Narayan AmmachchiChile’s capital of Santiago is currently grappling with power outages, and much of the blame is being put on Enel, an Italian energy company and the main provider of the city’s power grid.
Heavy rains and strong winds from early August caused extensive damage to Santiago’s power lines, leaving about 20,000 households to lead with frequent blackouts, according to reports from the Santiago press.
Thousands of citizens took to the streets to protest the blackouts, demanding a swift resolution.
On August 2, Enel reported that a peak of 794,000 customers in Santiago were affected by power outages, primarily due to fallen trees impacting power lines. Enel serves 2 million customers in Santiago and operates as a “regulated monopoly” in the area.
Chinese power distribution company CGE is also facing challenges in restoring electricity.
The country’s infrastructure has been repeatedly damaged by erratic weather, resulting in frequent power outages. In June, more than 400,000 Santiago residents experienced prolonged power disruptions after a fallen tree severely damaged a high-voltage transmission tower.
Presidential pressures
Enel’s struggles restoring power have prompted Chilean authorities to exert heavy pressures on the company.
President Gabriel Boric publicly sent an ultimatum to Enel last week, threatening to revoke the company’s permison to operate in Santiago.
“I’ve asked our Energy Minister to consider all available sanctions, but also to take a closer look at Enel’s concession,” Boric told the Chilean press.
Even Chile’s Foreign Minister Alberto van Klaveren joined the pressure campaign. The minister recently met with Italy’s ambassador to Chile to discuss the situation. After their meeting, van Kleveren reminded the public that Enel invested US$4.5 billion in Chile between 2019 and 2023.
Enel is the biggest provider of electricity in Chile. It’s struggles keeping the power grid operational have revived the debate on Chile’s overreliance on foreign power companies to keep the lights on. It is estimated that nearly 70% of the country’s electricity is imported.
Enel’s case adds to a wider debate in Latin America about the pressence of foreign energy companies in the region. Mexico, for example, strode to open its energy sector (dominated by a public monopoly for decades) back in the early 2010s. Current president Andrés Manuel López Obrador has attempted to give more control of the energy sector back to the State, arguing that, for the sake of “energy sovereignty”, Mexico should not relly too much on foreign companies to keep the power greed going.
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