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Chile passes major legislation incentivizing energy storage, e-mobility

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Chile's congress has unanimously approved a bill promoting investments in energy storage and electric mobility in the country. The legislation is aimed at addressing power transmission congestion and assist in closing of all coal power plants by 2030s. 

The energy and mining committee in the upper house of Chile legislature voted unanimously in favor of the energy storage and electro mobility bill early this month. 

The public bill authorizes capacity payments for standalone storage systems that provide power or function as spare capacity. It facilitates intermittent renewable energy to be stored and dispatched during peak periods or at night providing flexibility and security to the system.

On e-mobility front, the bill exempts electric vehicles from annual road taxes for two years. The exemption would cover 75 percent of road taxes in years three and four, 50 percent in years five and six, and 25 percent in years seven and eight, as reported by Argus Media

The legislation will also allow EV owners to use their car batteries to participate in the electricity market, incentivizing the adoption of electric vehicles. Owners would be remunerated for using the battery of their vehicle for storage and injecting electricity into the grid.

Chile has committed to achieving net-zero carbon emissions by 2050, which will require an outlay of billions of dollar, including an estimated US$30bn in generation, transmission and storage alone.

Chilean power generators have welcomed the draft legislation which signals strong efforts by the country towards decarbonization.

Claudio Seebach, executive president of local power generation association Generadoras de Chile said: "Storage allows management of the variability of solar and wind power, supporting large-scale integration of solar PV and wind, opening the door for the responsible retirement of coal. In addition, it permits a reduction in congestion that generates dumping of renewable energy, and optimizes investment in the transmission network."

A rapid build-out of renewable energy plants in Chile's north has contributed to grid congestion. A major new HVDC power line, a system used to interconnect two substations with different frequencies, is to be operational by 2030. It is expected to help dispatch output efficiently. Energy storage units are essential to the success of the entire set-up.

From January-September, more than 748GWh of electricity was dumped because of transmission bottlenecks. An essential feature of the bill allows remuneration for power injected into the grid by pure storage projects, that is, those not linked to a generation plant.
Author : Kathy Priyo
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