2025
Global Power Transmission Report
Regional Market Overviews
Chile
GDP (Current Prices) USD (2023) | 336 Bn |
Projected Average GDP Growth (2024-2028) | 2.4% |
10-year Govt Bond Yield (12-month rolling average) | 5.8% |
Country Credit Rating | A |
Renewable Energy Share | 38% |
Total Transmission Line Length (Km) | 38,784 |
Transmission Network
As of October 2024, Chile’s total transmission line network spanned 38,784 km, with most of these lines operating at voltage levels ranging from 66kV to 500kV (CEN, 2024). Chile’s transmission sector is largely privatized, with several private companies holding concessions to manage transmission lines and infrastructure. The Coordinador Eléctrico Nacional (CEN) is the primary body responsible for overseeing the operation of the national transmission system under the regulatory supervision of Comision Nacional de Energia (CNE).
Chile’s transmission system includes the National Transmission System (STN), Zonal Transmission Systems (STZ), and Dedicated Transmission Systems. The STN serves as the high-voltage backbone, interconnecting systems nationwide, while zonal systems provide local reliability for regulated customers. Dedicated systems cater to unregulated customers and support power injection from generators. As of 2023, 64% of Chile’s transmission lines operate at voltage levels of 220kV and above (CEN, 2024) (GLG, 2024).
Transmission Line Length
| Year | Line Length (circuit km) |
|---|---|
| 2019 | 35,501 |
| 2020 | 35,616 |
| 2021 | 36,318 |
| 2022 | 38,160 |
| 2023 | 37,353 |
| 2024 | 38,784 |
Note: Due to source data limitations, the line length data of 2023 and 2024 do not reflect the complete year. For 2023, it is as of May, while for 2024, it is as of October
Source: CEN
Cross-border Transmission Linkage
| Country Linkage | TSO | About the Linkage |
|---|---|---|
| Chile- Argentinak | CEN Transener (Argentina) | Known as InterAndes, 345kV transmission line of 409km between the Andes substation in Chile and the Cobos substation in Argentina with 80MW export capacity from Chile and 200MW import capacity from Argentina |
Source: AES Andes
Chile’s transmission network faces rising congestion levels due to modest capacity addition over the years. It is constrained in capacity to connect the renewable energy generation hubs, particularly in the northern regions, with major consumption centres like Santiago. This underscores the need for strategic investments and timely execution of the planned transmission projects, including those related to grid reinforcement (Lexology, 2023) (FYLD, 2024).
Chile’s only cross-border transmission link is with its neighbouring country, Argentina. It helps optimise its energy resources by enabling the export of surplus solar power generation and reducing dependence on fossil fuels during the phases of low demand or grid curtailment (AES Andes, 2022). There are active considerations underway to expand the interconnection capacity with other countries, such as Peru and Bolivia, to help grid stability and diversify energy resources. These efforts are part of a broader initiative aimed at building a larger regional and sub-regional interconnection system across Latin America (IDB, 2024).
Drivers in Energy Transition
Chile is progressing toward its 2050 carbon neutrality target, outlined in the Framework Law on Climate Change (2022), by prioritising renewable energy sources such as solar and wind. Through its Energy Transition Agenda, the country increased renewable capacity addition rate from an annual average of 0.9GW (2017– 2020) to 3.0GW (2021–2023), driven by solar and wind power (IRENA, 2024) (Gas Outlook, 2024).
Chile’s long-term energy planning document, Planificación Energética de Largo Plazo (PELP) 2023–2027 targets 34.8GW of wind, 32GW of solar PV, 7.8GW of concentrated solar power (CSP), and 6.6GW of storage by 2050, while excluding hydropower due to uncertainties arising from water scarcity. It also promotes green hydrogen to decarbonize the mining sector, addressing its high energy demands through indirect electrification aligning with Chile’s energy transition and decarbonisation goals (ReGlobal, 2022).
Note: In the above chart, the category ‘renewable’ includes biofuels, geothermal energy, solar PV, solar thermal and wind power
Source: IEA
The acceleration in renewable energy penetration is increasingly facing transmission bottlenecks. Often, the grid operator has been forced to curtail significant amounts of renewable energy. In July 2023, 8.9% of renewable generation was curtailed, which rose to 21.2% in December during the peak generation period. The rising mismatch between renewable power capacity and the transmission network prevents the power system from fully utilising the available renewable power generation resource base. With a rise in the renewable power capacity addition pipeline, it may become urgent to provision the necessary grid capacity (Gas Outlook, 2024).
Note: In the above chart, the category ‘renewable’ includes biofuels, geothermal energy, solar PV, solar thermal and wind power
Source: IEA
The decarbonisation process is also finding traction with the phase-out of conventional fuels in the energy mix. About 28 coal-based power plants, having a cumulative capacity of 5.5GW, are slated for a shutdown by 2040. By October 2024, 11 units (1.7GW) had already been retired, and by 2026, an additional nine units (2.2GW) are expected to be either retired or repurposed (Ministry of Energy, 2024). At the present rate, it is likely that the coal-fired power plants could be retired much ahead of the planned date. The gas-based power generation trend, in contrast, has been largely at the same levels. Between 2018 and 2023, it averaged a 17% share of the total power generation. This points to its critical role in grid stability, considering the rising challenges in integrating wind and solar power injection.
