In 2019, the Chilean government unveiled a key milestone in the energy sector: a plan for the gradual withdrawal of more than 5,300MW in installed coal capacity in Chile, which will be replaced mostly with NCRE. It is an ambitious plan that, in addition to the challenge it implies for all players, will require significant investment in both generation and transmission.
The government has said that by 2040 – when all coal-fired plants must be closed according to the plan – the investment will amount to between USD 13bn and USD 25bn in new generation capacity alone. The difference is explained by the forecasting of demand: in a scenario of greater growth, the investment will be at the top of the range and vice versa. But, if the investment that will be required in transmission is added, the costs could increase by between 10% and 20%. This means the total investment would vary between USD 15bn and USD 30bn.
The development of NCRE in the country has faced several problems due to a lack of transmission capacity. However, in June of this year, and thanks to an investment of more than USD 1bn, the “Cardones-Polpaico” electrical transmission line was introduced. This line improves the country's energy security, advances the decarbonisation of the matrix, and completes the interconnection of the National Electrical Power Grid, thereby enabling the large-scale entry of renewable energies into the energy matrix.
Specifically, this line would allow about 1,300MW of NCRE to be transferred from north to south. In addition, the line will feed the demand of around 5.7 million homes with green energy. Every hour of solar energy prevents nearly 1,430 tonnes of CO2 from being emitted. The line also avoids the problem of the decoupling of marginal costs due to transmission restrictions.