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ENERGY TRANSITION AND RENEWABLES IN CHILE
Jaime Peralta
Vice President, Coordinador Eléctrico Nacional – CEN
February 2019, Quebec
www.coordinador.cl
Agenda
❑ About Chile
❑ National Electric System
❑ Energy Market Framework
❑ National Electric Coordinator (Chilean ISO)
❑ Renewable Energy (RE) in Chile
❑ Transmission Sector
❑ Challenges and Opportunities
www.coordinador.cl
ABOUT CHILE…
Chile is long and
narrow country
(4,270 km)
✓ Population: 17.6 millions
✓ Surface (continental): 755,915 km2
✓ GDP per capita: USD$ 15,900 (4,0% growth)
✓ Energy investment: USD$ 3.120 million (50%
RE)
✓ Highest solar radiation in the world
✓ Law 20698-2013 ➔ RE Target: 20% by 2025
✓ 2050 Energy Policy (2016) ➔ 70% RE by 2050
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ELECTRIC SYSTEM – 2018
• Installed Capacity: 24,487 MW
• Energy Generated: 76,526
GWh
• Peak Demand: 10,570 MW
• Energy growth: 3.1 %
• Transmission Lines: 33,000 km
National Grid
3,100 km
Hydro
Solar
Wind
Thermal
Thermal
0%
20%
40%
60%
80%
100%
Thermal Hydro Solar Wind Geothermal
Installed capacity MW Energy generated GWh
Energy & Capacity by Fuel Type
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• RE Generation = 13,342 GWh (17,4%) Total = 76,526 GWh
• RE Capacity = 4,829 MW (19,7%) Total = 24,487 MW
RENEWABLE ENERGY – 2018
Law 20,698 from 2013 ➔ Target: 20% RE by 2025
RE
20%
Coal
23%
Diesel
12%
LNG
19%
Hydro
27%
Installed Capacity
RE
17%
Coal
38%
Diesel
1%
LNG
15%
Hydro
28%
Energy
0%
10%
20%
30%
40%
50%
60%
Solar Wind Small Hydro Biomass Geothermal
Energy Capacity
Renewable Resources Energy Installed Capacity
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ENERGY INSTITUTIONAL FRAMEWORK
National Electric
Coordinator – NEC
(Chilean ISO)
National Energy
Commission
(CNE)
Fuels & Electricity
Superintendency
(SEC)
• Regulatory body
• Set regulated rates
• Energy Tenders
Generation
Companies Transmission
Companies
Distribution &
Large
Customers
• Sanctioning body
• Interprets regulations
• Oversights norms compliance
Ministry of
Energy
Other organizations:
• Panel of Experts
• National Economic
Prosecution Office
(FNE)
• Transparency Counsel
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Independent technical organization in charge of the operation of
the national grid and the energy market
✓ Responsible for ensuring a secure, reliable and economic energy supply,
and guaranteeing open access to the transmission systems
✓ Annual budget around US$ 50 Million (US$/MWh 0.65) and 300
employees
✓ Main functions:
✓ Secure, reliable and economic system operation
✓ Wholesale energy, capacity & ancillary service markets
✓ Long-term planning for transmission expansions & International
bidding process for transmission projects
✓ Open access (project interconnection process)
NATIONAL ELECTRIC COORDINATOR (Chilean ISO)
www.coordinador.cl
WHOLESALE ENERGY, CAPACITY
& AS MARKETS
• Competitive bids
• Fix charge to the
demand
National Electric
Coordinator
Generator
B
Distribution
(Regulated)
Long-term
Forward
Contracts
Generator A
Large
Customers
>500kW
Bilateral
Contracts
Transmission
(Open
Access)
LMP
Pricing
LMP
Pricing
• Day-ahead economic dispatch (based on declared variable cost ➔ LMP)
• NEC manages energy and capacity balances and settlements
• Competitive long-term energy tenders for regulated customers led by CNE
• Ancillary services will transition from cost-based to auction-based market
• 410 market participants (G, T, D & Large Customers)
