popular articles

Chile’s electricity subsidy project worries ENR players

Chile's plan to triple its electricity subsidy could curb investment in renewable energies and disrupt the market for renewable energy certificates (I-RECs).

Please share:

Chile’s Ministry of Energy recently presented Congress with a bill to triple the electricity subsidy in response to rising energy prices.
Since the implementation of the Electricity Tariff Stabilization Act, tariffs have risen significantly.
The bill also proposes tougher penalties for electricity distributors who fail to meet their obligations, doubling fines and increasing compensation for service interruptions.
Although the measure seeks to protect consumers from these increases, several industry players are expressing concern about its economic effects.
Eduardo Perez of Scientiis, who specializes in risk analysis of electricity markets, warns that the 30% to 40% increase in tariffs will weigh heavily on different segments of the population.
He believes that this initiative could have political consequences in the middle of an election period, favoring rapid adoption.

Uncertainty for energy investments

Industry professionals consider that the bill introduces a climate of uncertainty.
Representatives of the Asociación Chilena de Energía Solar, the Asociación Chilena de Energías Renovables y Almacenamiento, the Unión de Generadoras de Chile and the Unión de Pequeños y Medianos Generadores claim that the legislation could hinder the development of new projects and jeopardize projected revenues from existing infrastructure.
They also point to a loss of confidence in the political authorities, which could put the brakes on the current development momentum in the sector.
This bill could reduce renewable energy production and limit the issuance of I-REC certificates, a market that has been growing steadily since 2020.
According to data from the I-TRACK Foundation, total I-REC emissions in Chile reached 23.5 million MWh up to August 2024, compared with 17.9 million MWh for the whole of 2023.
The slowdown in projects could have an impact on the future volume of these certificates.

Developments in the I-REC certificate market

Valentina de Vidts of Cero Trade notes that the potential reduction in I-REC supply, in the event of a drop in renewable production, could cause prices to rise, particularly if demand for climate certificates remains buoyant.
Platts’ latest valuations indicate prices of 67 cents/MWh for 2024 certificates and 60 cents/MWh for the 2023 vintage.
Market players are closely monitoring the evolution of this legislation and its repercussions on the investment framework.
An uncertain legal environment and an unbalanced distribution of financial burdens in the sector could deter new energy initiatives and negatively influence the growth trajectory of renewable energies.
The future direction of the regulatory framework and forthcoming legislative decisions will be crucial to the competitiveness and attractiveness of Chile’s renewable energy sector, while also determining the dynamics of the I-REC market.

Register free of charge for uninterrupted access.

