Chile transmission bill in pipeline to cope with renewables issues

Bnamericas Published: Tuesday, November 22, 2022

Chilean officials are preparing a transmission bill and are due to present the draft legislation next year.

The news follows calls from power generation sector stakeholders for work in the sphere of planning and market structure. 

Successful policy has fueled a rapid buildout of renewable energy plants in Chile. But the influx has strained the transmission system, not only sparking problems in areas such as curtailment and price decoupling but also raising concerns over the feasibility of incorporating the multiple gigawatts of new capacity the country needs to decarbonize over the next decade.  

During industry conference ElecGas 2022, organized by local firm B2B Media Group, energy minister Diego Pardow said the transmission bill was designed to “close some gaps,” adding that authorities were aware of the challenges in the area of sector regulation.

Public and private stakeholders are working on the main pillars of the bill, BNamericas has learnt. Grid planning may be among them.

Planning for the decades ahead – especially given the expected incursion of power-hungry green hydrogen plants in the country and a 2050 carbon neutrality goal – is seen as vital. 

Rodrigo Moreno, a researcher at Chilean complex engineering systems institute ISCI, said he hoped it was understood that market and regulatory reforms were key to hitting decarbonization targets.

Deninson Fuentes, head of the electricity unit at national energy commission CNE, said officials were aware of the urgency, citing the need for carefully considered measures. “We need to advance in cooperation with the industry,” he said.


In parallel, public and private sector players have been analyzing problems in the short-term market, where decoupling is impacting not just the two generators recently named publicly but also others that have not made official declarations, said Ana Lía Rojas, executive director of local renewables chamber Acera, describing the situation as “critical” for sector firms with power-purchase agreements in the regulated market. 

Pointing out that at least 4GW of new renewables capacity is due online over the new few years, Rojas urged policymakers to focus on the areas of grid flexibility and remuneration models. 

“This needs discussing in the very short term, with concrete measures…” Rojas told the event held in Santiago on Tuesday, adding that there was risk of dented investor appetite. 

Grid congestion in Chile’s renewable energy resource-rich north during peak power production hours has created dispatch problems.  

Rating agency Fitch said in a recent statement: “Renewable projects are exposed to increasing curtailment risk due to geographical power oversupply in resource-rich regions and lack of system flexibility. Electricity delivery restrictions are expected to increase as additional non-conventional renewable energy (NCRE) assets are added to the grid.”


Just over 17GW of NCRE and storage projects were in the environmental evaluation phase in Chile in October, according to an Acera report. The bulk, 7.32GW, corresponds to solar PV, with wind accounting for 6.60GW. 

Officials are also evaluating 2.08GW of solar-storage hybrid, 600MW of solar thermal, 560MW molten salt storage, 57MW battery storage, 55MW mini run-of-the-river hydropower, and 30MW biomass.

Developers are building 5.79GW of NCRE capacity, of which 4.49GW is solar PV and 922MW wind. On top of this, some 29.8GW of projects have an environmental license. 

Considering plants that are operating as well as those in the testing phasing, Chile’s installed capacity stood at 33.0GW in October. NCRE plants accounted for 40.8%, thermoelectric 38.5%, conventional hydropower 20.6% and storage 0.19%. 

Congress recently approved – and President Gabriel Boric signed into law – an energy storage bill that outlines remuneration mechanisms for standalone projects and may increase appetite for this type of investment, needed to help support grid decarbonization. Officials have a year to draw up secondary legislation to guide its implementation.

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