The Future Is Flexible: Why Chile’s Grid Shift Matters to Tech and Investors

Chile has come a long way in its renewable energy journey—and 2025 marks a major milestone. Just a few years ago, less than half of the country’s electricity came from clean sources. Now? Nearly 70% of Chile’s power is generated from wind, solar, and hydro. Solar and wind alone hit record highs last year, making up around a third of all electricity, with a big spike in December. On top of that, Chile’s installed energy capacity is now more than 50% renewable, driven largely by solar (30%) and wind (14.5%). The country’s solar sector alone provides over 22% of total power—putting Chile at the top globally. And it’s not stopping there—massive battery storage projects are being rolled out with a large pipeline of projects in the works.

Chile’s rapid shift toward renewables requires a smarter, more flexible electricity system. Late in 2024, the Ministry of Energy, alongside Universidad de Chile’s ISCI and Imperial College London released a report with the goal to evaluate how demand-side flexibility—i.e., managing when and how electricity is used—can reduce the cost and complexity of decarbonizing the grid.

What is Demand-Side Flexibility?

Imagine this: your electric car charges at night when solar power is no longer flowing but demand is low. Your air conditioner chills your home when renewable energy is most abundant. Your business shifts energy use to avoid high-demand hours—all automatically. Now multiply that by a million homes and businesses.

That’s where Demand-Side Flexibility comes in. Instead of only adding more batteries or power lines, what if we could adjust when and how we use electricity?

Key Insights from the Report

• It works. Really well. If we embrace demand flexibility, Chile could save up to $1.9 billion USD per year by 2050 in system costs.
• Less need for mega projects. With smarter demand, we don’t need to overbuild expensive storage or transmission lines. We use what we already have, better.
• Cleaner air, smaller footprint. Flexible demand helps make the most of our renewable energy. By shifting electricity use to when solar and wind are most available, we reduce waste, cut back on fossil fuel reliance, and avoid curtailing clean energy. It’s a smarter way to balance the grid—keeping the lights on even after the sun sets, all while shrinking our carbon footprint.
• It turns out your car charger, your heater—even your business—can play a big role in cleaning up the grid. The report shows that electric vehicles could shift up to 80% of their charging to off-peak times, heating and cooling systems can be up to 35% flexible, and even industries could shift about 10% of their power use. And when it comes to hydrogen production—especially for export—it’s one of the most flexible uses of all. Every bit helps.

Investments Required by 2050 

• More Renewables, Smarter Storage – Chile’s clean energy future needs a big boost in solar and wind—five times more than we have today. Offshore wind could help ease pressure on the main transmission lines, and energy storage (like big battery systems) will play a key role. Depending on how flexible demand becomes, storage needs could grow up to 30 GW—10 times what we have now. There’s also a big opportunity in distributed energy, like rooftop solar and home batteries, especially if regulations allow users to feed energy back to the grid.
•  Building the Grid of the Future – To handle all this renewable energy, Chile will need to double its transmission capacity between regions and invest heavily in local distribution networks. As more homes and businesses adopt solar and electric vehicles, the grid needs to be smarter and more digital—allowing for real-time energy flow and better coordination. Smart grids unlock the full potential of demand flexibility, making the whole system more efficient and resilient.
• Power to the People (and Their Devices) – There’s real potential for everyday tech to support the grid. From HVAC systems and lighting, to EV chargers and smart appliances, consumers can invest in tools that let them shift their energy use—and even get paid for it. Especially in industrial and commercial buildings, automation and demand-response systems turn energy use into something that can be optimized and monetized.
• Big Savings on the Table – Here’s the headline: if Chile embraces demand-side flexibility, the country could save about $2 billion USD per year in system costs. That means fewer mega-projects, better use of what we already have, and a cleaner, cheaper path to carbon neutrality.

Conclusion

Chile’s roadmap to 2050 is ambitious—but achievable with the right investments in place. The study makes it clear: reaching carbon neutrality and building a reliable, affordable, and sustainable energy system will require massive growth in renewable generation, particularly solar and wind, alongside major upgrades to storage and grid infrastructure. But it also highlights a smarter, more cost-effective path: by embracing demand-side flexibility, we can reduce the need for costly infrastructure and make the most of what we already have.

This presents a huge opportunity for public and private investors, both local and international. Whether it’s utility-scale renewables, battery storage, smart grid technologies, or consumer-focused automation and energy management systems—Chile is building the foundation for a cleaner energy future, and the door is open for those ready to contribute. The country is open for business. 

Ax Legal helps industrial technology, engineering, and service companies to navigate the legal and commercial aspects of operating their business in Latin America. With deep knowledge of the industrial and natural resource sectors, we provide actionable and practical advice to help streamline our clients’ entries into Latin America, improve how they operate in the region, and to protect their interests.

Over the years, our team of legal and commercial advisors have developed a track record of working with companies of all sizes from Australia, Canada, the U.S., and Europe. The one common factor that connects our clients is that they are leaders in their field, providing innovative technologies and services to the industrial sectors.

To better understand how we can support you in the Region, please contact Cody Mcfarlane at cmm@ax.legal