Chile’s power sector has always been able to adapt quickly to the various energy challenges it has faced in the past. It was able to seamlessly transition from a hydro-heavy generation mix to a hydro-thermal mix. And now, it is gearing up to face a new challenge, that of incorporating large amounts of renewable energies as the country looks to retire its coal-based power plants by 2040 and achieve carbon neutrality by 2050.

The path to carbon neutrality is a challenging one that requires the coordination of various sectors and a common, long-term vision. Recognising this, the Ministry of Energy has proposed six key measures, namely, creating sustainable industries, developing hydrogen green, promoting electro mobility, making buildings sustainable, retiring coal-fired plants and improving energy efficiency, to help achieve carbon neutrality by 2050.

Chile has an enormous renewable energy (RE) potential of 1,749 GW, a capacity that is at least 70 times that of the current electrical capacity of the Sistema Eléctrico Nacional (SEN) or the National Electric System. Given the unexploited potential and the declining costs of RE plants, replacing coal with the latter will be key to achieving carbon neutrality. The target is to increase the share of RE-based installed capacity from its current 51 per cent share to 70 per cent by 2030, and 90 per cent by 2050. However, efficiently replacing coal, which currently accounts for almost 40 per cent of the electricity generation, with RE will require building a more robust and modern electricity transmission infrastructure and making the electrical system more flexible.

In line, significant investments in the country’s high voltage network are envisaged. Chile’s national electricity system coordinator, Coordinador Eléctrico Nacional (CEN), has plans to tender close to 300 new transmission projects over the next five years (2021–25) worth USD3,200 million—an amount significantly higher than the investment during the 2011–19 period, which totalled USD2,800 million.

Electricity sector overview

Chile was one of the early adopters of electricity sector reforms and began to privatise its electricity sector in the 1980s. Since then, it has become a model to follow for most other countries in Latin America. The electricity generation, transmission and distribution sectors are now completely owned by private companies. The state has only a surveillance role and regulatory powers, especially over the determination of certain tariffs.

The national grid comprises the Sistema Interconectado Central (SIC), the Sistema Interconectado del Norte Grande (SING), the Aysen electric system (including Port Aysen and Coyhaique), and the Magallanes electric system (including Punta Arenas, Port Porvenir and Port Natales). It is coordinated by the national system coordinator, CEN. In 2017, SIC and SING were connected via a 500 kV transmission line and the system now functions as the SEN.

The national energy commission, Comision Nacional de Energia (CNE), is the country’s energy sector regulator and works under the Ministry of Energy.

As of 2020, the country had an installed generation capacity of 26.3 GW, of which 51 per cent was based on thermal sources, 26 per cent on hydro, 14 per cent on solar and 10 per cent on wind. The share of RE (including hydro) increased from 40 per cent in 2015 to 51 per cent in 2020, mainly driven by additions in wind and solar generation.

Figure 1: Growth Chile’s in installed capacity (MW)
Source: Coordinador Eléctrico Nacional

Figure 2: Chile’s installed capacity by fuel in 2020 (%)
Source: Coordinador Eléctrico Nacional

Chile’s high voltage grid currently comprises 35,919 km of lines and 1,094 substations with 95,981 MVA of transformer capacity. The majority—47 per cent—of the grid network operates at the 220 kV level.

Transelec, CGE, Engie, Interchile, Colbun Transmission, Minera Escondida and AES Gener are some of the main transmission companies in Chile. Transelec, which was formed in 1993 after the restructuring of Chile’s National Electricity Company ENDESA, operates the largest share (27 per cent) of the transmission network.

Figure 3: Chile’s transmission line length by voltage in 2020 (%)
Source: Coordinador Eléctrico Nacional

Figure 4: Line length of key transmission players in 2020 (km)
Source: Coordinador Eléctrico Nacional

Future plans and investments

As per the Ministry of Energy’s updated report 2020 for the Planificación Energética de Largo Plazo (PELP) 2018–22 or the Long-term Energy Plan 2018–22, around 1,731 MW of existing coal-based power plants will be retired during 2019–24. In each of the five scenarios considered for the 2020-50 horizon under PELP, the first half of the period (2020–35) witnesses strong solar and wind investment, the withdrawal of majority of the coal-fired generating plants and the incorporation of storage into the network. While in the second half of the period (2035-50), renewable technologies begin to be incorporated to complement the management of variable renewable energies such as storage and solar power concentration. Chile’s installed capacity is expected to range between 50 GW and 78 GW (depending on the scenario) in 2050, almost all of which will be based on renewable energy sources.

The future Chilean grid must be robust, modern and capable of accommodating the large-scale RE capacity that is planned to be added to help the country transition to a carbon-neutral economy. In accordance with the provisions of Law No. 20,936 / 2016, CEN is required to develop a transmission plan on an annual basis. This transmission expansion proposal is formulated based on a planning study, which considers the projected demand over a 20-year horizon, along with various generation supply scenarios developed through investment optimisation models based on the Ministry of Energy’s PELP. Based on the recently issued/proposed transmission expansion plans, CEN is expected to tender out around 300 projects for new transmission construction worth USD3,200 million over the next five years.

