renewable energy generation projects can participate.

Across Latin America, renewable energy integration will be positively impacted by access from renewable energy developers to these public PPA auctions.

Levitin: Recently three of Chile’s largest mining companies signed long-term PPAs to supply themselves with 100% renewable energy. How much is the message of zero-emissions electricity catching on in both corporate and government sectors in Latin America?

Holaschutz: By observing the results of the public PPA auctions, large commercial and industrial (C&I) clients are noticing how cost effective renewable energy is – plus they’re also feeling more pressure from investors to go into more sustainable practices, so a lot of companies that operate across the region are putting out private PPA tenders where they are demanding 100% renewable energy.

The mining companies in Chile have done this because it makes economic sense. It also adds to their sustainability goals; they’re able to satisfy some of the demands of their investors who care about these sustainable practices. If the trend continues and most C&I clients start demanding this in Chile, it means we’re at a huge renewable energy deficit because they’re demanding the system provide 100% renewable energy but the system as it stands today is only producing (on an average monthly basis) 13% with wind and solar. So, if this trend continues there’s going to a huge need for renewable development and investment.

A main reason why renewable energy makes a lot of economic sense in Chile, where is the variable cost of producing energy through coal or natural gas is much higher than the levelized cost of solar in many regions.  Hence, installing solar is an energy-efficiency measure—it’s much cheaper to be supplied by a solar energy project than to burn coal to satisfy your demand, and these trends are becoming more common across Latin America.  C&I customers are looking at these economics and demanding cheaper renewable energy.

Levitin: If renewable energy is integrated at a rapid rate, can the required flexibility come from natural gas generation or hydroelectric generation? Let’s start with hydropower, a key source of energy across many Latin American nations with tremendous water resources. How can flexibility be incorporated into energy economies that are heavily dependent on hydro?

Holaschutz: Hydro projects weren’t built originally to supply flexibility to the grid; they were built to supply energy. But dams have storage capacity, so those hydro projects that are already built can provide a lot of flexibility to the grid. Countries like Brazil, Colombia, Chile, Peru, Costa Rica already have a significant amount of hydro capacity installed in their systems which can provide this flexibility. The challenge these markets will face as they integrate more renewable energy is: how are you going to pay for flexibility (beyond just supplying energy)?

One of the big issues facing hydro in the region is the changing climate. Due to reduced snowpack and rainfall, there has been a significant reduction of hydro potential. In Chile, for example, if one looks over the past 50+ previous hydrological years, the previous 10 years have consistently been significantly below the average observed from the previous half century. Dryer hydrological conditions is something Colombia and Brazil are experiencing as well, and this trend is important because these are the sources that traditionally provided energy and have the potential to provide flexibility into the future. Dryer hydrological conditions will create incentives for new capacity that can provide that flexibility if these trends continue.

Levitin: Lots of cheap natural gas is starting to come from Argentina, making it a great option for neighboring economies like Chile. What could be the role of natural gas in providing flexibility to the power market in the future?

Holaschutz: Flexible gas technologies allow you to essentially complement the integration of renewable energy. These generators are flexible because they can start and ramp up quite rapidly, which allows the system to better deal with the variability and uncertainty faced when renewable energy is integrated. The question is natural gas’ sustainability over the long term and whether it will be available and (if so) at what cost.

Countries such as Chile – which are affected by Argentina’s shale gas production in Vaca Muerta – are looking closely at this as an opportunity not only to supply the existing gas generation capacity, but also to evaluate investments in flexible generators. Looking at gas exports from Argentina to Chile, generators with existing assets today are signing contracts priced as low as $3 and $4 per MMBTU. So, while there’s uncertainty around how long [cheap gas] will remain in the future, the low prices are creating a short-term market signal that is prompting actors to think about how to use this cheaper natural gas.

Levitin: Finally, how do you see Chile and its Latin American neighbors competing, and leading, on the path to 100% renewables?

Countries in Latin America are certainly looking at what other countries are doing. The long-term commitments that governments are making provide signals to the market for when it is acceptable to reach 100% renewable energy. Renewable energy integration depends a lot on regulation, opportunities and costs in the markets, but long-term goals defined by governments have an effect in terms of providing direction.

Recently, Chile announced it wanted to reach carbon neutrality by 2050 and made commitments with other countries that participated in the most recent G7 summit. It set a direction and an example that other countries are going to look at across Latin America. You also have countries like Costa Rica that are committed to reaching 100% carbon neutrality by 2030. There’s an effect of, “This other country is doing it, so I should think about doing it, as well.” I think countries are looking at these examples and as they make more aggressive commitments moving forward, it’s going to have an impact on the region. It is important to consider that in Costa Rica 98.6% of its energy in 2018 came from renewable sources (if you factor in hydropower), so their path to 100% is easier than Chile.

A Look Back at Interconnect: Austin, a Path to 100% Forum

Interconnect Austin in Review

The first Path to 100 Forum, Interconnect Austin, campaign was held in Austin, Texas on the University of Texas campus on September 24, 2019. We had a diverse range of attendees from across city officials, utility professionals, IPP’s, academia, and students.

