The Report's View: Chile will remain one of the most attractive power markets in Latin America over the next 10 years due to its strong electricity consumption growth , driven by the country's expanding manufacturing sector and energy intensive mining industry. A stable business environment and liberalised electricity sector will continue to support investment in new power capacity, strengthening our upbeat forecast for growth in electricity generation . While investment in large-scale hydropower projects will be hampered by regulatory uncertainties , renewables and natural gas-fired power generation will experience considerable growth and create significant investment opportunities over our 10-year forecast period.
After a slowdown in 2014, the Chilean economy will expand 2.6% in 2015, driven by strengthening manufacturing sector and private consumption growth. Weakness in the Chilean peso and lower oil prices will boost these dynamics, ensuring sustained economic growth over the next decade. Our Country Risk team forecasts real GDP will grow by an average of 4.1% year-on-year (y-o-y) between 2016 and 2024. The resiliency of Chile's energy-intensive mining sector to a lower copper's price, coupled with an expanding population, will contribute to strong growth in power demand over the coming decade.
We forecast electricity consumption to grow by an annual average rate of 4.50% between 2015 and 2024, reaching a total of 105.70 terawatts hour (TWh) by the end of our 10-year forecast period. Meanwhile, we forecast total power generation to increase by an annual average rate of 4.50% over the next decade, totalling 109.14TWh in 2024. Although this increase will be the result of an uptick in installed capacity across all power sources, we hold a particularly upbeat outlook for renewables and natural gas-fired technologies.