Adaptation and evolution of policy processes to support an emerging renewable market: The case of distributed generation in Chile

Abstract

The transition from centralized energy systems to decentralized ones, relying more on distributed generation (DG), remains a complex political process with unresolved policy discussions. The process is also characterized by the emergence of new and diverse policy configurations for DG in many countries. This study aims to analyze the emergence and evolution of the policy process related to policy instruments for the development of a DG market in Chile as a country case study. Chile's policy approach to renewable energy development has been branded as “renewables without subsidies,” with a policy rationale focused on removing barriers to renewable energy participation in a competitive energy market, while avoiding the use of any type of direct government incentives. Using a multi-method qualitative approach, we analyze how the political relevance of DG, policy objectives, and learning processes shaped the DG sector in Chile. We also discuss how the opportunities and resistance presented by various actors in policy processes influenced the emergence and transformation of DG policies. The findings of the study reveal that the policy process for DG is marked by nonlinear, contested development and complex conflicting goals and actions. Some differences in policy directions — such as creating new rules to enable the development of new markets for DG and adapting existing rules to allow DG technologies and new actors to operate within current markets — are partially resolved through the adoption of specific policy instruments, which shape the policy mix.