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MARGINAL COST (LMP) – Monthly Average
0
50
100
150
200
250
300en
e
mar
may ju
l
sep
t
no
v
ene
mar
may ju
l
sep
t
no
v
ene
mar
may ju
l
sep
t
no
v
ene
mar
may ju
l
sep
t
no
v
ene
mar
may ju
l
sep
t
no
v
ene
mar
may ju
l
sep
t
no
v
2013 2014 2015 2016 2017 2018
USD/MWh
Crucero 220 kV Quillota 220 kV
ENERGY TENDERS - Regulated Customers
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RE Awarded:2015/16 ➔ 52%2017 ➔ 100%
52.9 54.559.8
65.8
104.3
90.0
99.5
90.3
129.5
138.9
128.9
112.0108.2
79.3
47.6 32.5
0.0
20.0
40.0
60.0
80.0
100.0
120.0
140.0
160.0
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
N°1 N°2 N°3 N°4 N°1 N°2 N°3 N°4 N°1 N°1 N°2 N°1 N°2 N°1 N°2 N°1
2006/2007 2008 2010 2012 2013 2015/2016 2017
Average Bid Awarded Price
Awarded Energy GWh/Año Awarded Price USD/MWh
[GWh/Año] [USD/MWh]
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PROJECTS UNDER CONSTRUCTION TO 2020
Project: Cerro Dominador CSP
Technology: (First) Concentrated Solar
Region: Antofagasta
Capacity: 110 MW
ISD: 2020
SMALL HYDRO 3.6%
78 MW
WIND 24.7%
539 MW
SOLAR 16.5%
361 MW
TOTAL 2,183 MW
RENEWABLES 44.8%
978 MW
OTHERS 55.2%
1,205 MW
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RENEWABLE ENERGY POTENTIAL
Chile has significant RE resources:
• 2,000 GW of wind, solar and hydro
capacity.
• 4,000 MW of geothermal and
biomass capacity.
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MAIN ACTORS IN THE RE MARKET
0 200 400 600 800 1,000 1,200 1,400 1,600 1,800 2,000
Others
Etrion Corp
Pacific Hydro S.A.
SOWITEC Energías Renovables
EDF Energies
D'E Capital
SunPower Corporation SpA
EPM
Ibereólica Chile
Fisrt Solar
Ingenostrum Chile SpA
SunEdison
Energy Focus S.A.
Pattern Energy
Acciona Energía Chile
Enel Green Power Chile
Solar Wind Small Hydro Thermal Geothermal[MW]
Installed Capacity
4,829 MW
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TRANSMISSION SECTOR
• Three segments: National, Zonal and Dedicated
• Centralized planning for National/Zonal (by CNE)
• System expansions based on a competitive
bidding process (by NEC)
• 2018 expansion plan ➔ USD 1,400 million (First
HVDC project)
Dedicated
National System
(500kV & 220kV Bulk Transmission)
Zonal
(Sub-transmission)
Dedicated
Zonal
(Sub-transmission)
Dedicated
Dedicated
Distributors
Generators
DistributorsConsumers
Consumers
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✓ Integration of high levels of variable renewable energy (flexibility)
✓ New auction-based markets for ancillary services
✓ Develop RE workforce (4,000 jobs by 2030)
✓ Permitting, environmental, and social issues (PMO, ROW Studies, state land bids)
✓ Dry hydrology scenarios and voluntary decarbonization commitments
✓ Transmission congestion (First HVDC project)
✓ Natural disasters (earthquakes, tsunamis, volcanos, wildfires, flooding)
SOME CHALLENGES…
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INVESTMENT OPPORTUNITIES
✓ Renewable Energy Generation
✓ CSP Technology (Base capacity)
✓ Energy Storage Systems (BESS, Pump storage)
✓ Ancillary Services (New auction-based market)
✓ Transmission Expansions (Developers and EPC contractors)
✓ Regional Interconnections (Peru, Argentina)
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ENERGY TRANSITION AND RENEWABLES IN CHILE
Jaime Peralta
Vice President, Coordinador Eléctrico Nacional – CEN
February 2019, Quebec
THANKS FOR
YOUR ATTENTION
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