Chile study takes aim at improving territorial management, easing energy project progress

Chilean renewables and storage chamber Acera presented a pioneering report that delves deep into the enabling conditions for the deployment of additional clean energy capacity and green hydrogen infrastructure over the coming years.

In terms of generation, Chile would need to add multiple gigawatts of clean capacity to the grid through 2040 to reach a national policy goal of a zero-emissions generation sector – but achieving this will require action on fronts including territorial management.

Acera executive director Ana Lía Rojas, during a presentation of the report, cited the task of phasing out fossil fuels, along with building transmission lines and green hydrogen infrastructure.

“We’ll only be able to overcome these challenges with effective territorial management and commitment, therefore, from all sectors,” Rojas said.

A lack of clear territorial management policy has generated “many gaps, both for the development of projects and for the certainty of the community, principally for the materialization of the objective of decarbonization of our energy matrix,” permitting lawyer at local firm Prieto, and Acera advisor, Romina Tobar said.

Communities and generation and hydrogen project developers need greater clarity over what can be built in a given piece of territory, the event heard. 

According to an August energy ministry report, 133 generation projects (including storage) for a total of 15.5GW and US$21.6bn were in the environmental review phase. There were also 19 standalone energy storage projects (2.26GW, US$2.92bn), 12 transmission projects (1,559km, US$1.87bn) and five green hydrogen projects for a total of U$11.2bn.

The Acera research is designed as an input for policymakers and the energy industry, where renewables capacity has climbed apace in recent years and discussion has broadened to also encompass technology and solutions, such as storage and flexible thermoelectric capacity, that permit, from reliability and economic perspectives, renewables penetration to keep climbing.      

The report states: “Advancing the decarbonization of Chile requires large-scale energy development renewables and green hydrogen (H2V), which highlights the need to strengthen the insertion territoriality of energy projects and compatibility with other uses of the territories. This makes it urgent to review, adapt or generate instruments and regulations that allow taking decisions at different territorial levels.”

“This document constitutes a fundamental contribution to those in the State committed to the design of public policy that promotes territorial management oriented to sustainable development,” environment undersecretary Maximiliano Proaño said.

“Without doubt as a country we have a big pending issue in terms of territorial organization, public-private articulation. As a country, without doubt, we have to advance, strengthening different instruments.”

Government officials are working on regional territorial organization plans.

A 2021 study commissioned by Acera, and being updated, pegged the clean energy capacity requirement at over 40GW, roughly the same amount of generation capacity installed or in the testing phase today.

In terms of territorial management, multiple instruments exist, including planning mechanisms at different jurisdictional levels, among them regional energy, or PEER, plans.

The need to make better use of them and to use available land – given it is a finite resource – as efficiently as possible was a common thread during the presentation.

“Their governance needs to be consolidated and strengthened, especially that of [interministerial committee on cities, housing and territory] COMICIVYT, so that it functions in an integrated manner, combining and harmonizing the different instruments and territorial levels,” Annie Dufey, lead consultant at strategy and research firm Karungen, said.

Karungen, along fellow consultancies Táctica and EBP, produced the report for Acera. Government entities including the energy and environment ministries, along with generators and hydrogen industry chamber H2 Chile, participated in the process. 

H2 Chile executive director Marcos Kulka said project owners understood the importance of early-stage consultation with communities, NGOs and other stakeholders and that, amid historic gaps, carry out work, under their own initiative, in areas such as environmental impact.

While citing the challenges of implementing changes in a sector that is already advancing, Kulka said the research is a “tremendous” input. “I think the study gives us some signals of a shared vision, of being able to strengthen existing governance to support coordination at national, regional and local levels.” 

Claudia Rodríguez, the energy ministry’s territories unit chief, said foundations were in place but they needed leveraging more: “The country has policies, it has regional development strategies, and it has municipal development plans which are incredibly important for territorial organization and where citizen participation is also important.

“Let’s use what we have, use them well, as much as possible. Of course there are gaps, we need to fine-tune them.”

Dufey reinforced an earlier message. “We make the recommendation that this policy, its governance, is still not functioning well. How are these different instruments being organized, who is responsible? Get a bit tougher,” she said.

The report makes multiple recommendations, in areas including institutional robustness, regulations, management, participation, community information sharing and training.

Sebastián Aylwin, head of the environment ministry’s environmental evaluation office, said investors, both public and private, were experiencing challenges in advancing projects and that tackling the roots of this was vital.

“It seems to be that we’re all in a situation where we all face an increased state of conflict and characterizing this well seems, to me, urgent and necessary so that instruments such as territorial organization can generate answers and the requisite consensus so that – and that is what everyone wants – these projects can be carried out in the framework of sustainable development, country development, equitable for all our society.” 

Energy investors have long criticized Chile’s permitting system for being overcomplicated and for generating uncertainty over processing timescales. Legal challenges, even when permits have been awarded and construction started, also create uncertainty. 

Reform bills designed to improve the environmental evaluation system and sectoral permitting are in congress.

During the presentation, differentiated permitting was also suggested, so that the likes of small community projects do not have to go through the same processes as large ones, in line with other comments that local citizens need to feel like they benefit from projects, that they are involved and hold a stake.

“One needs to give priority to this and to be pragmatic, and to get work started in this regard,” said Nicola Borregaard, lead consultant at EBP, indicating that initial steps had been carried out in the energy ministry. 

The report – titled "Habilitantes para la transición energética: Análisis de las prácticas y normas de gestión territorial, identificación de brechas y propuesta de mejoras" (Enabling conditions for the energy transition: Analysis of territorial management practices and rules, identification of gaps and improvement proposals) is published on Acera’s website.