Chile Wind Energy Market Size & Share Analysis - Growth Trends and Forecast (2026 - 2031)

Chile Wind Energy Market Trends and Insights

Record-low onshore LCOE drives merchant PPAs

Chile’s onshore levelized cost dropped below USD 30 per MWh in 2024, making wind 40% cheaper than coal or gas and enabling merchant contracts without auction backstops.^{[3]International Renewable Energy Agency, “Renewable Power Generation Costs in 2024,” IRENA.ORG} Capacity factors above 45% in Patagonia and sub-USD 1 million per MW capex from Chinese turbines underpin this advantage. Merchant PPAs now cover 35% of new projects, transferring price risk from utilities to sponsors. AES Andes signed a 15-year merchant deal with BHP’s Escondida mine at a USD 40 floor indexed to copper, aligning energy costs with commodity cycles.^{[4]AES Corporation, “AES Andes Secures Financing for Wind-Storage Portfolio,” AES.COM} Shorter development cycles and creditworthy mining off-takers accelerate installations in the northern corridor.

Green-hydrogen hubs pull wind off-take

Magallanes hosts 16.9 GW of wind aimed at hydrogen, 57% of Chile’s queue, with USD 31.5 billion in announced capex. HNH Energy’s 1.4 GW San Gregorio farm will feed 800,000 t/y green ammonia from 2026-2028 under 20-year Asian contracts. Electrolyzers run at 60-70% utilization, smoothing intermittency and bypassing grid studies. EDF-Enap’s 1.2 GW Cabo Negro hub integrates desalination and port facilities to supply green methanol to shipping lines. Private lines avoid grid congestion, insulating projects from nodal-price volatility and curtailment.

HVDC Kimal–Lo Aguirre de-bottlenecks wind

The 3 GW, 1,500 km HVDC link awarded in 2025 will move stranded northern wind to central demand, removing a 14.5% curtailment rate recorded in early 2024. Voltage-source converters stabilize weak grids and enable reverse power flows. The line unlocks 8 GW of stalled projects and reduces intraday price swings to a 40 USD range. Colbún advanced a 400 MW expansion after the award, showing how transmission certainty converts pipelines to bankable assets.

Floating-wind R&D tax credits

Chile’s 2026-2028 program refunds 40% of pre-commercial floating-wind spending, targeting 50-150 MW pilots off Valparaíso and Biobío. Studies by Mainstream and Equinor found 12 GW of potential, but seismic risk raises insurance premiums, and caps leverage at 60%. Tax credits offset prototype costs and shorten the path to early-2030s commercialization, especially for hydrogen hubs needing coastal proximity.

Nodal price cannibalisation in SIC grid

Curtailment hit 14.5% in Q1 2024 as midday solar forced nodal prices negative in northern nodes, making wind uneconomic and hindering 2.2 GW under construction. Developers renegotiated debt covenants after a 22% revenue drop. Relief hinges on the HVDC line, yet four years of exposure raises required equity returns by 300-400 basis points and delays final investment decisions.

Social-licence conflicts in Biobío & Araucanía

Mapuche communities invoked ILO 169 to challenge EIAs, stalling 500 MW since 2024. Pattern Energy’s Arauco project saw capex rise 8% and permitting extend 14 months after revenue-sharing demands. New 2025 protocols add binding arbitration and 120-day engagement, lengthening timelines by six to nine months and escalating pre-construction costs.

Segment Analysis

By Location: Onshore Dominance Persists Through 2031

Onshore installations represented 100% of capacity in 2025 and will grow at a 21.9% CAGR, reflecting sub-USD 30 LCOE and streamlined permitting. The Chile wind energy market size for onshore projects is projected to reach 19.25 GW by 2031, sustained by a 29.4 GW pipeline and the absence of viable offshore alternatives. Goldwind’s 342 MW Lomas de Taltal, completed in 2024, delivered a 48% capacity factor at USD 950,000 per MW, showcasing cost leadership.

Offshore wind remains pre-commercial. Mainstream and Equinor identified 12 GW of floating potential, yet seismic premiums and supply-chain gaps restrict leverage and inflate LCOE. A 40% R&D tax credit covers prototypes, but full rollout will arrive in the 2030s. Until capex converges, onshore will supply all incremental capacity, cementing Chile’s status as a land-based wind leader within Latin America.

Note: Segment shares of all individual segments available upon report purchase

By Turbine Capacity: Above-6-MW Units Reshape Economics

Turbines up to 3 MW held 44.9% of Chile's wind energy market share in 2025, a legacy of 2014-2022 fleets using Vestas V110-2.0 MW models. However, the above-6-MW segment is forecast at a 28.2% CAGR as developers deploy Goldwind 7.5 MW and forthcoming Vestas V172-7.2 MW platforms, cutting balance-of-system costs 12-15%. The Chile wind energy market size for these large units is expected to surpass 8 GW by 2031.

Mid-range 3 to 6 MW turbines grow at the market average, favored by developers prioritizing proven logistics. Sub-3-MW units will focus on repowering where existing grid connections remain. Larger turbines require specialized cranes and transport, yet higher energy yield offsets logistics cost, driving fleet migration toward above 6 MW ratings.

By Application: Commercial-Industrial Growth Outpaces Utility-Scale

Utility-scale projects accounted for 90.4% of installed capacity in 2025. The segment adds bulk volume through 500 MW-plus farms contracted to miners and hydrogen hubs. The commercial-industrial niche will rise at a 27.5% CAGR through PMGD rules that exempt <9 MW projects from dispatch and transmission fees. BHP’s 7.5 MW Escondida turbine is locked in USD 32 per MWh behind-the-meter, underscoring the economics.

Community projects remain under 1% due to limited finances. Utility-scale still leads absolute megawatts, but industrial self-supply grabs the fastest growth as firms bypass grid volatility and secure cost savings, elevating diversification within the Chile wind energy market.

Note: Segment shares of all individual segments available upon report purchase

Geography Analysis

Northern Antofagasta, Atacama, and Tarapacá host 4.2 GW of pipeline aimed at mining loads that consume 2.8 GW, supported by copper-indexed PPAs. Capacity factors exceed 45% yet curtailment spiked to 14.5% in 2024. The HVDC link will move 3 GW south, unlock 8 GW now stalled, and compress price swings.

Central Santiago-Valparaíso absorbed 38% of 2024 wind generation. Enel’s Sierra Gorda Este and Colbún’s Horizonte supply fixed-price contracts around USD 42 per MWh, giving utilities firm capacity toward Chile’s 80% renewable target. Mapuche consultations in adjoining regions delay over 500 MW, adding 6-9 months to permitting.

Magallanes in Patagonia holds 16.9 GW pipeline, 57% of the total, for export hydrogen. HNH’s San Gregorio and EDF-Enap’s Cabo Negro pair wind with electrolyzers and port infrastructure, avoiding the national grid and reaching 50% capacity factors. Remoteness lifts capex 20-25% yet isolates projects from curtailment, illustrating a bifurcated Chile wind energy market anchored by domestic demand in the north-central belt and export-oriented hubs in the far south.