Newsletter ACERA - Enero 2022

04.
DECARBONIZATION:
AN INSTITUTIONAL CHALLENGE
The current climate crisis has been one of the recurring themes picked up within
the participatory-programmatic process of President-elect Gabriel Boric.
Surprisingly, in light of the results, it transcends as one of the priority issues for
Chilean men and women from the Atacama region to Los Lagos in the south of
the country.
At the sectoral level, there is a broad consensus on the fundamental role of the
energy sector in mitigating the effects of climate change. In this sense, little by
little we observe a transition of the sector from the logic of the 80's based on
economic efficiency, energy security and subsidiarity of the State, towards the
incorporation of new purposes such as resilience, through adaptation to climate
change, quality of service, decentralization, among others.
Currently, the most relevant bet on the matter is in the decarbonization, initially, of
our electricity sector. However, the current design of the Chilean electricity
market is not prepared to support an efficient process of deep decarbonization of
the national electricity matrix. Not, at least, with the signals currently provided by
the regulatory framework.
O
PI
NION
Carlos
Suazo
Executive Director of
Consultora SPEC
Therefore, the energy transition of the coming years will require a new look,
where, among others, it is necessary to review the economic signals that facilitate
the cost-efficient adoption of renewable energies, new technologies and
end-user participation, while ensuring a safe operation of the grid.
Relevant changes will be needed in different areas of electricity regulation, for
which regulatory stability will be called into question in the context of deep
decarbonization: a balance between necessary changes and refinements or less
important modifications that can be relieved. Regulatory stability does not mean
maintaining the current rules, but rather that the modifications made are aimed at
a clear public policy objective.
The task requires the maturity that comes from an informed debate that generates
consensus among the different industry players in order to give validity and
robustness to the process. It must have the character of a State policy, bringing
together shared visions among the most diverse agents of the sector, since its
implementation will undoubtedly require the permanent effort of several
governments. It is worth asking ourselves about the need for a more independent
regulatory agency, which will allow us to bring together the visions of the different
actors in the industry and the citizenry, to gather the strategic value of our sector,
and to give continuity to this transforming process.
The question arises from the inherent difficulty of choosing between tactical
adjustments to the current approach or leading structural change in a strategic
direction. In the face of good results, the regulator may be held captive by the
success of its current approaches and the reluctance to move away from a model
that continues to work tolerably well is entirely understandable.
The path to energy transition will require institutions and organizational cultures
that are comfortable challenging the status quo. To this end, we must recover the
sectoral culture where opinions based on scientific evidence prevail, so as to
generate a debate with a constructive spirit. Along these lines, it would be
interesting to promote the creation of specialized units or teams within the
regulator with the mandate to constructively challenge orthodoxy, develop
innovative alternative policies, and convene other agencies in the sector so that
they can proactively lead the necessary changes that will facilitate
decarbonization in the coming years.
* Column originally published in Ciper.
This will not be an easy task: decarbonization will be not only a technical,
regulatory, environmental and economic challenge, but also a human and
institutional one. It means leaving no one behind. It will require strong and
visionary leadership. In view of this, we must work now so that the current context
does not become an internal barrier and hinder our energy transition.