Chile enacts landmark power laws

Bnamericas Published: Monday, October 14, 2013

Chile's President Sebastián Piñera enacted two major power laws Monday, paving the way for project development and more renewable energy.

The president signed the power concession law and the 20/25 renewable energy law, a package deal between the current government and opposition in congress.

The power concessions law looks to facilitate eminent domain proceedings and reduce processing times for power projects connecting to and from the transmission grid. The bill is supposed to slash the average procedure time for power concessions from 750 days to 150 days.

The renewable energy law, dubbed 20/25, sets a national goal of using 20% non-conventional renewable energy (NCRE) by 2025. The law has laid out a power auction mechanism that will ensure the goal is met by NCRE power contracts.

The transmission highway bill, the third major power bill under the current administration, is held up in the congress and faces resistance from opposition representatives who claim the bill is "custom made" to allow for mega hydro projects in the south such as HidroAysén.

The bill would allow for more central planning in selecting a corridor or route for power lines in order to reduce unnecessary redundancy or what energy minister Jorge Bunster likes to call an "electric guitar" effect.

The other major energy bill under review is the interconnection bill which is currently being studied by the lower house's mining and energy committee. The bill will allow national authorities to tender the US$850mn HVDC interconnection of the central SIC and northern SING grids, hopefully in 2Q14.

President of the Chilean metallurgical and metal mechanics association Asimet, Gastón Lewin, called for congress to pass the transmission highway and the power concession bill last week. Lewin called on legislators to pass the bills to help improve the competitive advantage of Chile's manufacturing industry which suffers from high power costs, which account for up to 50% of production costs.

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