December 23, 2025

The rise of distributed energy resources such as solar rooftops, electric vehicles, and heat pumps, the emergence of new business models like demand aggregators, and the increased competitiveness of technologies for electrifying and digitizing energy-intensive activities are redefining the sector. Although the electrification of transportation and heating is just beginning, it promises to transform energy management, giving consumers a leading role in generating and managing their energy.

These advances present strategic challenges and opportunities for Chile, allowing it to reposition energy as an engine of development and investment. In this scenario, the reliability, security, and resilience of the electrical system are key concerns. However, current regulations are outdated in the face of technological changes, hindering the integration of these innovations. Furthermore, the erosion of public trust and the legitimacy of the electricity sector due to supply disruptions, such as the blackout of February 2025, or extreme weather events like those of August 2024, and delays in the expansion of the transmission network have strained the system’s operation and highlighted its operational and regulatory limitations. Added to this is the tariff controversy, which has deepened public concern. This has been exacerbated by a weakening of the technical capacities of the key agencies for the proper functioning of the energy sector.

Recently, the UAI Center for Business Solutions for Development (SEDE), in conjunction with Icare and with the support of the UAI Center for Energy Transition, developed the dialogue and working cycle “Growing with Energy,” which brought together a diverse group of leaders and experts who prioritized two fundamental and urgent proposals to be implemented concurrently.

First, a reform of the distribution system that improves the quality of service by reducing the frequency and duration of supply interruptions. This reform must combine short-term adjustments that incentivize investment in digitalization, grid quality, and resilience with measures that facilitate the integration of distributed energy resources.

Secondly, it is crucial to restore trust and review the institutional design of the electricity sector. Recent errors in tariff calculations have raised public awareness of the need for stronger and more technically capable institutions. This review is necessary to advance all the sector’s technical reforms.

The group also identified other pending reforms, such as the modernization of the wholesale market, which is a technical priority, but its implementation appears complex. It also proposes expanding and strengthening green tax instruments to more sectors of the economy, beyond the electricity sector, gradually reducing tax benefits for diesel in transportation, and selectively investing in distribution networks where the social return is high and which enable electromobility and electric heating.

Only in this way can we ensure a sustainable and reliable energy future for Chile.