Chile’s Wasted Renewable Power Threatens Green Transition

Chile’s early progress in renewable energy, driven by the sunny Atacama Desert alongside the strong winds found in Patagonia, faces a disappointing obstacle. Great excess production plus a stressed transfer grid waste huge quantity of clean energy. This puts the country’s large environmentally friendly plans at risk.

Overcapacity And Stagnant Demand

For years, Chile led Latin America’s renewable push, courting investors eager to tap into its robust solar and wind potential. Yet despite impressive progress, an alarming amount of that energy is going to waste. In an interview with EFE, Ana Lía Rojas, Executive Director of the Chilean Association of Renewable Energies and Storage (Acera), highlights a startling figure: “In 2024, we saw more than 5,900 gigawatt-hours (GWh) wasted—equivalent to 20% of all wind and solar production.” Worse still, she adds, “Each year, we break new records for energy that goes unused.”

This phenomenon stems in part from over-installation. According to Ernesto Huber, Executive Director of the National Electrical Coordinator (CEN), “The installed capacity for solar and wind now exceeds 16,000 megawatts (MW), while daytime demand may only top out at around 12,000 MW.” The mismatch has swelled as economic growth faltered. Chile’s GDP, per official data, has generally climbed no more than 3% per year since 2022, damping electricity consumption.

“Electric demand hasn’t risen as expected, especially for a country supposedly on a path toward greater electrification,” laments Rojas. To address the deficit, Acera promotes greater electrification of transit and adjustable user fees. These charges would correspond to energy production costs. She thinks such approaches would increase the part renewables play in Chile’s total electricity supply. Officially, those sources compose around 40% of the supply—already second in Latin America behind Brazil, but they could have hit 47% in 2024 had wasted power has been captured and used.

Chile’s Department of Energy has championed green policies and welcomed large-scale plants in sun-drenched regions like Atacama. But with so much extra capacity, these same plants now find themselves throttled, particularly when demand is low. According to Huber, “Roughly 80% of the excess stems from over-offer, while 20% reflects congestion in the transmission lines.” On paper, this might imply that if the country’s consumption soared, a significant amount of the generation could be absorbed. Without robust demand, though, the surplus solar and wind resources cannot be fully integrated into the grid.

Outdated Transmission Infrastructure

Even if consumption suddenly surged, the second major challenge remains: transmission constraints. As Rojas puts it, “Bottlenecks or inadequate transmission are preventing this abundant, affordable energy in the north from reaching the center and south of the country.” Indeed, the expansion of the grid has lagged behind the boom in generating facilities. Chile’s regulatory environment encouraged fast-tracked construction of solar and wind farms but neglected parallel improvements in the electrical corridors connecting them to major population centers.

According to Huber, some planned enhancements were delayed by a combination of global disruptions and cost escalations. “The pandemic, rising construction expenses, and logistical strains all played roles,” he explains. By December 2024, around 85% of the projects supervised by the CEN—intended to expand or modernize the grid—involved some delay, as Acera data confirm.

Environmental organizations also note the absence of a strategic approach. “Yes, we have favorable conditions for renewable projects, but we didn’t plan how to decentralize generation or ensure sufficient transmission,” says Estefanía González, a representative for Greenpeace in Chile, speaking to EFE. Efforts to push more power lines through mountainous, ecologically sensitive areas have encountered friction with local communities, environmental reviews, and intricate regulatory approvals. The net effects? In some instances, fully operational facilities can only dispatch a fraction of their output due to insufficient cable capacity.

Many in the sector worry that the patchwork growth of the grid imperils Chile’s vow to end coal-fired power generation. If wind and solar plants cannot reliably reach consumers, phasing out fossil fuels becomes a far steeper climb. Local discontent can mount as developers scramble to justify the cost of building clean power stations whose returns dwindle without consistent distribution channels.

Storage And the Evolving Grid

Both experts and industry insiders increasingly believe that large-scale energy storage can provide a lifeline, especially as the cost of battery technology decreases. In an interview with EFE, Dasla Pando, a researcher at the University of Chile’s Energy Center, underscores the potential. “When energy would otherwise be wasted, it can be stored and released later. That displaces power from midday peaks to times when the grid can handle more supply,” she explains.

Chile already operates around 1,000 MW of storage capacity—” either fully functional or in trial phases,” says Huber, clarifying that this technology typically shifts about 4 GWh of energy for evening use. Moreover, the grid operator has received connection requests for over 12,000 MW of additional storage, reflecting broad interest from global investors. Huber envisions “at least 2,000 MW of storage online by year’s end,” which he predicts will continue growing.

Yet storage alone will not solve structural issues. Observers like Pando call for modernized grid operations and dynamic forecasting that better accommodate renewable variability. If Chile’s system is to maximize green power, the dispatch protocols run by the CEN must adapt more fluidly, factoring in potential battery resources and real-time changes in demand. By upgrading from static to more flexible control mechanisms, Chile could carve out more space for its expanding portfolio of wind and solar capacity.

Such evolution may hinge on legislative will. While successive administrations trumpet climate goals, the capital-intensive nature of transmission overhauls—and the complexity of regulated energy markets—can slow progress. Some highlight that pricing structures, tied closely to historical usage patterns, do not yet reward storing surplus power. Others argue for creating “renewable corridors,” funneling new projects into areas with high local demand or established distribution lines, thereby reducing the risk of overbuilding and bottlenecks.

The issue concerns more than just Chile’s image as a frontrunner in the energy transition for Latin America. A wider need related to the climate requires that the nation’s plentiful sun and wind become real decreases in pollution. Chile has to close the space between possibility and what is by adding more transmission structures, many batteries, or changes to usage. For now, it remains a paradoxical case: a land of abundant clean power frequently forced to waste what it produces.

Also Read: Chile Mining Industry Prepares For Looming Earthquake Threat

If Chile’s renewable revolution hopes to sustain its momentum, it cannot afford to let gigawatt-hours slip away unused. The path forward demands aligning everything from the everyday consumer’s electricity rates to the design of national highways (for electric vehicles) and from the forging of new high-voltage lines to seamlessly integrated storage infrastructure. Only then can Chile harness the full might of the Atacama sun and the Patagonian winds to drive a truly green future.