Chile’s newly appointed Energy Minister, Ximena Rincón, has introduced the government’s legislative roadmap for the electricity sector, outlining a strategy to modernize regulation and unlock new market dynamics such as distributed generation and end-use electrification.
The plan, presented before the Senate’s Mining and Energy Committee, is part of the broader energy vision of President José Antonio Kast, aimed at increasing investment in renewables, improving grid performance, and strengthening long-term regulatory predictability.
A central pillar of the proposal is a deep reform of the electricity distribution segment, seen as essential to enable:
- Distributed energy resources (DERs)
- Electric mobility (EV adoption)
- Demand response mechanisms
- Greater participation of new market players
According to Rincón, Chile’s current distribution framework dates back to the 1980s and was designed under a natural monopoly model, with tariffs based on the costs of an “efficient model company.”
“It is time to reassess what worked in that framework and update it to meet current challenges,” the minister stated.
The government’s diagnosis points to a structural mismatch in the existing system, affecting:
- Quality and reliability of electricity supply
- Integration of renewable energy and distributed generation
- Adaptation to evolving consumption patterns
- System resilience under stress conditions
The upcoming bill aims to:
- Modernize the regulatory framework for distribution networks
- Improve service quality and supply continuity nationwide
- Promote investment in grid infrastructure
- Introduce distribution network planning mechanisms
- Enable a more digitalized, flexible, and smart grid
This includes accommodating emerging technologies such as:
- Electromobility
- Energy storage systems
- Demand-side management
The reform aligns with a market-oriented approach, seeking to eliminate distortions, empower consumers, and provide clear rules for private investment in the electricity sector.
2026–2030 plan: investment, permits, and digital infrastructure
Complementing the structural reform, the government introduced a priority action plan for 2026–2030, focused on accelerating energy investments and reducing regulatory bottlenecks.
- A permitting reform law to fast-track strategic energy projects
- A regulatory framework for green digital economy infrastructure, particularly data centers
The Ministry of Energy highlighted plans to develop specific regulations for energy-efficient data centers, including:
- Clean energy supply requirements
- Use of curtailed or surplus renewable energy
- Strategic siting criteria
In parallel, the Executive has resubmitted several key regulations to Chile’s Comptroller General for review, including updates to:
- Supreme Decree No. 125 (system operation and coordination)
- Supreme Decree No. 88 (framework for small distributed generators – PMGD)
- Supreme Decree No. 37 (transmission planning)
These adjustments aim to ensure consistency with Law No. 21,804, which recently updated regulations for medium-sized power systems.
DS 125 (system operation):
- The Coordinador Eléctrico Nacional must apply alternative dispatch schemes in case of failure of automated systems
- The system operator will periodically recalculate the opportunity cost of managed energy
DS 88 (distributed generation – PMGD):
- Existing Pequeños Medios de Generación Distribuida (PMGD) adding energy storage systems will no longer be eligible for the previous regulated price stabilization mechanism
Chile’s legislative roadmap signals a shift toward a more flexible, digital, and investment-friendly electricity system, aligned with global trends in:
- Renewable energy integration
- Smart grids and digitalization
- Distributed energy and storage
- Private sector participation
