Chile government to expand power planning, auction role

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Chile must incentivize investment in transmission projects and reform its power auction regulations, according to the new head of the country's national energy commission (CNE), Andrés Romero.

The government will assume a more active role in both, according to Business News Americas.

Transmission planning must reflect the new reality that power sources will be built where the resources are found, Romero said, which will not always be near the largest population centers.

CNE and the energy ministry (Minenergía) plan to submit a package of transmission reforms to congress in May 2015, designed to facilitate projects and improve bottlenecks on the country's interconnected system.

The government will also push for interconnection of the central SIC and northern SING grids by 2020, he said.

In two weeks, the ministry will submit a package of regulatory reforms for power auctions, which will now be run by CNE instead of power distributors. The average price of $130/MWh obtained in the country's last round is "unacceptable," the commission head said.

The legislation will be designed to ensure long-term power contracts, which have steadily decreased, while demand has gone up. The government has declared the most recent auctions, in which generators showed little interest, null and void, Romero added.