The energy transition in Chile is more complex and challenging than it may seem

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Date: January 12

In the annual balance of the Chilean renewable union, the Chilean Association of Renewable Energies and Storage (ACERA), it was highlighted that 2022 was a record year for NCRE, with a 33% share in electricity generation, increasing 6 points percentages with respect to the previous year; and NCRE installed capacity reached 13,781 MW, constituting 41.3% of the country’s installed capacity. Likewise, during 2022, the SEN emissions factor decreased by 22% compared to 2021, which is equivalent to reducing the vehicle fleet by 1.5 million vehicles.

Good figures, at a turning point

This is reflected in the Balance Sheet figures presented at ACERA’s Annual Press Conference, which featured analyzes and presentations by the Chairman of the Board of Directors of the union, Jaime Toledo and its Executive Director, Ana Lía Rojas, who, in addition to the main milestones of the year recently passed, they highlighted the perspectives and main challenges facing 2023.

In his opening, Jaime Toledo, President of ACERA, highlighted that NCREs are no longer a declaration of intent or a dream, but that “the only way for our national electricity system to continue expanding, consistent with the climate urgency, the demands of the citizens and the fulfillment of our commitments in environmental matters and justice in the energy transition”, he clarified.

However, he pointed out that together with the optimism of the good figures for 2022 and the great successes and advances in the last 20 years, we are also “at a turning point, with potholes and great challenges for that path of actions that we require as a country to being able to materialize the long-awaited energy transition of our sector”, adding that “we cannot remain complacent without pointing out the multiple challenges that as an industry we will have to overcome this 2023 to continue advancing strongly and decisively in public-private work for which it is necessary dialogue and understand that this energy transition is more complex and challenging than it may seem”, stressed Toledo.

Alerts for next steps

Although there was an increase in renewable generation in the matrix, and a record number in their participation, in 2022 a series of effects were experienced for the renewable energy and storage sector, alerts that may imply a loss of attractiveness for new investments in the renewable sector, such as: record NCRE cuts or dumping, high exposure to zero marginal cost, adding between 1,500 to 2,000 hours of zero prices in the system and deepening of inter-nodal price differences, known as decoupling , three affectations that, however, do not have a management plan for the coming months.

Generation companies that reported their inability to comply with their regulated customer contracts, and therefore, suspended from the short-term market, were also mentioned as a low point of the year. Finally, the serious affectation that the modification of the power regulation will entail, the detriment of the recognition of payments for solar energy and the increase in payments for fossil energy, is not consistent with or coherent with the decarbonization policy that the country pursues, to name just a few of the points that worried the most last year.

“One of the most important challenges for 2023 is the management plan for discharges that correspond to cuts in renewable, clean, and cheap energy that cannot be integrated into the system for various reasons associated with transmission, congestion, and lack of flexibility. of the national electric park. These have increased by 225% compared to 2021”, warned the executive director of ACERA, Ana Lía Rojas.

Finally, the union detailed a varied list of challenges, where they considered essential to highlight at least the most key ones for the future of the energy sector as a whole; among them, continuing to parley with the Executive on the proposal for the new power regulation, which once it enters into force, grants recognition of payments for storage to the detriment of solar energy and without affecting fossil thermal sources; Urgently promote the start of a serious and well-founded discussion on the design and definition of remuneration for an electricity market with a high penetration of renewables, which is required for a decarbonized future; and finally, the importance of having an adequate territorial management for all the actors of the energy transition of the electricity sector, where in order to meet the decarbonization goals it is necessary to build more renewable plants.

Source: Infoenergética

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