Our country has seen significant legislative activity in recent years due to the implementation of the National Energy Policy[1], including the enactment of crucial laws such as the "Climate Change Law" (2022) and the "Law Promoting Electric Energy Storage and Electromobility" (2022), among others. This regulation has contributed with an accelerated development of renewable energy and storage projects.
Energy Transition Bill and Energy Storage:
In July this year, a bill was introduced to the Chilean National Congress to amend the General Law of Electric Services in matters of energy transition[2]. This bill positions power transmission as an enabling sector for carbon neutrality. The bill encompasses measures ranging from the modification of the bidding system for transmission expansion projects, the regulation of "urgent works" subject to regulated procedures outside the annual transmission planning, and the promotion of energy storage projects, among others.
It is interesting to observe how quickly BESS (Battery Energy Storage Systems) technologies have been integrated into renewable energy projects in Chile, with several parks in operation and even more in development for upcoming operation.
At Prieto, we have faced the challenge of participating in various BESS projects, allowing us to understand the legal challenges of their development and implementation, in front of new technologies and to the absence to this date of a regulatory framework adapted to the matter.
Regulation of Police Escorts and its Impact on Wind Farm Development in Chile:
In Chile, the development of wind farms has significantly increased, considering the ample availability of resources in various parts of the country, as well as their operating and maintenance costs compared to other energy sources such as photovoltaic solar. Particularly noteworthy is the advancement of technology allowing for wind farms with increasingly higher generation capacities.
Consequently, there is a growing need for a greater volume of equipment and materials required for their construction, including various oversized components that must be transported from different ports across the country to the respective parks and sites. These oversized components are regulated by Chilean law as "oversized loads," which mandatorily require police escorts for their transport to ensure road safety.
Thus, the Chilean police (Carabineros de Chile) must allocate efforts between their duties of maintaining order and security throughout the national territory, and providing escorts for these kinds of projects, which presents a significant practical challenge: the lack of available police escorts.
This has resulted not only in delays but also in significant additional costs in wind farm construction associated with the standby of the works. Various stakeholders involved view this regulation as an inefficient use of public resources, generating uncertainty regarding the effective acquisition of escorts, and producing tangible consequences and impacts. We have observed that these impacts can be seen from the project development stage (even affecting negotiation phases) and especially in the implementation of contracts for the supply of key equipment, construction, and installation, potentially impacting the critical path of projects and ultimately their entry into operation.
We can affirm that this regulation ultimately poses an obstacle to achieving the goals of our country's National Energy Policy. We believe that, notwithstanding the numerous efforts and good intentions from the relevant stakeholders, there is still a need for a regulatory framework that reflects current needs and allows for the resolution of existing challenges and difficulties. To achieve this, our regulation should follow other jurisdictions, in which the escort of major equipment is done with private sources.