BMI View: We maintain our positive outlook for Chile ' s power market, premised on its stable business environment and investor-friendly regulations , an upbeat macroeconomic prospect and robust growth in power consumption . T he government ' s use of energy auctions for the regulated market , coupled with energy demand from miners located far from the main power network, will create long-term business opportunities for power generators . Meanwhile, the need to expand Chile 's power grid will drive demand for transmission infrastructure.
|e/f = BMI estimate/forecast. Source: EIA, CNE, BMI|
|Generation, Total, TWh||74.071||82.588||85.256||89.657||95.712||98.596||101.129|
|Consumption, Net Consumption, TWh||72.2||75.8||79.9||85.1||89.4||93.0||96.9|
|Capacity, Net, MW||20,496.3||23,978.4||25,229.2||26,830.5||27,787.2||28,345.0||28,929.8|
Latest Updates And Structural Trends
In December 2015, Chile's national oil company (NOC) ENAP signed an agreement with Japan's Mitsui for the development of two combined-cycle gas-fired thermal power plants, the 760MW Luz Minera and the 510MW Nueva Era plants. The projects - which reportedly have a cumulative investment value of almost USD1.5bn - are planned to be built in northern and central Chile, respectively, receiving feedstock from the Quintero and Mejillones liquefied natural gas (LNG) import terminals. ENAP plans to bid the two gas-fired projects in the upcoming auction for procuring power for Chile's regulated market, scheduled for May 2016.
In January 2016, a bill allowing ENAP to access the power generation sector - by holding a stake of up to 66% in power generation projects, under joint ventures (JVs) with private companies - received the definitive approval by the Chilean parliament. The government is committed to making ENAP a new pillar of Chile's electricity market, as it hopes that participation of the NOC in the production of electricity from natural gas will drive down the country's electricity prices.
These developments support our upbeat growth outlook for gas-fired power generation in Chile over the next 10 years. Our forecast is also premised on progress in the development of several other gas-fired power plants in the country, low international LNG prices due to a global glut and the government's commitment to increasing the role of gas in Chile's energy matrix.
Rapid implementation of solar and wind power projects over the past months prompted us to upwardly revise our forecasts for total power capacity and generation in Chile this quarter. Government data for the renewables sector continue to support our view that Chile will be a regional outperformer for investment in renewables over the coming quarters. As for a February report from CIFES, in January 2016 there were a total of 2,815MW of non-hydro renewables projects under construction in the country - with approximately 2,500MW of capacity to come online in 2016.
In January 2016, the lower house of Chile's parliament approved a bill presented by the government in 2015 to reorganise the structure of Chile's power transmission sector. The bill aims to increase competition in the power generation sector, improve the quality of the service, and reduce electricity prices for consumers by attracting investment in the transmission sector. We expect the government to push for the new regulation to be approved by the upper house of the parliament ahead of the May 2016 energy auction for the regulated power market.
In February 2016, Chile started to export electricity to Argentina. The power sold (110MW) is being generated by the GasAtacama power plant, owned by Endesa. Electricity is being transmitted via an existing power line owned by AES Gener, which stretches between Mejillones and Salta.
The Chile Power Report features BMI Research's market assessment and independent forecasts covering electricity generation (coal, gas, oil, nuclear, hydro and non-hydro renewables), electricity consumption, trade, transmission and distribution losses and electricity generating capacity.
The Chile Power Report also analyses the impact of regulatory changes, recent developments and the background macroeconomic outlook and features competitive landscapes comparing national and multinational operators by sales, market share, investments, projects, partners and expansion strategies.
- Use BMI's independent industry forecasts for Chile to test other views - a key input for successful budgeting and strategic planning in the power market.
- Target business opportunities and risks Chile's power sector through our reviews of latest power industry trends, regulatory changes, and major deals, projects and investments in Chile.
- Assess the activities, strategy and market position of your competitors, partners and clients via our Competitive Landscape analysis.
BMI Industry View
Summary of BMI’s key industry forecasts, views and trend analysis, covering power markets, regulatory changes, major investments, projects and company developments.
Industry SWOT Analysis
Analysis of the major Strengths, Weaknesses, Opportunities and Threats within the power sector and within the broader political, economic and business environment.
BMI’s Power Forecast Scenario
Forecasts to end-2024 for all key indicators, supported by explicit assumptions, plus analysis of key downside risks to the main forecasts:
- Generation: Electricity generation total, thermal, coal, natural gas, oil, nuclear, hydropower, hydro-electric pumped storage and non-hydropower renewables.
- Transmission and Distribution Losses: Electric power transmission and distribution losses.
- Trade: Total imports and exports.
- Electricity Consumption: Net consumption.
- Electricity Capacity: Capacity net, conventional thermal, nuclear, hydropower and non-hydroelectric renewables.
BMI’s Power Risk Reward Index
BMI’s Risk Reward Indices provide investors (power companies, service companies and equity investors) looking for opportunities in the region with a clear country-comparative assessment of a market’s risks and potential rewards. Each of the country markets are scored using a sophisticated model that includes more than 40 industry, economic and demographic data points to provide indices of highest to lowest appeal to investors,
Structure, size and value of the industry sector; overview of the industry landscape and key players; an assessment of the business operating environment, sustainable energy policies, pricing and the latest regulatory developments.
Key Projects Database
Details and analysis of all current and planned developments (new ventures, capacity expansion and other investments) across the sector broken down by location, sector type, capacity, value, companies and operational status.
Illustration of the power industry that exploits our data-rich, in-depth analysis of the leading players in the sector and examination of operational results, strategic goals, market position and the potential for investment.
Power Outlook long-Term Forecasts
Regional long-term power forecasts covering electricity generation, consumption and capacity for thermal, hydroelectric and nuclear power. These are supported by a country specific overview, alongside an analysis of key downside risks to the main forecasts.
Providing BMI’s near-term economic outlook for the region as a whole, as well as taking a close look at countries of particular interest and the latest trends and developments.
The Power Market Reports draw on an extensive network of primary sources, such as multilateral organisations, government departments, industry associations, chambers and company reports, including Energy Information Administration (EIA), World Bank (WB) and United Nations (UN).