The Electricity Distribution Reform aims to modernize regulations that are over 40 years old. This initiative seeks to strengthen the power grid and address the challenges posed by the energy transition, increasing demand for clean energy, and the impacts of climate change. The goal is to enhance the quality of electricity supply, encourage investment in infrastructure, and ensure that services are accessible to everyone.
"If we truly want to achieve and accelerate the energy transition, a key component of our strategy and the country's goals, we need to change the regulation," said Giuseppe Turchiarelli, general manager of Enel Chile, highlighting the urgency of reform to adapt to the new needs of the country.
What is the reform about?
The current regulatory framework dates to 1982, when extensive electrification of the city was essential. Today, however, the main challenge has shifted: We must adapt to the demands of the energy transition and strengthen a system that ensures quality, safety, and resilience in the electricity supply, particularly considering the increase in consumption in recent decades.
The reform aims to create conditions for the electric grid to meet the demand for clean energy, address extreme weather events, and support the growth of electromobility.
What are the pillars that this reform should include?
- Investments and network modernization: Encourage investments that guarantee access to higher quality service and allow for adaptation to new technologies, such as digitalization and automation of the network.
- Tariff regulation and support for vulnerable users: Reallocation of tariff revenues to stabilize prices and support low-income families, together with a review of the value of infrastructure investments.
- Development of distributed generation and storage: Encourage the use of small-scale renewable energies and facilitate energy storage to optimize the grid and minimize current losses or spills.
- Tariff flexibility and resilience: Enable the incorporation of advanced technologies, such as smart metering, and create a regulatory framework that facilitates the construction of new structures to cope with mass electrification and climate events.
What factors influence the need for reform?
- Decarbonization and energy transition: Chile has set ambitious targets to boost clean energy generation and minimize fossil fuel usage. However, these targets cannot be met in the upcoming years without a modern and resilient electricity grid.
- Quality of service: /b> Current networks lack the standards needed to meet increasing demand, particularly with the rise of electromobility and new energy applications like data centers and electroterminals.
- Extreme weather events: The reform will allow infrastructure to adapt to weather events that can affect the quality of supply on various occasions.
- International experience: Chile is one of the few countries in South America that still employs a model company system for electricity distribution. This system limits the incentives to enhance the quality of the networks. The proposed reform aims to address this issue and position the country as a leader in a modern electricity structure.
Reform is essential for Chile to progress toward a more sustainable and carbon-neutral future. Modernizing regulations and encouraging investment in the energy grid will help us tackle the challenges of the energy transition, enhance service quality, and ensure inclusive energy development.