# Integrated Country ApproachChile Chile has abundant renewable resources: the Atacama Desert, strong coastal winds and currents, and volcanic activity. Since the 2000’s, the Government of Chile (GoC) has pursued the objective of harnessing these resources and developing a sustainable and competitive energy sector. Supportive legislation, policies, programs and renewable energy (RE) institutions were founded from 2000 to 2020 to integrate more clean energy into Chile’s grid, reduce carbon emissions, and foster inclusivity in the energy market. [Navigate to Source](https://iea.blob.core.windows.net/assets/8c16efa0-41b1-47be-b12a-a29483a0c635/EnergyPoliciesBeyondIEACountriesChile2018Review.pdf) ## Power market liberalization Chile has developed a comprehensive legal framework to promote RE in its national energy mix. The nation has been a pioneer in liberalizing its power sector since the 1982 General Law of Electric Services, which enabled private investment in generation, transmission, and distribution, and laid the groundwork for a competitive energy market. In 2004, the “Short Law I” (Law 19940) facilitated non-discriminatory grid access, exempted RE producers under 9 MW from transmission fees, and provided reduced fees for those between 9 and 20 MW. The “Short Law II” (Law 20018) of 2005 enhanced the competitive conditions in generation activities by requiring electricity distribution companies to source power through non-discriminatory auctions.The structuring of a liberalized market has been accompanied by multiple actions to steer investment towards RE. The Non-Conventional Renewable Energy Law (Law 20.257) of 2008 introduced annual RE electricity generation quotas which came into force in 2010. The law was later amended by the 2013 "20/25 Law" which mandates a 20% RE market share by 2025. While generation companies that do not comply with the renewable quota are fined approximately USD 27 for each deficient renewable MWh, the law introduced public auctions for years when it is anticipated that the renewable electricity quota would not be fulfilled. The Net Billing Law of 2014 (Law 20.517) also allowed individuals to sell surplus energy back to the grid at a regulated price. That same year, Chile enacted South America’s first climate pollution tax, imposing a USD 5/tonneCO2 yearly tax on emissions from >50MW power plants (except biomass), thus further incentivizing the transition to renewables. ## Power market governance Until 2010, energy policy responsibility was fragmented across several entities in Chile, primarily between the Ministry of Mining and the Ministry of Economy. During that year, the Ministry of Energy (ME) was established, and has since been responsible for the legal framework, strategies, and action plans structuring Chile’s energy sector. It also sets tariffs, grants electricity concessions, and oversees key RE regulatory agencies: the National Energy Commission (CNE), Superintendent of Electricity and Fuels (SEC), and the Chilean Nuclear Energy Commission.The Chilean Agency for Sustainable Energy acts as a non-profit public-private foundation promoting RE and energy efficiency through programs and projects in industry, mining, transport, residential, commercial and education sectors. ## Incentives for clean energy infrastructure In 2001, the launch by the CNE of the Program for Rural Electrification with Renewable Energy (CHI/00/G32) acted as a strong signal to investors, positively contrasting with the focus on traditional grid extension and diesel/gasoline generation which had prevailed up until then. Using private and public funding, the program aimed to promote RE in rural areas through activities that reduce Greenhouse Gas (GHG) emissions. By the time of its conclusion, in 2012, the CHI/00/G32 had developed pilot projects, installed 6,000+ PV systems, implemented capacity building programs for small businesses, and issued 44+ standards for solar PV, micro-wind, micro-hydro and hybrid systems.Building on this progress, the 2009 Rural and Social Energy (PERYS) program expanded energy provision for public services and productive uses, especially in isolated areas, prioritizing solar, hydro, and wind energy. PERYS facilitated the design, financing, and R&D of small-scale energy projects, providing training for project development and operations. By 2014, funding had reached USD 2.4 million.The national plan for PV pumping, launched by the Ministry of Agriculture in 2012, provided subsidies of up to 90% for installation costs to farmers, promoting agricultural RE use. Additionally, the 2014 Energy Access Fund pilot program introduced three grant funds for RE system installation, local capacity building, and innovative technical solutions to meet small-scale energy needs. The Ministry of Agriculture dedicated USD 2.2 million to co-finance RE projects for productive uses in agriculture and forestry. These programs integrated RE into rural electrification, enhanced energy access, and promoted long-term RE development. ## Long-term RE and grid planification In 2014, the ME proposed the Energy Agenda 2014-18 (EA), which set out priority short- and medium-term measures for RE development. Key objectives included a new role of the state in energy development, reducing energy prices, energy market diversification, developing energy infrastructure, and citizen participation. Following this prioritization, the government established the National Energy Policy 2050 (NEP) in 2015, outlining Chile’s strategic vision for energy development up to 2050. Together, the NEP and EA yielded a comprehensive consultative committee, thematic roundtables, societal engagement, and national energy workshops, laying the groundwork for the NEP to establish 4 pillars for a sustainable energy market. Each pillar set goals for years 2035 and 2050 and the relevant action plans to achieve them, such as a minimum of 60% of electricity to be generated from RE by 2035. In parallel, the ME established Chile’s long-term energy planning (PELP) under the Transmission Law (Law 20.936). The PELP projects the country's energy future in a 30-year horizon through scenarios for multiple RE and non-RE types, updated every 5 years, and guides by legal mandate the development of the transmission grid.Since then, in 2022, the NEP was updated, ensuring that it continues to be a systematized, validated and relevant