Figure 5: Planned projects and investments in Chile’s transmission sector
Source: Coordinador Eléctrico Nacional; Global Transmission Research

Currently, 31 national and zonal transmission projects aggregating 652 km of line length are under construction in the country. These projects represent USD634 million in investments, of which 64 per cent relates to transmission line projects and 36 per cent to substation projects. The most significant projects under construction include the 220 kV Lo Aguirre–Alto­–Melipilla Rapel (125 km) and the 500 kV Pichirropulli–Tineo (142 km) line projects.

In addition, 36 transmission projects worth USD1,191 million are at various stages of environmental approval. Of the 36 projects, 4 projects (USD39 millions and 37 km) were recently admitted for processing to the Sistema de Evaluación de Impacto Ambiental (SEIA) or the Environmental Impact Assessment System; 30 projects nation-wide representing 1,015 km of lines and an investment of USD1,006 million were under clarification with the Servicio de Evaluación Ambiental (SEA); and 2 projects comprising 269 km of line worth USD146 million were given environmental approval in March 2021.

The main transmission works currently in qualification in the SEIA both in investment terms and in line length are located in the Antofagasta region. However, the largest investment under environmental approval is related to inter-regional works, namely, the Itahue substation–Hualqui substation line and the new 2×220 Nueva Alto Melipilla–Nueva Casablanca La Pólvora–Agua Santa line.

A key project currently in the tendering stage is the Kimal–Lo Aquirre high voltage direct current (HVDC) project, valued at USD1,480 million. The project is part of the Annual Transmission Expansion Plan for SEN for 2018. It entails the construction of a 1,500-km-long HVDC line of ±600 kV between the Kimal and Lo Aguirre converter substations, with the transmission capacity of each end being at least 2,000 MW. The developer is expected to be selected in October 2021 with construction expected to start from January 2022 and end by December 2028.

The project is expected to provide significant social benefits by allowing the greater integration of RE into the grid, meeting the increase in electricity consumption, helping replace coal-based power plants and strengthening the electrical transmission network. It is estimated that the project will imply a net social benefit to value present close to 30 per cent of the investment value of the work.

Annual Transmission Plan 2020

Recently in April 2021, CNE issued the Final Technical Report of the Annual Transmission Expansion Plan for the SEN corresponding to 2020 (Técnico Final Plan De Expansión Anual De Transmisión Año 2020). The plan entails a total of 46 grid projects (national and zonal) involving an investment of USD511 million. The selected projects aim at strengthening the zonal transmission systems of the cities located in the south-central part of the country. Construction of the projects identified in the plan is expected to begin from the second half of 2023.

A total of 14 national projects–12 extensions of existing facilities and 2 new works­–have been identified in the 2020 plan. These projects represent an investment of USD 320 million (USD202 million for extension works and USD118 million for new works).

A key national project under the plan is the Seccionadora Nueva Lagunas substation and the 2×500 kV Nueva Lagunas–Kimal line project with an investment value of USD194 million. The project entails the construction of a new sectioning substation, called Nueva Lagunas, by sectioning the 2×220 kV Tarapacá–Lagunas line, to be located in the vicinity of the current Lagunas substation. The project involves the installation of a bank of 500/220 kV 750 MVA autotransformers and connection of the Nueva Lagunas to the Kimal substation.

With respect to the zonal transmission systems, a total of 32 expansion works are included, representing an investment of USD192 million. Of the 32 projects, 25 works are extensions of existing facilities, for an amount of approximately USD82 million, and 7 correspond to new works, for a total of approximately USD 110 million.

Some of the new works to be undertaken in the zonal transmission systems include the Seccionadora Llepu substation and 2×154 kV Llepu–Linares line project (investment value of USD26.6 million); the Seccionadora Totihue substation and 2×66 kV Totihue–Rosario line project (USD20.5 million); and the 2×220 kV Don Goyo–La Ruca line (USD21.8 million).

Preliminary Annual Transmission 2021 Plan

Earlier in January 2021, CEN published the Preliminary Transmission Expansion Plan 2021 (Propuesta de Expansión de La Transmisión 2021), kick-starting the transmission planning process for the year. The proposal contains 128 projects totalling an investment of US717 million.

Of the 128 projects, 15 projects—valued at USD415 million—will be focused on expanding the national transmission system, while 113 projects—valued at USD302 million—are smaller regional transmission projects.

A key project identified for the national transmission system is the expansion of the Kimal substation, which will allow for the connection of the Lo Aguirre–Kimal HVDC line (currently in the tendering stage). Other works include the project to increase the capacity of the 2×500 kV Ancoa–Alto Jahuel circuits 1 and 2 (investment value of USD158 million) and replacement of series compensators for the 4×500 kV Ancoa–Alto Jahuel line at the Ancoa substation (USD87.5 million) to address the congestion in section 4×500 kV Ancoa–Alto Jahuel line.

