Chile's power grid challenges - DAC Beachcroft

All Collections

Sort By

Chile's power grid challenges's Tags

Tags related to this article

Chile's power grid challenges

Published On: 18 July 2016

Latin American electricity demand is expected to double between 2010 and 2030, requiring USD430 billion in new investments. Chile is no exception to that trend. The country currently has a peak power demand of around 15GW, though a global downturn of copper processing has recently resulted in a slowing of Chilean demand, with an increase of only 2-3 per cent in 2015, compared with the country's average annual demand rise of 5 per cent.

Chile is already one of the world's leading generators of renewable energy and there is confidence that the country will surpass its goal to be 70 per cent powered by renewables by 2050. Indeed, the country's estimated solar capacity potential is such that the regulators and investors are now confident that Chile will be powered entirely by renewable energy come 2050.

Paradoxically, in 2015 Chilean solar and wind energy generators had to curtail their supply into the main distribution network, the Central Interconnected System ("SIC"), the grid accounting for 92 per cent of the population. One of the main problems was that SIC's northern section, the desert region where solar generators are highly concentrated, simply lacks adequate transmission capacity. SIC's operator also preferred to continue running at least three units (around 75MW) of the 152MW Guacolda coal-fired power station. Critics say that this reflects the reality in many other countries where operators of conventional generation are, for technical reasons, reluctant to release the full extent of their flexible capacity into the renewable sector.

To alleviate the solar overcapacity on the SIC, plans for its interconnection with the Great Northern Interconnected System ("SING") are now underway. The SING is Chile's northernmost grid, at the moment largely fed by more expensive coal power. The 3,000-kilometre interconnection is expected to come online early in 2018.

These infrastructure planning issues are also intended to be addressed by draft legislation in the form of the Transmission Law. The proposed law will set long term planning goals to ensure that generation capacity is matched by adequate transmission capacity, while creating a unified transmission system with an independent operator. The draft is not, however, without its contentious aspects, many of which are currently being discussed by a joint senate-congress legislative commission. One of the particular areas of contention is the development of hydroelectric projects, and particularly the management of their perceived environmental and social impacts.

In the meantime, while some developers have started to position solar plants further south in the metropolitan regions, where transmission capacity is more robust, development continues apace even in those regions currently experiencing curtailment. This investment reflects a confidence that the infrastructural constraints will be overcome in the medium term. It is also a signal of the longer term power needs in a country with a growing economy, and whose conventional generation facilities are destined to come to the end of their lives between 2030 and 2045.