guide for public action in this area. This new NEP emphasized the opportunity for the energy sector to be a protagonist in climate action, and established the basis for a sustainable energy transition, with an increased ambition to reach 100% zero-emission electricity generation by 2050, and a share of 80% of renewables in generation by 2030.Beyond traditional solar and wind, Chile provided technology-specific support and regulations for diverse RE types. This includes Law 19657 on Geothermal Energy Concessions, which provides a regulatory framework for geothermal exploration and development. Chile’s National Marine Energy Centre undertakes tidal energy research and exploration, whilst copper production proceeds are used to fund green hydrogen production. Finally, the Transmission Law of 2016 was enacted to enhance the state’s role in energy planning, introduce non-discriminatory open access to the grid, and improve transmission grid interconnectivity. These laws form a robust framework promoting the integration and development of RE in Chile and creating an attractive environment for clean energy finance.In 2019, Chile was amongst the first nations to set a net-zero goal, later enshrined in its’ Climate Change Framework Law (“the Climate Act”) in 2022. Chile’s early commitment to achieve net-zero by 2050 signals an ambitious push for RE investment. That same year, a binding agreement (of voluntary origin) was signed between the government and companies that own coal-fired power plants, not to install new coal plants and to retire or repurpose all existing fleets by 2040.In 2020, Chile also launched its National Strategy on Green Hydrogen, followed by an Action Plan, published in 2024, that stablishes a roadmap with concrete actions for this decade. ## Bilateral agreements A long tradition of bilateral agreements (with Germany, Switzerland, the USA, the EU…) has provided conceptual and financial support for the development of renewable energy and methane capture programs in sectors such as electromobility, waste management, energy efficiency or energy storage, and contributed to accelerate the decarbonization of Chile’s energy matrix.Most notably, since 2019, the German-Chilean energy partnership created a high-level political dialogue forum to foster sustainable energy practices. The nations support each other through technical trainings, knowledge exchange, agreements, and funding programs. The Memorandum of Understanding for Green Hydrogen Exports, signed in 2021, created a cooperative framework to facilitate the development and export of Chilean RE hydrogen to Germany, with the Port of Hamburg as the primary hub for European distribution. The German government has provided USD 9.76 million for eFuels development under this initiative. In 2022, through the “Energy Challenge Germany” and "Energy Challenge Chile", both nations introduced innovative energy startups to each other's markets, supporting each other in market development and internationalization. This strong bilateral cooperation positions Chile as a leading RE developer and exporter. ## Promoting a fair and inclusive energy transition Chile also implemented various initiatives to develop a skilled, diverse and engaged workforce for RE development. The ME’s Division of Participation and Social Dialogue, created in 2014, aims to promote inclusive, transparent societal participation in energy policies, programs and projects, including indigenous voices. The public-private project “Energia+Mujer”, subsequently launched in 2018, serves to enhance female participation in Chile’s clean energy transition, providing opportunities for professional development such as technical skills workshops. ## Impact/Outcomes Over the years, the Chilean RE market has grown substantially, attracting over 50% of total renewable investment in Latin America and the Caribbean in 2015. Chile has consolidated a strong foundation on which to set ambitious targets, such as increasing the share of electricity from RE sources from 43% in 2015 to 80% by 2030, with 100% zero-emissions electricity generation by 2050. In 2021, Chile attracted USD 3.4 billion in renewable investment, and by 2022, RE accounted for 55.1% of Chile’s power generation. This rapid market growth positions Chile as a premier destination for RE investment. ## Additional Sources https://iea.blob.core.windows.net/assets/8c16efa0-41b1-47be-b12a-a29483a0c635/EnergyPoliciesBeyondIEACountriesChile2018Review.pdfhttps://mission-innovation.net/our-members/chile/investments/https://www.renewable-ei.org/en/activities/column/REupdate/20201224.phphttps://www.irena.org/-/media/Files/IRENA/Agency/Statistics/Statistical_Profiles/South%20America/Chile_South%20America_RE_SP.pdfhttps://www.huntonak.com/insights/legal/chilean-government-releases-its-green-hydrogen-action-plan-2023-2030https://iclg.com/practice-areas/renewable-energy-laws-and-regulations/chilehttps://climateactiontracker.org/countries/chile/2021-09-15/policies-action/https://www.irena.org/-/media/Files/IRENA/Agency/Publication/2015/IRENA_RE_Latin_America_Policies/IRENA_RE_Latin_America_Policies_2015_Country_Chile.pdf?la=en&hash=304E17839F669D9E62CD40C68391A31364F97892https://www.nortonrosefulbright.com/en/knowledge/publications/a130d46e/renewable-energy-in-latin-america-chilehttps://www.gefieo.org/sites/default/files/documents/projects/tes/843-terminal-evaluation.pdfhttps://www.iea.org/countries/chilehttps://energia.gob.cl/sites/default/files/documentos/pelp2023-2027_informe_preliminar.pdfhttps://www.iea.org/policies/17862-chiles-energiamujer-programmehttps://www.ren21.net/wp-content/uploads/2019/05/GSR2022_Fact_Sheet_Chile.pdfhttps://www.gob.cl/en/news/chile-and-germany-sign-deal-boost-green-hydrogen-production/https://www.minrel.gob.cl/news/chile-signs-agreement-with-germany-s-largest-port-for-green-hydrogenhttps://emagazin.bayern-innovativ.de/en/emagazine/detail/en/page/kick-off-energy-challenge-germany-2023https://energypartnership.cl/energy-partnership/highlights/energychallenge-chile-/-energy-challenge-germany/https://www.world-energy.org/article/4656.htmlhttps://www.iea.org/policies/4853-non-conventional-renewable-energy-law-law-20257https://energia.gob.cl/sites/default/files/documentos/green-hydrogen_action-plan.pdf ### Explore Case Studies from Chile Lorem ipsum dolor sit amet. 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