Among the projects for the development of zonal transmission systems, new substations and transmission lines stand out, together with increases in transformation capacity and standardisation in various substations, and increases in transmission line capacity, ranging from the Antofagasta area to Chiloé. Key proposed projects for the zonal transmission system include the Seccionadora Itata substation (USD8.3 million), and the 2×66 kV Dichato–Nueva Seccionadora Quinchimalí line (USD11 million) for improving the N-1 security and long-term sufficiency to the south and south-west of the Ñuble Region; and the Seccionadora Nueva Ancoa substation (USD19.5 million) and 2×220 kV Nueva Ancoa–Linares line (USD14.7 million) to address overload issues at 154 kV between Maule and Linares regions.

As part of the second stage for the finalisation of the 2021 plan, CNE has invited transmission companies to submit the proposals for transmission project expansion, based on which a Preliminary Technical Report will be issued towards the end of the second semester of 2021. Based on comments and inputs received from the transmission companies, a Final Technical Report for Annual Transmission Expansion for 2021 will be issued in early 2022, which will be ratified by the Ministry of Energy into a decree.

ProjectVoltage (kV)Investment value (USD million)Transmission plan
Capacity augmentation of 2×500 kV Alto Jahuel–Lo Aguirre line and expansion of Lo Aguirre substation50042.222018
HVDC Kimal–Lo Aguirre line±6001,176.002018
Expansion of 110 kV Calama substation1107.362018
Expansion of Portezuelo substation2207.542018
Seccionadora Codegua substation110/6611.632018
Seccionadora Loica substation and 2×220 kV Loica–Portezuelo line22037.632018
Nueva Nirivilo–Constitución line, first circuit6611.412018
Capacity augmentation of 2×220 kV Frontera–María Elena and 2×220 kV María Elena–Kimal lines22019.562019
Expansion of Cumbre substation500/22016.532019
Capacity augmentation of 1×220 kV Charrúa-Temuco line22015.982019
Ligua substation220/11020.692019
Mapocho substation and 2×110 kV Mapocho-Vitacura line11057.712019
Seccionadora Baja Cordillera substation220/11027.422019
Seccionadora Epuleufu substation220/6613.672019
Replacement of reactive compensation equipment in Lagunas substation20.002020
Capacity augmentation of 2×220 kV Nueva Zaldívar–Likanantai line22010.482020
Expansion of Parinas substation50019.012020
Expansion of Don Héctor substation and sectioning of 2×220 kV Nueva Maitencillo–Punta Colorada line22010.022020
New reactive compensation equipment in Ancoa substation34.192020
Seccionadora Nueva Lagunas substation and 2×500 kV Nueva Lagunas Kimal line500194.462020
Expansion of La Ruca substation11010.522020
Seccionadora Totihue substation and 2×66 kV Totihue Rosario line6620.512020
Seccionadora Buenavista substation66/1516.852020
Secciondadora Llepu substation and 2×154 kV Llepu Linares line15426.602020
New 500/220 kV autotransformer bank in Ancoa substation500/22025.502021
New 500/220 kV autotransformer bank in Entre Ríos substation and relocation of 220 kV lines500/22033.902021
Capacity augmentation of 2×500 kV Ancoa–Alto Jahuel circuits 1 and 2500158.402021
Replacement of series compensators for the 4×500 kV Ancoa–Alto Jahuel line at Ancoa substation87.502021
Normalisation of Doña Carmen substation22012.102021
Normalisation of Tap Off El Llano substation22012.202021
Normalisation of Chicureo substation22014.602021
Normalisation of Manzano substation22014.302021
Normalisation of Tap Off Santa Marta substation22012.202021
Talinay Oriente substation22012.102021
Seccionadora Itata substation220/6618.302021
2×66 kV Dichato–Nueva Seccionadora Quinchimalí line6611.002021
Seccionadora Nueva Ancoa substation22019.502021
2×220 kV Nueva Ancoa–Linares line22014.702021
Expansion of Linares substation and new 3×100/100/30 MVA autotransformer bank15422.802021
Pilauco substation22012.502021
Table 1: Key planned transmission projects in Chile
Note: The above table only covers projects with an investment value of USD10 million and above. Projects included in the 2021 plan are proposed and not yet final.
Source: Coordinador Eléctrico Nacional; Global Transmission Research

Conclusion

Chile, one of the first countries in Latin America to commit to carbon neutrality by 2050, has set itself on a course of decarbonisation and energy efficiency through various strategies such as retirement of coal-based power plants, electric mobility, and increasing penetration of renewable energy technologies. The country’s transmission grid is being expanded to help Chile transition to a clean generation mix, achieve carbon neutrality, integrate higher amounts of RE sources and meet the growing energy demand. In the future, the Chilean grid is expected to become more robust, modern and flexible as the planned transmission projects come online.

The article has been sourced from Global Transmission and can be accessed by clicking here