Chile releases final long-term energy plan for 2023-27

The Ministerio de Energía (Ministry of Energy) of Chile published the final Planificación Energética de Largo Plazo (PELP) 2023–27 on April 22, 2025, in accordance with Articles 83–86 of the Ley General de Servicios Eléctricos (LGSE) or General Law of Electric Services.

PELP is a public policy instrument released every five years to ensure sustainable, resilient, and fair development of Chile’s power sector. It projects energy supply and demand scenarios, identifies renewable energy hubs, and guides investment decisions in the transmission sector. It also contributes to Chile’s Energy Sectoral Plan for Climate Change Mitigation and Adaptation, Green Hydrogen Action Plan 2023–30, and Decarbonization Plan.

The 2023–27 edition has defined three scenarios: slow recovery, carbon neutrality, and accelerated transition. It introduced Polos de Desarrollo de Generación Eléctrica (PDGE) or Electricity Generation Development Hubs for the first time. PDGEs will be established across Antofagasta and Tocopilla provinces. In Tocopilla, two renewable generation zones are planned to replace outgoing thermal power generation. In Antofagasta, three zones are being designed in Sierra Gorda and Taltal, based on site-specific energy potential.

The power sector is Chile’s largest greenhouse gas (GHG) emitting sector, accounting for 27% of total GHG emissions and 39% of energy sector emissions. In 2023, the electricity mix was approximately 29% hydropower, 20% solar, 17% coal, 18.5% fossil gas, 11% wind power, 4% other fossil fuels, and 0.5% other renewables.

Fossil fuels have historically made up two-thirds to a half of Chile’s electricity generation. Hydropower’s contribution has notably dropped since 2021, due to droughts and the expansion of wind and solar energy.

Chile’s energy planning is also guided by the updated Política Energética Nacional (PEN) or Energy Transition Strategy, released in March 2022. It raised Chile’s renewable energy targets to 80% by 2030 and 100% by 2050. According to Climate Action Tracker, Chile should aim for a 96–98% renewables share by 2030 and decarbonisation by 2035 to align with a 1.5°C pathway.

Chile’s coal phase-out plan, announced in 2019, aims for complete coal exit by 2040. However, the process is advancing faster than initially planned. As of July 2024, Chile has retired 11 coal plants with about 1.2 GW capacity. Nine more units are committed for retirement or conversion by 2025, though 1.9 GW of coal capacity remains without firm commitments. Chile’s Decarbonisation Plan, presented in January 2024, targets retiring or retrofitting 70% of coal plants by the end of 2025.

Chile’s Energy Efficiency Law (Law No. 21.305), effective since February 2021, targets a 10% reduction in final energy consumption by 2030 and 35% by 2050. It covers industry, mining, transport, and building sectors.

Chile has also implemented a carbon tax since 2017, currently applicable to all large emitters, though the low tax rate has limited its effectiveness.

On fossil gas, Chile relies heavily on imports, but has recently signed deals to expand domestic production. Fossil gas made up about 18.5% of electricity generation in 2023. Retrofitting coal plants to gas raises concerns for long-term climate goals, as fossil gas must play a minimal role to maintain a 1.5°C pathway.

Several laws have supported Chile’s renewable growth. The Law on Energy Storage and Electromobility (Law 21.505), passed in 2022, promotes standalone storage systems. The Energy Transition Law is progressing to promote key infrastructure for carbon neutrality. The Bill Promoting Renewable Energies in the Electricity Matrix seeks to gradually raise renewable shares in new electricity contracts to 60% by 2030.

Chile’s green hydrogen strategy also plays a crucial role in its energy transition. It targets becoming a leading green hydrogen producer by 2030 and a top three global exporter by 2040. Chile’s Green Hydrogen Action Plan, published in April 2024, outlines actions to enable hydrogen adoption across transport, mining, agriculture, and industry.

Chile’s energy sector faces the challenge of balancing fast renewables deployment, energy security, and fair transitions for communities affected by coal plant closures.