The electricity sector in Chile relies mainly on hydro-electric power generation (33% of installed capacity as of May, 2012), oil (13%), gas (30%) and coal (20%). Wind has a small but growing presence with 198 MW. Faced with natural gas shortages that have the potential to jeopardize electricity supply, Chile is currently building its first LNG terminal to secure a supply for its existing and upcoming gas-fired thermal plants. In addition, it has engaged in the construction of several new hydropower and coal-fired thermal plants.

Chile’s successful electricity sector reform, which served as a model for other countries, was carried out in the first half of the 1980s. Vertical and horizontal unbundling of generation, transmission and distribution and large scale privatization led to soaring private investment. However, in recent years, there has been a substantial modification of the 1982 Electricity Act, to bring it line with developments of the last 20 years in the sector. This was the result of a pressing need to change.

The main companies involved, in terms of installed capacity, are the following:

  • ENDESA (35%, 6085 MW)
  • AES Gener (18%, 3157 MW)
  • Colbún S.A. (15%, 2621 MW)
  • Suez Energy Andino (12%, 2176 MW)
  • E.E. Guacolda (3%, 610 MW)
  • Pacific Hydro (3%, 551 MW)

A number of other companies account for the remaining 14% (2418 MW).

Since the introduction of the so-called “short law II”, investments in generation have risen greatly. Currently, there are generation projects amounting to over 26,000 MW, in different stages of development. In 2013, Total S.A. announced the world’s largest unsubsidized solar farm would be installed with assistance from SunPower Corp into Chile’s Atacama desert.

Renewable energy and energy efficiency

Renewable energy in Chile is classified as Conventional and Non Conventional Renewable Energy (NCRE)[1], and includes biomass, hydro-power, geothermal, wind and solar among other energy sources. Most of the time, when referring to Renewable Energy in Chile, it will be the Non Conventional kind.

Chile has considerable geothermal, solar and wind energy resources while fossil fuel resources are limited. In 2016 Non Conventional Renewable Energy provided 7,794 GWh, or 11.4% of the country’s total electricity generation. NCRE accounted for 17.2% of the installed electricity generation capacity by the end of 2016.