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Chile on Its Way to Carbon Neutrality

Jose Maria Lagos and Nicolas Yuraszeck


  • The National Energy Policy targets 100% zero-emission energy by 2050 and 80% renewable energy by 2030, reaffirming commitment to net-zero and decarbonization. 
  • The Chilean government's energy transition agenda includes energy storage promotion, mitigating supply risks, enhancing power transmission flexibility, and addressing political and regulatory aspects. 
  • The bill targets climate and environmental goals through three pillars: electric sector and climate change, efficient power transmission projects, and support for energy storage. 
  • Measures include modifying the bidding system for transmission system expansion, holding owners accountable, and introducing flexibility for urgent works.
Chile on Its Way to Carbon Neutrality
Piero Damiani via Getty Images

A few years ago, Chile´s Ministry of Energy published the National Energy Policy (Política Energética Nacional or PEN by its acronym in Spanish), which focuses on the following objectives: emissions-free energy, universal and equitable access, energetically sustainable cities, sustainable transportation, citizen education in energy, efficient and sustainable industry, local development and decentralization, coordination between institutions, institutional framework and governance in energy, and social and environmental sustainability of energy development.

These objectives aim to achieve the main goal of 100% zero-emission energy by 2050 in power generation, and 80% renewable energy by 2030. The PEN was updated during 2022, re-emphasizing the pledge to net-zero and decarbonization pathway. Today, we find ourselves in the "second half of the energy transition" on this match for carbon neutrality. Prior to the introduction of the energy transition bill, the Government of Chile presented an agenda focused on four areas of action: (i) promotion of energy storage; (ii) mitigation of energy supply risks; (iii) power transmission operational flexibility; and (iv) political, regulatory and emergency power infrastructure actions.

On July 10, 2023, a bill was introduced in the Chilean Congress to amend the General Law on Electric Services (Ley General de Servicios Eléctricos), regarding energy transition, which positions power transmission as an enabling sector for carbon neutrality.

This bill aims the achievement of climate and environmental goals set forth in the Climate Change Framework Law (Ley Marco de Cambio Climático) published in 2022, through three major pillars:

  • (i) Electric sector and climate change;
  • (ii) Efficient development of power transmission projects;
  • (iii) Promotion of competition and support for energy storage projects.

Regarding electric sector and the efficient development of power transmission projects, this bill contains measures such as: the modification of the bidding system for the development of expansion works for the national transmission system, holding the owners responsible for carrying out the bidding processes and the development and execution of the works; the incorporation of new mechanisms that grant flexibility for the execution of urgent and necessary works that are justified to be excluded from the planning processes; among others.

In respect to the promotion and support for energy storage projects, this bill aims to achieve the temporal compatibility of solar and wind energy with electricity consumption, which is why energy storage systems emerge as a key element to allow a greater placement of renewable energy at times when the primary energy is lower, allowing a decrease in dependence on thermoelectric power plants.

The vision of the Electric Transmission as an enabling sector for the energy transition is materialized in this legislative initiative, among other measures, by provisions related to international public bidding processes for large-scale storage systems infrastructure, in order to continue advancing in the respective transition process and the respective investments required for this purpose.

This transition to a decarbonized energy matrix requires strategically planned steps, including the development of transmission infrastructure that allows a safe and optimal transportation of renewable energy throughout the national territory. Although Chile is already injecting a large percentage of renewable energy versus non-renewable energy into the national electricity system (Sistema Eléctrico Nacional), the lack of transmission infrastructure and the continued closure of coal-fired power plants has impacted the short-circuit power, causing several problems such as energy loss and negative effects on the safety and quality of electricity service.

As a result of the above is that earlier this year, the National Electricity Coordinator (Coordinador Eléctrico Nacional), which is the entity in charge of operating, supervising and coordinating the Chilean electricity system, initiated an unprecedented bidding process for the installation of synchronous condensers in the north of the country to strengthen the electric system in view of the retirement of coal-fired units of power plants.

Chile is playing its game towards the energy transition and is currently, at the beginning of the second half of the match.

We see that in order to win this game, there are still many challenges and solutions to be addressed, which will require a joint work between public and private sectors, a regulatory update to include new technologies and adapt the electricity and environmental regulations to a new decarbonized reality.