Publicite

Recently published in

In London, global officials gather to discuss energy security amid rising geopolitical tensions. Disagreements persist on the role of renewable energy in meeting global demand.
As a parliamentary debate approaches, twenty energy organizations urge lawmakers to act to reduce France's reliance on fossil fuels by accelerating the electrification of uses.
As a parliamentary debate approaches, twenty energy organizations urge lawmakers to act to reduce France's reliance on fossil fuels by accelerating the electrification of uses.
Nigeria aims to increase its electricity production capacity by 4,000 MW by 2026 to meet the growing demand of the industrial sector, in a context of reforms and partnerships with international players.
Nigeria aims to increase its electricity production capacity by 4,000 MW by 2026 to meet the growing demand of the industrial sector, in a context of reforms and partnerships with international players.
EDF’s outgoing CEO, Luc Rémont, claims French electricity will be more competitive than that of the United States, despite ongoing criticisms from industrialists about high tariffs.
EDF’s outgoing CEO, Luc Rémont, claims French electricity will be more competitive than that of the United States, despite ongoing criticisms from industrialists about high tariffs.
Donald Trump's aggressive trade policies and regulatory uncertainty in the United States are slowing investments in wind, solar, and energy storage, pushing the sector into a period of caution and market volatility.
The French government activates five funding mechanisms to support industrial decarbonisation projects through the France 2030 plan, targeting major sites, SMEs and high-emission industrial zones.
The French government activates five funding mechanisms to support industrial decarbonisation projects through the France 2030 plan, targeting major sites, SMEs and high-emission industrial zones.
Paris releases a new €400mn funding package to support industrial projects aimed at reducing emissions under the France 2030 programme.
Paris releases a new €400mn funding package to support industrial projects aimed at reducing emissions under the France 2030 programme.
The massive withdrawal of American financial support and the reduction of European aid could jeopardize energy projects in Africa, profoundly altering their financing structure and the continent's commitments.
The massive withdrawal of American financial support and the reduction of European aid could jeopardize energy projects in Africa, profoundly altering their financing structure and the continent's commitments.
The Vietnamese government has raised its renewable energy targets in a new version of its national energy plan, responding to continued growth in electricity demand.
A massive outage plunged Puerto Rico into darkness on Wednesday, leaving approximately 1.1 million households without electricity after an unexpected shutdown of all its power plants.
A massive outage plunged Puerto Rico into darkness on Wednesday, leaving approximately 1.1 million households without electricity after an unexpected shutdown of all its power plants.
The Czech Republic has ended its dependency on Russian oil after more than six decades, a major shift made in response to Russia's invasion of Ukraine.
The Czech Republic has ended its dependency on Russian oil after more than six decades, a major shift made in response to Russia's invasion of Ukraine.
The European power purchase agreement (PPA) market for renewables reached 19 GW of new capacity in 2024, with growing momentum for hybrid contracts including storage.
The European power purchase agreement (PPA) market for renewables reached 19 GW of new capacity in 2024, with growing momentum for hybrid contracts including storage.
Industry Minister Marc Ferracci criticised the Rassemblement National's stance on energy, accusing it of hindering planned investments in renewables in favour of fossil fuel imports.
Bill 69 sparks protests in Saint-Jean-sur-Richelieu, where several organisations denounce a risk of privatising Quebec’s electricity sector.
Bill 69 sparks protests in Saint-Jean-sur-Richelieu, where several organisations denounce a risk of privatising Quebec’s electricity sector.
Wind and solar energy accounted for nearly one-fifth of Türkiye’s electricity generation in 2024, according to an analysis by think tank Ember, driven by a strong increase in installed capacity.
Wind and solar energy accounted for nearly one-fifth of Türkiye’s electricity generation in 2024, according to an analysis by think tank Ember, driven by a strong increase in installed capacity.
The Acerez consortium has signed a 35-year agreement to build and operate over 240 km of high-voltage lines in Australia, marking the country's first public-private partnership in the sector.
The Acerez consortium has signed a 35-year agreement to build and operate over 240 km of high-voltage lines in Australia, marking the country's first public-private partnership in the sector.
France’s multi-year energy strategy shifts focus away from photovoltaics toward flexibility measures, including battery storage, to address growing imbalances in the electricity market.
France’s energy regulator unveils its first observatory dedicated to renewable electricity purchase agreements, highlighting a recent but still marginal growth compared to State-backed mechanisms.
France’s energy regulator unveils its first observatory dedicated to renewable electricity purchase agreements, highlighting a recent but still marginal growth compared to State-backed mechanisms.
The French government plans to adopt within two weeks a decree outlining the decade’s energy objectives, restarting nuclear power and preparing for a parliamentary debate on energy sovereignty.
The French government plans to adopt within two weeks a decree outlining the decade’s energy objectives, restarting nuclear power and preparing for a parliamentary debate on energy sovereignty.
The expansion of solar and wind capacity is multiplying hours of negative prices on European electricity markets, weakening the sector's economic balance while reshaping export and storage dynamics.
The expansion of solar and wind capacity is multiplying hours of negative prices on European electricity markets, weakening the sector's economic balance while reshaping export and storage dynamics.
Despite a predominantly decarbonised electricity production, demand in Europe remains subdued, hindered by uncompetitive prices and limited industrial usage.
Data from think tank Ember reveals that fossil fuels accounted for just 49.2% of US electricity generation in March 2025, marking an unprecedented threshold.
Data from think tank Ember reveals that fossil fuels accounted for just 49.2% of US electricity generation in March 2025, marking an unprecedented threshold.
The global electricity mix shifted in 2024 with 40.9% of production from low-carbon sources, according to Ember, driven by historic solar power growth.
The global electricity mix shifted in 2024 with 40.9% of production from low-carbon sources, according to Ember, driven by historic solar power growth.
Facing recurring shortages, Tajikistan tightens energy laws by introducing prison sentences of up to ten years for electricity fraud to protect its ageing hydropower network.
Facing recurring shortages, Tajikistan tightens energy laws by introducing prison sentences of up to ten years for electricity fraud to protect its ageing hydropower network.

Advertising