Planning for grid stability would also include the demand outlook. The CNE’s published timeline for energy auctions from 2025 to 2028 seeks 22,500 GWh for anticipated demand. The grid operator has pointed to potential supply shortages in 2027, with deficits from 2030 due to insufficient contracts. The auctions are aimed at accommodating the growing demand from sectors like mining and electromobility and ensuring reliable supply for distribution companies. (PV Magazine, 2024) (EMIS, 2024).
Policy Regulation
Chile’s electricity transmission revenues are regulated by the CNE, with the National and Zonal Transmission Systems classified as public services and funded by final customers based on construction and maintenance costs. The development of transmission lines uses an auction-based model managed by CEN to ensure efficiency. At the same time, dedicated systems operate through privately negotiated tolling agreements but maintain open access when capacity allows.
Transmission companies are compensated under the Value-Added Transmission Tariff (VATT), recalculated every four years by the CNE, which considers infrastructure costs, system demand, and a regulated return on investment. This framework supports efficient grid management, promotes private investment through competitive returns, and, at the same time, ensures universal electricity access (GLG, 2024) (C&P, 2024).
Additionally, the CNE reviews and approves the annual investments proposed by the CEN, which is responsible for drafting an Annual Transmission Expansion Proposal to outline its investment plans. This proposal includes a detailed list of all planned transmission projects for the year, covering both new developments and expansion works required to meet the country’s energy demands. If additional projects are needed beyond those initially targeted for the year, the proposal is supplemented with a reference investment value for the extra works. The Transmission Expansion Plan is compiled based on the actual works and investments confirmed for a given year (CEN, 2024).
The recently approved Energy Transition Bill aims to accelerate the network expansion rate through measures such as penalties for non- compliance in power purchase agreements and clarifying storage regulations. Additionally, the Ministry of Energy has initiated an “Open Season” mechanism to expedite the development of critical transmission system expansion projects. This process is designed to streamline the identification and approval of urgent works required to enhance grid capacity. Alongside, there is a thrust on grid modernisation by promoting major grid- enhancing technologies like dynamic line rating and real-time capacity optimisation (GLG, 2024) (C&P, 2024) (BN Americas, 2024).
Market Opportunity
During the period 2021-2025, there have been tenders for about 300 transmission projects worth $3.2 billion. This investment marks a sharp increase compared to the previous period of 2011-2019, where about $2.8 billion was allocated for transmission development. These high-voltage network projects are critical to supporting the growth of renewable energy, led by solar and wind power, besides helping augment the grid capacity for the rising power demand (Renewable Watch, 2021).
In its 2024 Transmission Expansion Plan, CEN proposed an investment of $1.004 billion, more than doubling the allocation from the previous year’s $464 million. The plan comprised 91 projects, divided into national and zonal transmission segments. The national transmission system had 13 projects, involving investment of $501 million, while the zonal system had 78 projects with a budget of $503 million. Notably, the high-voltage direct current projects, such as the 1,342 km long Kimal- Lo Aguirre line have been in evaluation but were excluded from the 2024 plan due to cost concerns (BNamericas, 2024) (CEN, 2024).
Additionally, CEN has outlined an energy storage expansion strategy for 2025-2032 to enhance grid reliability. The plan identifies the northern regions as optimal for storage facilities, given their proximity to renewable energy plants and mining activities. A recommended initial capacity of 2,000MW (equivalent to 13.2GWh) by 2026 requires an investment of $3.2 billion but is expected to save $500 million in operational costs and reduce energy cuts by 40% (PV Magazine, 2023).
Major Transmission Projects in Pipeline
| Project | Investment | Segment | Commissioning |
|---|---|---|---|
| The Noviciado 500/220kV and New Line 2x220kV The Novitiate – The Campino | $116.0M | National | 2033 |
| New 2x220kV Line Calama Nueva – Mirage | $45.7M | National | 2033 |
| New 2x220kV Line Sentinel – Kimal | $42.5M | National | 2031 |
| Increase in capacity of the 1x110kV Mejillones line – Tap Off Desalant | $22.5M | Zonal | 2030 |
| New 2x66kV Line Fuentecilla – Aldunate (1st row) | $21.7M | Zonal | 2031 |
| New Los Muermos 66/23kV substation and New 1x66kV Los Muermos line – Tineo | $21.6M | Zonal | 2030 |
Outlook
Chile’s planned transmission network expansion involves adding approximately 4,000 km of lines and over 6,000 MVA of substation capacity between 2022 and 2031 at voltage levels of 110kV and above. This includes ongoing, planned, and proposed projects (ReGlobal, 2022). The capacity plans must factor in the required levels necessary to support the upcoming renewable power generation investments. There are signs that the lag in transmission capacity is fueling a decoupling in the power market prices across geographies. Some renewable-focused companies are facing insolvency as a result (C&P, 2024).
The timeliness of the transmission project pipeline may need urgent attention. The projects are beset with persistent execution challenges and recurring delays. One key example is the $1.48 billion Kimal-Lo Aguirre line (Conexión Energía), Chile’s first HVDC project. It was intended to unlock 3GW of renewable capacity by 2029. It underwent multiple delays, setting a troubling precedent. Other projects are frequently stuck in procedural clearances. In April 2024, the environmental evaluation agency (SEA) rejected the permit for Celeo Redes’ $324 million Itahue-Hualqui transmission project (Gas Outlook, 2024).
To drive the growth of Chile’s transmission network, accelerated project development and stronger regulatory incentives are critical. There might be a case for policy intervention in the transmission planning and implementation process. Such a shift could help bring a much- needed push for a rapid grid network rollout (BN Americas, 2023).