Chile has emerged as a world-class destination for solar and wind energy developers, according to the International Energy Agency’s latest review of the country’s energy policies.
Chile's energy sector has been evolving dynamically in recent years and significant institutional and policy reforms as well as major infrastructure projects have been carried out. The country's National Energy Policy 2050 was adopted in 2015, following an inclusive public consultation. The electricity sector, in particular, has developed quickly.
The IEA's report found that new legislation has encouraged investment in generating capacity across the electricity sector. The enhanced role of the state in effective energy planning has helped boost project development, especially in electricity transmission. The country now also has an interconnected national electricity system.
"By exploiting its vast renewable energy potential, Chile can help reduce electricity prices and dependence on fuel imports – without subsidies," said Paul Simons, the IEA deputy executive director. "Renewables and energy efficiency can also help limit carbon emissions and air pollution."
Chile's prospects for exploiting its potential for solar and wind energy are bright, thanks to a significant fall in the cost of the technologies, but also by enabling policies, such as technology-neutral tenders for electricity supply. "These tenders are driving investment in green, affordable electricity, and increasing competition," said Mr Simons. "It's looking like a win-win."

The IEA report finds that to better integrate these variable energy sources successfully will require additional investments in grids, storage and flexible capacity, as well as a smart-system design. The government should now ensure that electricity market design and infrastructure facilitate the value-maximising integration of solar and wind power. The IEA also suggests additional incentives for innovation and competition in the electricity distribution sector.
Beyond electricity, the report suggests the government could strengthen energy efficiency policy. Chile should make more use of mandatory energy performance standards for products, equipment, vehicles and buildings. This would help increase energy security and also limit air pollution and carbon dioxide emissions in a cost-effective way.

A free copy of the IEA report ‘Energy policies beyond IEA countries – Chile 2018’ can be downloaded from the IEA bookshop.