Analysis of rural electrification policy formulation in Chile: Key policy challenges for developing rural electrification based on off-grid systems

Abstract

Over the last decades, different regulatory reforms have played an important role in designing successfully public policies for rural electrification. One of the key aspects of such reforms was the introduction of market-based reforms in the power sector. In this context, this research analyzes the case of Chile, focusing on how its market-based reforms influenced the design and implementation of rural electrification policies and the main factors that have contributed to their success. The analysis is based on a set of interviews with actors directly involved in rural electrification policymaking, alongside an extensive analysis of the existing evidence in the academic literature. Chile was a pioneer in the implementation of liberalization reforms in its power sector and has also been recognized for its effective policies in rural electrification in Latin America. However, the advances have been mostly accomplished through grid extensions, limiting the access in more isolated rural zones. As a result, there are still significant challenges for the development and implementation of more effective rural electrification policies. In this context and based on the analysis of the interviews and the evidence in the literature, the paper discusses the role that can play on off-grid PV and wind systems, a resource available in most of the Chilean territory.