Chile
Q&A

Helping ease the progress of Chilean transmission projects

Bnamericas
Helping ease the progress of Chilean transmission projects

Chile’s President Gabriel Boric was due to promulgate on Friday the government’s energy transition bill, which was given the green light by congress last month.

The text – after a pillar establishing energy storage auctions was scrapped since the measure was no longer deemed necessary – is transmission-focused. 

A central goal is helping accelerate the execution of grid-bolstering projects, particularly those in zones south of capital Santiago.

In terms of the sector pipeline, 14 transmission projects, involving outlay of US$1.89bn and with a combined length of 1,559km, were in the environmental review phase in October, according to an energy ministry update. The BNamericas database contains details of more than 200 early phase Chilean electric power projects that are either standalone transmission works or energy projects that have transmission components.

To find out more, BNamericas conducted an email interview with Javier Tapia, executive director of local transmission industry association Transmisoras de Chile.

BNamericas: Congress recently approved the energy transition bill. Is this welcomed?

Tapia: Yes. As the transmission sector, we welcome the completion of the legislative process in congress for the energy transition bill, which was unanimously approved by the chamber of deputies. 

This future law contains important tools to ease and expedite the incorporation of essential works in some areas of the country, thus strengthening the national electrical system and ensuring more equitable and affordable access to clean power for all inhabitants of the country.

Of course, there are still important aspects that will need to be addressed later and should not be forgotten: for example, resilience and decongestion of the system are urgent priorities that still need to be addressed. Advancing with works that help alleviate current restrictions, reduce technical losses, and ensure continuous and high quality electricity supply is essential, especially in areas where infrastructure faces significant limitations or where energy demand is growing rapidly. These actions will be crucial to strengthening the electrical transmission network and consolidating a sustainable and equitable energy transition.  

In this context, we trust that other relevant issues for this sector will be addressed in the near future. For example, we consider it a priority to quickly discuss various processes and methodologies, such as those for annual and long-term planning, as well as the qualification of transmission facilities. These processes are crucial to ensuring an efficient and resilient transmission system, prepared for the future challenges posed by climate change and the increased integration of renewable energy. Additionally, solutions can be sought to resolve the persistent delays in regulatory processes that are currently affecting investment decisions.

These and other important consensus points related to transmission are, we believe, issues that can be discussed, developed and implemented in the short term.  

That being said, I would like to reiterate that we value the progress represented by this bill. It reaffirms Chile’s commitment to the development of a sustainable, competitive, resilient transmission network system that can meet the country’s future demands.

BNamericas: For the association, what are seen as the key pillars or most important aspects?

Tapia: Without a doubt, there are two fundamental pillars of the future law: allowing the review of investment values for works facing execution delays and the rate recognition of mandated works that are necessary and urgent for the system, especially in Ñuble region and other southern areas.  

This should facilitate not only the deployment of transmission networks but also the development and integration of renewable energy that previously lacked the feasibility for connection, particularly in areas with high generation capacity, such as northern Chile. Expanding transmission lines and adopting advanced technologies will be essential to transport this electricity efficiently to major consumption centers, strengthening the availability of clean energy across the entire country.  

At the same time, the regulatory flexibility is key to reducing the time taken in bidding and authorization processes without compromising technical or environmental standards. Allowing the expansion works to return to their owners and introducing mechanisms for resolving disputes or delays will accelerate the implementation of strategic projects, responding in a timely manner to the growth in energy demand and more quickly connecting renewable generation to the national electrical system.

BNamericas: Is there an estimate for when investments related to this could start flowing?  

Tapia: Investment could begin to materialize as early as 2025, depending on how quickly the regulatory and administrative processes associated with the new rules are established. However, it’s important to highlight that major transmission works, due to their complexity, require extended timelines for both planning and execution. 

Nevertheless, we see a positive willingness from the sector to mobilize resources as soon as the rules of the game are clearly established. Remember, this future law depends on several regulatory resolutions that need to be issued for its implementation, so we hope that these will happen soon and that the regulations will be as clear as possible.  

As a sector, we’re already preparing for the implementation of the law and trying to anticipate potential issues that may arise. We hope that, just as there was an extended period for discussing the bill, there will also be an adaptation period for companies taking on new responsibilities.

BNamericas: In terms of the transmission system in general, for the association, what are the most important or urgent pending works?

Tapia: As mentioned earlier, there are a number of works in some southern regions, in particular, that are halted due to cost overruns and need to be resumed as soon as possible. The new law should allow these to be unlocked, given the review of their investment values. We’ve been discussing with the ministry of energy to determine which of these works will take priority. We also hope to soon know the list of “necessary and urgent” works to be determined under the new regulations.  

In general, the most needed works include the following:

Expansion of trunk lines: Particularly in the northern macrozone [comprising regions Arica y Parinacota, Tarapacá, Antofagasta and Atacama], to transport the growing installed capacity of solar and wind generation.  

Decongestion in the central-southern zone: Improving transmission capacity between critical regions like Biobío and the [Santiago] metropolitan region to ensure supply to major consumption centers.

Storage and flexible transmission projects: Works that combine storage and smart grids to optimize energy flow and reduce operational restrictions.

Modernization and repowering of existing infrastructure: Incorporating advanced technology to enable more efficient and resilient operation in the face of contingencies.

These and other measures will be essential to support Chile’s ambitious decarbonization plan and ensure that the electrical system can adequately meet the demands of a sustainable future.  

ALSO READ: Chile awards US$370mnn in transmission work

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