Amid energy transition, Chile officials work on draft transmission legislation

Bnamericas Published: Wednesday, January 11, 2023
Amid energy transition, Chile officials work on draft transmission legislation

Chile is working on draft transmission legislation, energy minister Diego Pardow told BNamericas on Tuesday on the sidelines of a sector event.

Investment in new lines and energy storage is needed to help meet the country’s 2050 decarbonization goal and support electrification.

On Monday, renewables association Acera underscored transmission as one of the key factors impacting the sector and its future trajectory.

Ministry officials are focusing on two legislative initiatives in the sphere. One introduces relatively limited changes in areas where there is already general consensus, the other larger in scope and requiring a longer period of planning and discussion.

The first could be finalized this quarter, Pardow (pictured) said. One area addressed – to help reduce timeframes – is the tendering framework for additional project components, another area encompassed is sector vertical integration rules. 

“This project is almost ready,” Pardow said on the sidelines of Encuentro Energía Eléctrica, held in capital Santiago. “We’re in talks, with the industry, prior to its final drafting.” 

He added that the second was a more complex bill that would introduce some structural changes and be introduced further down the road.

Encuentro Energía Eléctrica was jointly hosted by generator association Generadoras de Chile, distribution company chamber Empresas Eléctricas and transmission body Asociación de Transmisoras de Energía

According to official estimates, Chile will need 4,000km of new lines in the coming years to expand the current network of roughly 30,000km.

Javier Tapia, executive director of Asociación de Transmisoras de Energía, told BNamericas it translated into a significant figure in terms of requisite investment in power lines, adding that this may result in an uptick in project auctions over the coming years.

Investment in energy storage is needed too, Tapia said.

New-build projects, including a first-of-its-kind standalone energy storage initiative, and expansion projects are expected to be auctioned by grid coordinator CEN this year. Planning entity national energy commission CNE considers private sector proposals when drawing up lists of projects for auction. 

Transmission firms are awaiting long-term sector plans, to see what projects will be needed from the next decade.

“What’s coming for the transmission sector is how to reconcile this 4,000km figure that’s being floated with concrete planning, which is what the State does,” Tapia said. “Our message as an industry is that we need to know, today, what’s needed post-2030, what will be the mix of lines and storage the country will need...”

The chief corridor that needs bolstering runs between the country’s sundrenched north and demand centers in the central zone. A major line, Kimal-Lo Aguirre, is due to be built by 2030 to help ease congestion.  

Chile’s renewable energy park has grown apace over the past decade, boosting the role of clean energy in the grid but straining transmission capacity, particularly in the north, home to world-class wind and solar resources. At least 15GW of renewables and storage capacity is needed to replace the roughly 5.5GW of coal-fired capacity that is being pulled from the grid.  

Providing a view from the power sector, Claudio Seebach, executive president of Generadoras de Chile, said transmission and storage were critical.

“We need lines that are built on time, that are resilient to the effects of climate change and shifts in temperatures and that are robust, have the capacity to transport all this new renewable energy,” Seebach told BNamericas

ALSO READ: Generation industry commits to US$23bn investment in renewables to lead the energy transition

Ministry officials and Generadoras de Chile are also working in the project permitting sphere, to improve and accelerate processes while maintaining environmental standards. 

Just under 450 renewables and storage projects are in construction, with associated capacity and outlay of around 6GW and US$5.6bn, respectively, according to Acera.

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