Chile's PMGD distributed generation segment: The state of play

Chile’s PMGD distributed generation segment has been growing rapidly and could surpass the milestone of 2GW of installed capacity this year if the pace of construction accelerates. 

Regulatory authorities received a flurry of construction declaration requests in recent weeks as developers raced to hit an April 8 deadline in order to remain in the country’s stabilized price regime before changes go into effect.

National energy commission CNE said earlier this month that it had a portfolio of around 350 requests for construction launch declarations to process.

PMGD plants, which are up to 9MW in capacity and grid-connected, are becoming increasingly important in the Chilean power grid.

The bulk of Chile’s 440-plus PMGD plants, by installed capacity, are in the central zone of the country. Developers are chiefly focused on this part of the country, even though project land is generally more expensive and less abundant and sun-drenched than in the north. Plants in the central zone are generally closer to demand centers and tend to require less interconnection outlay than those in the north, and can usually be developed more quickly. 

The sector is proving attractive to investors and financiers. Recent transactions include the sale of a portfolio of 15 projects and a project finance deal for a batch of 24 initiatives. 

CHILE’S PMGD PARK BY TECHNOLOGY

Overall PMGD installed capacity stands at 1,706MW, according to a March report from CEN. Solar plants account for 71%, thermoelectric 16%, mini-hydroelectric 10% and wind 3%.

Capacity stood at 277MW in 2015 and growth accelerated apace in 2019. More than 320MW has been added annually over the past three years.

In the first quarter of 2022, 27MW was added. More than 800MW is in the permitting phase, according to industry estimates. 

Chile's overall installed generation capacity is around 32,400MW.

CHILE’S PMGD PARK BY REGION

Santiago Metropolitan, O’Higgins, Maule and Ñuble regions – and parts of Valparaíso and Biobío regions – are typically considered the constituent parts of the central zone.

Arica and Parinacota: 1MW
Tarapacá: 43MW
Antofagasta: 36MW
Atacama: 59MW
Coquimbo: 146MW
Valparaíso: 224MW
Santiago Metropolitan: 277MW
O'Higgins: 285MW
Maule: 230MW
Ñuble: 104MW
Biobió: 141MW
La Araucania: 53MW
Los Ríos: 31MW
Los Lagos: 76MW