How Far Can BESS Continue to Contribute in Chile? Coordinator Warns of Potential Saturation

Chile is grappling with the integration of rapidly expanding battery storage capacity, with 5,130 megawatts of battery energy storage systems (BESS) currently under construction and an additional 3,125 megawatts already operational. Ramón Castañeda, the executive director of the National Electric Coordinator (CEN), raised a critical question that extends beyond current dispatch operations: how the contribution of these assets will evolve as new projects come online.

Speaking at the Future Energy Summit (FES) Chile 2026, Castañeda warned that the system may reach a point of saturation. “It could reach a moment when this possibility, or this benefit, begins to saturate, begins to stop increasing,” he stated, referring to the BESS capacity to recover renewable generation that would otherwise be curtailed.

The executive noted that the expansion pace observed over the past year could persist for another 12 to 18 months, based on the portfolio of planned installations. This trajectory presents immediate challenges for the management of the National Electric System (SEN).

“In the short term, we are focused on operations, on ensuring that this is integrated in an increasingly effective manner,” he affirmed.

According to the latest data from the Chilean Association of Renewable Energies and Storage (ACERA), the country had 3,017 MW and 13,735 MWh of batteries under testing as of the end of September 2026. In terms of energy capacity, operational systems reached 13,555 MWh, while projects under construction totaled 22,123 MWh.

The deployment of these facilities coincides with a decline in renewable energy curtailment. From January to September, solar and wind curtailment accumulated 3,546 GWh, a 4.6% decrease compared to the same period in 2025, according to ACERA. However, this trend cannot be attributed solely to BESS technology, as generation, transmission, and demand conditions also play a role.

Castañeda noted that one of the initial outcomes of integrating these systems has been the utilization of electricity that was previously wasted, a shift already visible in daily dispatch curves.

He explained, however, that as the volume of energy shifted to other hours increases, the margin for achieving additional benefits through this mechanism may diminish.

The warning does not imply that battery systems will lose their utility, but rather that the recovery of surplus energy may no longer be sufficient to account for their entire economic and operational contribution. As a result, other services will gain greater importance in sustaining project outlooks.

The head of the CEN pointed to international experience to explain how the business model for energy storage could evolve under these conditions.

“Assets are beginning to incorporate other types of revenue, such as ancillary services,” he noted, referring to services that contribute to the security and stability of the electrical system.

“From the perspective of customer offerings, this hybridization or blending of batteries with variable renewable assets is also beginning to occur,” he added. This combination allows for the backing of supply contracts and facilitates project financing, reducing reliance on revenues associated with hourly dispatch.

The transmission grid is also integrating new solutions.

Beyond their commercial applications, energy storage is increasingly being integrated into electrical infrastructure planning, particularly in regions facing constraints on power transmission.

"In practice, this is already happening," Castañeda stated when asked about the possibility of considering batteries as an alternative to specific transmission projects, rather than merely as a complementary measure.

He cited the existing limitations south of Valdivia as an example, noting that the National Energy Commission (CNE) has evaluated projects incorporating these systems to support available facilities.

One key document is the preliminary proposal for Necessary and Urgent Works, published on October 7, which includes a 200 MW, 400 MWh battery energy storage system at the Tineo substation. The project aims to strengthen the security and reliability of power supply south of the Cautín substation.

The portfolio also encompasses the capacity expansion of the 2x66 kV Lastarria–Loncoche line. These two interventions represent a combined reference investment of USD 77.1 million, under a mechanism designed to accelerate solutions for needs that cannot wait for standard planning timelines.

“We will likely see more of that in the future,” the executive director predicted, also highlighting the potential of artificial intelligence and so-called grid enhancing technologies to optimize flows on existing lines.

However, he clarified that these alternatives must be evaluated under a criterion of technological neutrality, taking into account both future supply needs and the continuity standards required of the system.

“Rather than focusing on a single technology, because it might look like we are choosing, we need to maintain a neutral perspective,” he stated.

In that vein, he revealed that the Coordinator is working to expand its analytical capabilities to incorporate a greater number of scenarios within the available timeframes.

“We expect that as early as next year, we will begin to see additional capabilities beyond what we have traditionally had,” he stated.

Consequently, 2027 emerges as a key horizon for refining planning and operational mechanisms, running in parallel with the integration of new facilities. These additions will require leveraging batteries not only to absorb renewable energy surpluses but also to provide other services and strengthen the electrical infrastructure.