Chile transmission: 4,000km expansion goal means ‘finding ways of doing things faster’

A bigger role for the State, accelerated project development and enhanced regulatory incentives. 

Those were identified by Chilean energy minister Diego Pardow as among the challenges for electricity transmission.

Pardow, outlining the importance of regulatory work, added: “The State, certainly, has to do more than it is doing today, which is simply auctioning the transmission projects.

“It has to assume part of the responsibility of deploying these infrastructure works.”

According to official estimates, Chile – to help achieve 2050 decarbonization goals – will need 4,000km of new lines in the coming years to expand the current network of roughly 30,000km.

In Chile, the private sector builds and operates power lines under indefinite concessions. 

In terms of the infrastructure deployment speed required, “the challenge is a big one,” Pardow told a transmission conference hosted jointly by Chile’s association of non-regulated electricity customers, Acenor, and the economic and social policy center of the Universidad Católica – Clapes UC

“Achieving the goal of 4,000km implies finding ways of doing things faster, at least the large transmission works,” Pardow said. “That’s perhaps the first challenge.”

Government and regulatory officials have already sat down to start analyzing transmission planning and exploring potential tweaks. 

Acenor executive director Javier Bustos cited the importance of achieving a grid expansion that is “cost-benefit positive” and good for the country as a whole. 

Transmission is a hot topic today in the local electricity sector, where growth in installed renewables capacity – as in many other countries – has outpaced expansion of grid infrastructure, creating problems such as price decoupling and electricity dumping.

The bulk of power lines in Chile are geared to a grid populated chiefly by conventional power stations, such as natural gas-fired plants, typically built close to offtake hubs. In contrast, renewables plants have mushroomed in zones distant from where much of their output is actually needed and sold. 

Some 590km of transmission infrastructure is being built and 683km is under environmental evaluation, according to a March project update published by the energy ministry. 

Last month, the energy ministry unveiled 10 short and medium-term measures under an initial second phase of its energy transition plan. These first measures fall under four main areas: energy storage promotion, supplier risk mitigation, operational flexibility, and policy and regulatory actions and urgent works.

One initiative to help streamline development involves tweaking rules governing the auction of projects to expand existing transmission infrastructure. Officials are preparing a bill under which property owners, that is, transmission firms, manage the tendering process rather than grid coordinator CEN.

Along with driving development of major trunk line projects, such as the HVDC Kimal-Lo Aguirre, which is due to enter service post-2030 and currently in the community consultation phase, officials must also spur smaller but important works, the conference was told.

“We also have a major challenge in providing the right incentives so that these small transmission works – they’re not actually small but they’re smaller than the others – permit our system to function better,” Pardow (pictured) said, adding that, in general, a lack of the right incentives was hampering sector investment and that the wider benefits to society of transmission works have not been sufficiently measured or evangelized.   

Referring to energy storage, Pardow citing the logic behind accelerated deployment of such systems. Storage systems are seen as part of the short and long-term solution, by allowing renewables plants to store energy during the daytime and inject during non-solar hours, in that way reducing transmission congestion risk and tapping higher spot prices.  

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