Power producers in Chile are jostling to retain or grow market share amid the transition from coal-fired generation to renewable energy, say attendees at IJLatam 2020, IJGlobal's Latin America energy and infrastructure conference.

Since last year, when the government announced its plan to shut down the country's 5 GW of coal-fired generation by 2040, generators have rushed to develop large solar and wind pipelines to replace the power produced by their coal-fired assets.

"Most of the new capacity is being deployed by large players," said Cecilia Fullone, director at S&P Global Ratings, pointing to Enel, Engie EnergĂ­a Chile, AES Gener and ColbĂșn.

Engie, AES, and Enel have been among the first to accelerate the unplugging of their coal-fired plants. The three companies have all signed agreements with the government to retire their power plants. In May, Enel decided to bring forward the closure of its 128 MW Bocamina I unit by the end of this year and its 350MW Bocamina II facility by May of 2022 (PFR, 5/29).

Engie has already closed two units of its Tocopilla complex, and expects to shut down the remaining two phases by January of 2022.

AES Gener has also taken steps to close its 558 MW Angamos coal-fired asset as soon as possible without affecting grid stability, ending two power purchase agreements with miner BHP Group. The PPAs will now run only until August 2021, instead of 2026 and 2029 (PFR, 8/10). AES has also agreed to shut down its Ventanas I and II plants in 2020 and 2022.

But as coal is phased out and renewables brought online, firms' market shares are expected to change. "Some are replacing, while others are increasing their market share," explains Fullone.

And with the idea being raised in the Chilean Congress of bringing the phase-out of coal forward to 2025 instead of 2040, the change in market share could be further accentuated. In August, the Environment Commission of the Chamber of Deputies moved forward with a bill to prohibit coal-fired plants in just five years (PFR, 8/5).

But industry insiders are skeptical of the feasibility of this plan, which would involve the replacement of all the power produced by coal plants with solar and wind. "The amount you need to invest in new generation and transmission is massive," points out Fernando Cubillos, investment officer at IDB Invest.

Engie, AES and Enel have all taken steps toward meeting that challenge, however. Engie is aiming to develop a 1 GW portfolio of wind and solar assets, while Enel is targeting 2 GW of new renewable energy by 2022 and AES is developing several projects.

A version of this story first appeared on IJGlobal.