This is a best prospect industry sector for this country. Includes a market overview and trade data.
Last Published: 10/24/2018
Overview
Chile’s electricity sector, which includes generation, transmission, and distribution, is privately owned and operated by both foreign and local companies. The country’s total installed capacity is approximately 24 gigawatts (GW). On average, electricity demand for the next four years will grow at approximately 3-4% per year. The average annual projected power demand is within 500-800 megawatts (MW).

In November 2017, the Chilean Ministry of Energy announced that in the tender for the Supply of Power, the average price of power for the awarded contract was $32.5 per megawatt hour (MWh). In May 2018, the average marginal cost of energy at the Crucero node in the SEN Norte was $56.7/MWh down from $104 MWh in 2008 and up from $37 MWh in 2015.
 
In November 2017, Chile completed a landmark $700 million interconnection of its Northern electrical grid, or “Sistema Interconectado del Norte Grande” (SING), with its Central Grid, or Sistema Interconectado Central” (SIC). This integration resulted in the National Electric System (Sistema Eléctrico Nacional, or SEN), which has an installed capacity of 24,000 MW and serves more than 97% of Chileans. The country has two smaller, independent grids in the extreme southern regions: the Magellan grid, or “Sistema Eléctrico de Magallanes” (SEM), with approximately 100 MW; and the “Sistema Eléctrico de Aysen” with approximately 110 MW of installed capacity.
 
According to the Chilean Chamber of Construction, private investment in the overall energy sector for 2016-2025 period is expected to total $11.6 billion, with a sector breakdown as follows: generation ($9.1 billion), transmission ($567 million), and distribution ($1.9 billion).

Chile’s natural resources allow for power production from numerous energy sources, including solar, geothermal, wind, hydro run-of-river, biomass, and biofuels. As of July 2018, according to ACERA (National Association of Renewable Energy Companies), current electricity generated from renewable sources is 15%. Law 20.698, also known as Law 20/25, modifies law 20.257, Chile’s Non-Conventional Renewable Energy Law.  Law 20/25 requires that companies with more than 200 MW of installed capacity generate 20% of electricity from renewable sources by 2025.
 
Chile’s pursuit of renewable energy has been reinforced by the Piñera Administration. In May 2018, President Piñera and Energy Minister Susana Jiménez presented “Chile's Energy Roadmap,” a four-year plan that identifies seven strategic areas for energy sector: energy modernization, social approval, energy development, low emissions, sustainable transport, energy efficiency, energy education, and training. This roadmap further specifies ten "core commitments," which include: expansion of electric vehicles and small-scale renewable generation (less than 300KW), energy vulnerability mapping, modification of the power distribution law, regulation of firewood (which is a main heat source for many Chileans, especially outside of Santiago), 25% reduction of the environmental assessment period for energy projects, preparation of a timetable for the withdrawal or reconversion of coal-fired plants, electromobility, modernization of the electricity regulatory institutional framework, training of 6,000 technical and professional operators, establishment of a regulatory framework that incentivizes efficient use of energy in energy intensive sectors like industry, mining, transport, and others.

Law 20.571 promotes power generation by residential owners with installed capacity of up to 100 Kilowatts.  The current administration is proposing legislation seeking to increase this capacity to 300 Kilowatts.
 2015201620172018 estimated
Total Local Production148150175198
Total Exports68605762
Total Imports1,2321,1731,3701,574
Imports from the US156186100104
Total Market Size (*)1,3021,2631,4881,710
Exchange Rates: 1 USD654677649640
(total market size = (total local production + imports) - exports)
Units: Millions of USD
Source: Chilean Customs Data, industry experts and internal calculations. (*) December average.

Leading Sub-Sectors
Generation
  • Hydro-generation plants:
    • < 20 MW (Those under 9 MW have become increasingly attractive)
    • 20 MW - 70 MW
  • Clean coal abatement technology
  • Combined-cycle gas fired plants and support systems
  • Dual gas/diesel fired plants
  • Geothermal exploration services and plants
  • Wind generation plants: >0.3 MW - 10 MW, horizontal, variable speed, pitch reg., >50 meters mast turbine
  • Solar panels for water heating
  • Solar PV panels and CSP systems. In the mining sector, turn-key projects dominate.
  • NOx, particle and CO2 abatement equipment
  • Scrubbers, fumes treatment technology and equipment.
 
Transmission
  • High efficiency transmission equipment and supplies, aimed to transfer electric energy >1,000 miles
  • Environmental solution services
 
Distribution
  • Electric control instruments
  • High efficiency transformers
  • Signal conditioners
 
Opportunities
Export opportunities for parts and equipment in electric generation, transmission, and distribution will come from average expected investments of over $9 billion for the next seven years. Investment opportunities for large projects exist in this market, with numerous U.S. firms invested in renewable and conventional energy generation. In fact, a bilateral framework to strengthen infrastructure investment and energy cooperation between the U.S. and Chile was signed in Washington, D.C., in September 2018. However, potential energy investors should bear in mind that environmental approvals are rigorous and can take numerous years, thus presenting significant hurdle for both energy and mining projects in Chile.

Feria ExpoERNC 2018 is an exhibition of the renewable energy industry in Chile.  The show brings together leading players in the generation, transmission, distribution, and renewable energy sub-sectors, as well as sustainable production companies service providers for the energy and mining industry.  The event, sponsored by Chile’s Association of Renewable Energy Companies, will take place in Santiago from November 23-25, 2018.

Web Resources

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Chile Energy Trade Development and Promotion