Newsletter ACERA - Mayo 2020

04.
EDI
TO
RIAL
REGULATION OF THE ELECTRICITY SECTOR
NEEDS CONSISTENCY
Chile's electricity sector enjoys a well-deserved prestige with domestic and foreign investors, who have
always emphasized its regulatory stability, respect for laws and the powers of public bodies related to this
sector, and also the low intervention of the authorities in matters concerning the market’s functioning.
It has not been easy to achieve this position in a region characterized by permanent political swings that end
up affecting energy policies, particularly those related to the promotion of renewable energy,
decarbonization, fossil fuels, and climate change.
Since the publication of the -then pioneer in the world- General Law on Electric Services in 1982, Chile
began a hard learning curve, had to correct some pre-established concepts, such as the implicit idea that
the generation and transmission segments only required small economic signals to ensure the
investments necessary for the expansion of the system and the offer of competitive prices to their
customers. From this learning came the short laws, the installation of bidding mechanisms to obtain the
supply of energy to distributors, the network code in the form of the Technical Standard of Safety and
Quality of Service, the laws of renewables and the reform of the transmission system, to name just a few.
Today we have an extensive and complex regulatory framework that has shown positive results in terms of
attracting investment, reducing energy prices for customers, achieving a high level of competition, and
rapidly inserting renewable generation sources, thus taking advantage of the vast solar, wind, geothermal,
bioenergy and hydroelectric resources of our country.
This consistency in the regulation of the electricity sector that we have achieved must be
maintained and protected, being the maximum wealth with which Chile counts. The upheaval in our
country resulting from the events initiated in October last year, and then with the health crisis by COVID 19,
has generated a high uncertainty in the industry and we believe that those who have in their hands the
power to regulate the electricity sector should bear in mind the preservation of these aspects, which have
given Chile the recognition of being one of the most attractive markets for investment in clean energy in
recent years.
It is necessary to implement laws, their regulations and their respective rules, unrestricted respect for the
payment chain, as well as compliance with the dates established for the issuance of decrees or resolutions
mandated by the current regulation, all of which are deeply appreciated by the agents of the electricity
market. On the contrary, if any of the aspects mentioned above are not fulfilled, the perception of risk
increases, adding to the uncertainty generated by the social demonstrations and the ongoing pandemic,
reducing the interest of investors and jeopardizing the ambitious goals that Chile has set itself in such
relevant matters as the decarbonization of its electric matrix, the promotion of electromobility, the
decontamination of cities, and the recovery of our "sacrificial zones".
In this regard, our call is to carry out the fundamental discussions in order to continue advancing Chile's
energy transition, which is key –in turn– to the green revival of our economy after the pandemic. We refer,
for example, to the discussion of the law that will modernize the distribution segment, to review (and/or
complete) the regulations and rules that are pending, such as the PMGD regulations, the rule of dispatch of
natural gas plants, the provisions related to flexibility, and the standards necessary to establish the system
of guarantees for the payment chain.
ACERA is available to civil authorities, companies and institutions to participate in the discussions that are
required and provide the necessary background to advance this path that has brought such good news to
the country and which we now need more than ever. Representing more than 80% of Chile's renewable
generation and with close ties to various countries in the world, our contribution will enable a healthy,
transparent and deep discussion to achieve a green, sustainable and resilient recovery of our country.
Carlos Finat
Executive Director
José Ignacio Escobar
President