Two panels, both moderated by Richard Amato (Director or Energy & Mobility of the Austin Technology Incubator), each covered the challenges faced on a path to 100% renewables.  One panel looked at the challenges from a global viewpoint and the other from a Texas perspective – each of these panels was filled with a robust discussion on issues surrounding the renewables landscape then followed by a Q&A session fueled by questions from the audience and online via a Sli.Do link.


Panel 1

Our first panel, titled “Global Lessons from the Path”, was focused on global trends in renewable energy and clean technologies.

The panelists included:

Varun Rai is director of the Energy Institute (EI) at the University of Texas at AustinVarun Rai
Director at the Energy Institute (EI)
University of Texas at Austin


Petteri Laaksonen of LUT UniversityPetteri Laaksonen
Research Director of Energy Systems
Lappeenranta University of Technology


David Millar, Director of Resource Planning at Ascend Analytics
David Millar
Director of Energy Analytics
Ascend Analytics


The Path to 100% Forum panelists discussed their research, experience, and efforts in clean tech and high-renewable power systems and renewable fuels.  Each referenced cases and steps being taken to integrate high-renewable power systems and the technologies necessary to execute these systems today and in the future.

One item became which became the central topic of discussion with the first panel was the importance of rapidly reducing the use of fossil fuels; on this train of thought, flexible generation and storage were mentioned frequently as important ingredients in cooking up a realistic solution to enable the reduction of fossil use in maintaining a realistic path to 100% renewables.

Panel 2

Our second panel was titled “Bringing it Home for Texas” – as the name implied, the panelists took up the trends & tech highlighted in the global panel and applied them to Texas (specifically, the greater metropolitan region of the IH-35 Texas Corridor consisting of Austin, San Antonio and surrounding suburbs).

The panelists included:

Erika Biershbach Vice President of Energy Market Operations and Resource Planning with Austin EnergyErika Bierschbach
Vice President of Energy Market Operations
and Resource Planning
Austin Energy (Municipal Utility of Austin)


Frank Almaraz - Chief Administrative & Business Development Officer for CPS EnergyFrank Almaraz
Chief Administrative and
Business Development Officer
CPS Energy (San Antonio Municipal Utility)


Cheryl Mele - Sr. Vice President and Chief Operating Officer, Electric Reliability Council of Texas (ERCOT)
Cheryl Mele
Senior Vice President and
Chief Operating Officer
Electric Reliability Council of Texas (ERCOT).

Our second group of Path to 100% Forum panelists discussed the current situation in Texas, including the high electricity prices in August this year, and their impact on market players and new investments. During the discussion, the trend of non-investment in inflexible generation assets received a lot of attention – mostly because panelists expressed a need to create an environmentally, operationally, economically viable path to 100% renewables.

Furthermore, the utilities panelists expressed that whichever path we take has to be both clean and affordable for their customers.

Video Recording of the Event



We’re happy to report that audience feedback during the luncheon held after the second panel was highly positive – attendees said they found the event an engaging success, they enjoyed both the content and how Path To 100% panelists were able to compare & contrast along international discussions and their realistic application at a local level.  We will be using lessons learned from this Interconnect Forum in our future forums, such as one we will be hosting in California in late 2019, and we will also be leveraging survey response data for continuous improvement at each event.

A Warm Thanks to the Austin Technology Incubator

Path To 100% would like to give a big shout-out to the team at the Austin Technology Incubator at the University of Texas.  With their guidance, support, and marketing collaboration, we were able to move this Interconnect Forum from a whiteboard wish-list to a renewables discussion reality.  In short, because of their team – passionate experts such as Richard Amato (who served as our moderator) and Mitch Jacobson (Director, Austin Technology Incubator & Blackstone LaunchPad at the University of Texas at Austin) – we were able to truly deliver a forum worthy of the importance surrounding the road to renewables.

Transitioning to Renewable Energy Gains Momentum

The clean energy transition continues to gain pace.

Wind Power Statistics

The state of Texas now ranks first in the nation for installed wind capacity and number of turbines, according to the US Energy Information Administration. (EIA, July 2019)

Texas ranks first in United States installed wind capacity and number of turbines from US Energy Information Administration

At least one installed wind turbine can be found in 41 states. Naturally, as the saying goes, everything is bigger in Texas: and Texas has more than 13,000 turbines and the most installed wind capacity at 24.2 gigawatts (GW).

And as you’d expect, turbine technology has advanced. Larger turbines provide more wind power density, which means more power capacity per individual turbine.

The evolution of the wind turbine over time from BloombergNEF

Other states transitioning to renewable energy with wind production and turbines are California, Iowa, Oklahoma, Kansas and Illinois. States with the highest turbine heights are those that have adopted renewable power generation more recently and are taking advantage of the larger turbine efficiency. Those with turbines above the national average in height include Connecticut, Rhode Island, Ohio, Michigan, and Missouri.

