Power sector in 2030
Chile’s power sector would need to be the first sector to reach zero emissions between 2030–2038. This will be possible through a strong uptake of renewable energy (including variable renewables, hydro and biomass) to reach a share of between 87–99% by 2030 and 100% by 2040. Chile’s National Energy Policy sets targets to reach renewables share of 80% by 2030 and 100% by 2050_.5 These targets will need to be strengthened accordingly to be aligned with a 1.5°C pathway.
A lower penetration of renewable energy will lead to a higher need for CDR technologies such as Bioenergy with carbon capture and storage (BECCS), Direct Air Carbon Capture (DACCS) or others, to compensate for emissions from remaining fossil fuels.
Towards a fully decarbonised power sector
In 2019, coal made up roughly 37% and fossil gas 19% of Chile’s total power generation.7
The full decarbonisation of Chile’s power sector in line with the 1.5°C goal requires coal to be phased out by around 2025 and fossil gas by 2031-35.
However, Chile has only committed to phasing out two thirds of its coal fired power stations by 2025, with a full phase-out date set for 2040.16 In its 2050 Energy Strategy, the government still plans to rely on liquified natural gas (LNG) in 2050, far too late when compared to a 1.5°C aligned gas phase-out date.17
On an ambitious step is Chile’s green hydrogen strategy, which aims to position Chile as the world’s cheapest supplier of green hydrogen by 2030.13
1 Climate Action Tracker. Chile. November 2022 update. Climate Action Tracker. 2022.
2 PIK. PRIMAP: Paris-Reality Check, Chile. 2016.
3 Ministerio de Energía. Energia abierta: Balance nacional de energía.
4 Guerra, E. & Guillén, J. Leyes de Eficiencia Energética en Latinoamérica y el Caribe. 2021.
5 Ministry of Energy. Energia 2050 Politica Energetica de Chile. 2022.
6 Ministerio de Minería, G. de C. Minería 2050. Politica Nacional Minera. 2022.
7 International Energy Agency. Country Profile: Chile. 2019.
8 S&P Global Platts. Chile lifts coal imports, but limited by rising natural gas supplies. S&P Global. 2019.
9 Gobierno de of Chile. Presidente Piñera presentó plan para cerrar todas las centrales energéticas a carbón para que Chile sea carbono neutral. 4 de Junio. 2019.
10 Government of Chile. Chile’s Nationally Determined Contribution – Update 2020. 2020.
11 Climate Action Tracker. CAT Climate Target Update Tracker Chile. Climate Action Tracker. 2020.
fn12. Ministerio de Energia del Gobierno de Chile. NDC y Plan de Carbono Neutralidad 2050. 2020.
13 Ministerio de Energia- Gobierno de Chile. Plataforma de Electromovilidad. Orientaciones de Politicas Publicas. 2022.
14 EBP Chile. Estudio de Movilidad Eléctrica en Chile. 2018.
15 La Tercera. El plan que busca convertir a Chile en el segundo país con más buses eléctricos del mundo. Electricidad. La revista energetica de Chile. 2018.
16 Government of Chile. Chile announces that it will work to put an end to coal use by 2030 after joining the Powering Past Coal Alliance. 2021.
17 Ministerio de Energía. Energía 2050: Política Energética de Chile. 2015.
18 Gütschow, J., Günther, A. & Pflüger, M. The PRIMAP-Hist national historical emissions time series (1990-2021). 2022.
19 While global cost-effective pathways assessed by the IPCC Special Report 1.5°C provide useful guidance for an upper-limit of emissions trajectories for developed countries, they underestimate the feasible space for such countries to reach net zero earlier. The current generation of models tend to depend strongly on land-use sinks outside of currently developed countries and include fossil fuel use well beyond the time at which these could be phased out, compared to what is understood from bottom-up approaches. The scientific teams which provide these global pathways constantly improve the technologies represented in their models – and novel CDR technologies are now being included in new studies focused on deep mitigation scenarios meeting the Paris Agreement goal. A wide assessment database of these new scenarios is not yet available; thus, we rely on available scenarios which focus particularly on BECCS as a net-negative emission technology. Accordingly, we do not yet consider land-sector emissions (LULUCF) and other CDR approaches.
Chileʼs power mix
terawatt-hour per year
- Negative emissions technologies via BECCS
- Unabated fossil
- Nuclear and/or fossil with CCS
- Renewables incl. biomass
Chileʼs power sector emissions and carbon intensity
MtCO₂/yr
- Historical emissions
- SSP1 High CDR reliance
- SSP1 Low CDR reliance
- High energy demand - Low CDR reliance
- Low energy demand
- 100%RE
1.5°C compatible power sector benchmarks
Carbon intensity, renewable generation share, and fossil fuel generation share from illustrative 1.5°C pathways for Chile
Indicator | 2019 | 2030 | 2040 | 2050 | Decarbonised power sector by |
|---|---|---|---|---|---|
Carbon intensity of power gCO₂/kWh | 440 | 0 to 90 | −20 to 0 | −60 to −30 | 2030 to 2038 |
Relative to reference year in % | −99 to −80% | −105 to −100% | −114 to −107% |
Indicator | 2019 | 2030 | 2040 | 2050 | Year of phase-out |
|---|---|---|---|---|---|
Share of unabated coal Percent | 33 | 0 to 3 | 0 | 0 | 2025 |
Share of unabated gas Percent | 19 | 1 to 3 | 0 | 0 | 2031 to 2035 |
Share of renewable energy Percent | 47 | 87 to 99 | 100 | 100 | |
Share of unabated fossil fuel Percent | 53 | 1 to 13 | 0 | 0 |
Investments
Demand shifting towards the power sector
The 1.5°C compatible pathways analysed here tend to show a strong increase in power generation and installed capacities across time. This is because end-use sectors (such as transport, buildings or industry) are increasingly electrified under 1.5°C compatible pathways, shifting energy demand to the power sector. Globally, the “high energy demand” pathway entails a particularly high degree of renewable energy-based electrification across the various sectors, and sees a considerable increase in renewable energy capacities over time. See the power section for capacities deployment under the various models.
Chileʼs renewable electricity investments
Billion USD / yr
Yearly investment requirements in renewable energy
Across the set of 1.5°C pathways that we have analysed, annual investments in renewable energy excluding BECCS increase in Chile to be on the order of USD 2 to 8 billion by 2030 and 4 to 14 billion by 2040 depending on the scenario considered. The ‘high energy demand, low CDR reliance’ pathway shows a particularly high increase in renewable capacity investments, which could be driven by an increase of electrification of end-use sectors and growing energy demand. Other modelled pathways have relatively lower investments and renewables and rely to varying degrees on other technologies and measures such as energy efficiency and negative emissions technologies, of which the latter can require high up-front investments.