• 75 TWh Energy Demand
  • 24 GW Installed Capacity
  • 43 % Renewable Share

Chile

The Chilean national electricity market (CEN) represents nearly 95% of total demand and operates as a single market, with prices settled on an hourly basis at more than 2,000 nodal pricing locations across the country.

Electricity demand is served predominantly through long-term contracts, with shortfall or excess energy traded between distribution companies, large consumers and Independent Power Producers (IPP) in the spot market. Renewable generation, including hydro, provides roughly 40% of total generation.

Market Design

How is the market structured?

The Chilean electricity market includes three types of participant: generators, transmission operators and distributors, who are subject to different regulations regarding rights and obligations, operation and pricing. Generation is subject to market competition, while transmission and distribution are subject to price regulation.

Power plant dispatch is coordinated in the spot market by the system operator (Coordinador Eléctrico Nacional or CEN), in order to ensure reliability and the lower cost operation of the system. All regulated consumers are obligated to have supply contracts, which are balanced in the spot market to account for differences between energy produced and energy sold through supply contracts.

The market is comprised of four regions covering all of Chile: the North Interconnected System (SING) from Arica in the north to Antofagasta in the south; the Central Interconnected System (SIC) from Taltal to Quellón; the Aysén Electric System; and the Magallanes Electric System. The North and Central Interconnected Systems represent nearly 95% of demand and are managed by Coordinador Eléctrico Nacional (CEN) as a single market.

There are more than 1,000 individual pricing points in Chile across the four balancing regions. A majority of contracts are priced relative to locations near Santiago (Polaico node).

Large end-consumers (above 500 kW) can buy power directly from IPPs, due to open access to transmission and distribution facilities. There is no formal forward market to buy long-term power.

End consumers below 2 MW have regulated prices and are exclusively served by local distribution companies, which are required to enter into long-term contracts for 100% of their energy needs. Contracts are procured through competitive tenders led by the Comisión Nacional de Energía (CNE). Large end-consumers (above 500 kW) can buy power directly from IPPs, due to open access to transmission and distribution facilities.

System charges are predominantly paid by consumers. Tariffs for regulated end-users are composed of charges for transmission, sub-transmission and distribution. Material rate increases may be temporarily subsidized by the government.

Non-Conventional Renewable Energy (NCRE) attributes are certified by CEN, which is responsible for tracking obligations, injections and transfers of NCREs.

How are RECs (Renewable Energy Certificates) procured? NCRE attributes can be procured through either bundled contracts for energy and attributes, with NCRE-qualified power plants, or NCRE attributes can be procured separately. There is no transparent market where the NCREs are traded. Contracts for NCRE energy and/or attributes are negotiated through bilateral agreements.

Are renewable Power Purchase Agreements (PPAs) available? Yes

Are Green Tariffs available? Green Tariffs are not currently offered by the majority of distribution companies in Chile, specifically ENEL distribución, CGE, Chilquinta and SAESA, which cover nearly 90% of demand.

Regulators:

  • Comisión Nacional de Energía (CNE) – National Energy Commission
  • Superintendencia de Electricidad y Combustibles (SEC) – Superintendent of Electricity and Fuels

Key Government Departments:

  • Ministry of Environment
  • Ministry of Energy
  • Panel de Expertos –  expert panel on electrical services law
  • Tribunal de la Libre Competencia (TDLC) – the free competition court

System Operator:

  • Coordinador Eléctrico Nacional (CEN)
  • Total Capacity
  • Total Generation
Comisión Nacional de Energía, 2017

Total
Capacity
24 GW

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