Evolution of wind turbines show the promise of transitioning to renewable energy with wind power density

Texas Keeps Transitioning to Renewable Energy Through Incentives for Solar and Wind

A new law in Texas (known in the state’s economic development sector as the “Chapter 312 abatement program” – from H.B. 3413) extends the deadline for wind and solar generation property tax abatement programs. The economic development programs were set to expire on Sept. 1 of this year. The new deadline is Sept. 1, 2029. The abatements will continue to boost solar and wind development in Texas. (Solar Industry Magazine, August 2019)

The below chart shows a sample project tax impact with Chapter 312 abatements, and why this is a boon for renewable economic development in states like Texas which have no income tax and rely heavily on property taxes:

Texas Chapter 312 Abatement Tax sample showing positive economic development impact of renewables

Renewable Capacity Exceeds Coal in US

As coal generation has declined due to several market forces, renewable energy has surged—for the first time producing more power in the US than coal. (Yale Environment E360 Digest, June 2019)

The Federal Energy Regulatory Commission (FERC) reported 21.56 percent of the nation’s generating capacity as of April 2019 was from solar, wind, hydropower, biomass and geothermal.

Coal continues its 40-year downward trend, accounting for 21.55 percent of generation in the US. Natural gas continues to grow to produce more than 44 percent of the US total energy capacity as of last April.

FERC forecasts renewables could account for one quarter of the nation’s capacity in just three more years.

More Cities & States Commit to 100% Renewables

More than 100 cities in the U.S. are leading the transition to 100% renewable energy. (Energy Manager Today Dec 2018).

Communities are committing to 100% clean energy or carbon-free energy to power their municipal buildings and fleets.

States mandating 100% renewable or carbon-free generation for all users include California, Hawaii, Massachusetts, and New Mexico. And the list is growing!

Their commitments vary from 100% clean energy or renewables to 100% carbon-free energy which includes nuclear for all power sold in the state.

Interest is especially strong in communities and states located in the country’s solar and wind corridors.

Map Showing States with Commitments to a 100% Renewable Energy Goal

Let’s take a closer look at some of the cities and states committing to a Path to 100% renewable energy transition:

  • Abita Spring, Louisiana (population 2365 in 2010) Mayor Greg Lemons called the policy change to 100% renewables by 2030 a “practical decision” for the environment, the economy and for what constituents want in his small town. “Politics has nothing to do with it for me. Clean energy just makes good economic sense,” according to Lemons.
  • Norman, Oklahoma (population 122,843 in 2017) is the first in that state to set renewable goals: 100% renewable for all city buildings by 2035 and across all city facilities and fleet by 2050. A citizen-run committee is looking at plans for new wind and solar power generation.
  • Madison, Wisconsin (population 255,214 in 2017) Common Council member Alder Zach Wood says he and his fellow leaders support the transition to 100% renewable energy to create more local jobs, keep air and water cleaner and electricity more affordable and sustainable.
  • Cincinnati, Ohio (population 301,301 in 2017) Late last year the city council passed a resolution setting a goal to power all of the city-owned and operated facilities with 100% clean, renewable energy by 2035. This comes on the heels of council endorsement of construction of a 25-megawatt solar array—the largest city-owned solar installation in the country.
  • Kansas City, Missouri (population 488,943 in 2017) This spring, city council members unanimously approved the transition of all of its municipal electricity to carbon-free sources by the end of 2020! The city will locate 25 acres to develop a 5-megawatt community solar installation. City employees will have the option to subscribe to the farm. Also, all-electric or hybrid-electric vehicles will be purchased for city use.
  • The State of California (5th largest economy in the world) Officials passed a measure in 2018 in response to climate change to accelerate its timeline to move to carbon-free power generation by 2045 for all retail electricity sold in the state. This includes renewables like solar and wind and nuclear power to generate electricity. (Sacramento Bee, Sept 2018)
  • Massachusetts and Minnesota are each considering legislation that mandates the use of renewables or carbon-free energy

Fossil Fuel States:

It’s understandable that the transition to renewables is more difficult in areas where coal, oil, and gas production has been a mainstay of the economy.

Case in point: New Mexico.  Elected state officials in the “Land of Enchantment” recognize the state has a $1.2 billion budget surplus due to revenue from oil and gas production in the prolific Permian Basin, making it the third largest oil producing state in the U.S. However, they also don’t want to see their oil, gas and coal producing state left out of the transition to renewables and want to cut greenhouse gas emissions in their state.

It’s important to note that more than half of the electricity currently used by New Mexico homes and businesses is generated from coal, which is on the decline due to rising production costs compared to other forms of generation and environmental concerns.

New Mexico also sits in the top 15 of states for wind power, and its solar energy resources are described as among the best in the country by State Representative Nathan Small.

Just this month, Governor Michelle Lujan Grisham signed the “Energy Transition Act.” It mandates “that the state’s publicly regulated utilities get all of their electricity from carbon-free sources” like solar and wind (and possibly nuclear) by 2045. (NPR, March 2019) The act sets interim goals, also: 50% carbon-free generation by 2030 and 80 percent by 2040.

Bottom Line:

All of the commitments to renewables can be traced to market forces, regulation, and concern about the environment. Communities and states are leading the way to secure sustainable, affordable and reliable power for the future.