The possibility of exchanging electricity between Chile and Peru is gaining momentum again in a scenario marked by significant differences in wholesale prices between the two markets. While northern Chile experiences marginal costs close to zero dollars for many hours of the day and high levels of renewable energy inflow, the Peruvian system faces considerably higher prices, a combination that reinforces the economic appeal of a binational interconnection.
In this context, EnorChile Transmisión SpA submitted the Los Héroes–Parinacota 2x220 kV Power Line project, Section CL, for environmental assessment. This initiative involves an investment of US$30 million to develop transmission infrastructure between the Chilean city of Arica and the border with Peru, with a planned connection to Tacna.
The proposal envisions a double-circuit transmission line approximately 22 kilometers long with a maximum transmission capacity of 250 MVA, designed to connect Chile's National Electric System (SEN) with Peru's National Interconnected Electric System (SEIN). The infrastructure would enable electricity exchanges in both directions, subject to the established technical and commercial conditions.
This progress comes at a particularly significant time for both markets: according to industry data, the average marginal cost in northern Chile was US$8.8/MWh in October, compared to US$137.7/MWh recorded in September at the Los Héroes substation in Tacna, according to information attributed to the Economic Operation Committee of the National Interconnected System (COES). This represents a difference of approximately 15.6 times between the two benchmark values, although they correspond to different periods.
A price gap that opens up opportunities for electricity swapping
The gap between the marginal costs of Chile and Peru is one of the main economic arguments for advancing greater regional energy integration.
According to the sector figures shared, northern Chile recorded an average marginal cost of US$8.8/MWh during October, with 44% of the hours at zero. This behavior reflects the difficulties in utilizing all available generation capacity, especially during periods of high solar production and constraints in evacuation capacity.
On the other side of the border, the picture is different. In September, the Los Héroes busbar, located in Tacna, reached an average marginal cost of US$137.7/MWh, while since July the marginal cost of the Peruvian system as a whole has been around or above US$100/MWh, according to the cited sector data.
This difference presents an opportunity for the low-cost energy available in northern Chile to find demand in Peru, potentially contributing to improved use of renewable resources and reduced supply costs under certain operating conditions.
However, the price gap does not automatically equate to the savings that interconnection could generate. Its realization will depend on the effective transfer capacity, transmission constraints, electricity losses, the hourly availability of surplus energy, and the rules governing international transactions.
Chile has accumulated more than 7400 GWh of renewable energy spills
Another factor that makes the project especially relevant is the volume of solar and wind energy that Chile is unable to incorporate into the electrical system.
According to industry data, in the last 12 months there were 7,416 GWh of solar and wind power generation discharged, a magnitude that highlights the challenge of integrating a growing renewable capacity with the necessary transmission infrastructure and flexibility.
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The problem is also evident in more recent periods. During the week of October 5-11 alone, 141 GWh of renewable energy were fed into the grid, of which 130 GWh came from northern Chile. That is, approximately 92% of the weekly total was concentrated in that region.
In this scenario, an interconnection with Peru could constitute a complementary alternative to take advantage of some of those surpluses, by opening a new possibility of exporting at times of high renewable generation.
However, the planned infrastructure alone would not be sufficient to absorb all current discharges. Its contribution will depend on the alignment between Chilean surpluses and the Peruvian system's import needs, as well as the operating conditions of both markets.
Details of the interconnection between Chile and Peru: 220 kV and an investment of US$ 30 million
The project presented by EnorChile contemplates the construction of a 220 kV double circuit transmission line, which will extend from the vicinity of the Parinacota Substation, in Arica, to the Peruvian border, to allow its connection with the Los Héroes Substation, located in Tacna.
The infrastructure will have a maximum total capacity of 250 MVA and will have a mostly overhead layout, although it will incorporate an underground section to adapt to the conditions of the territory.
One of its central components will be the construction of a new Electrical Converter Substation, whose function will be to allow the coupling of the electrical systems of both countries through the frequency conversion necessary to operate the interconnection.
This installation is crucial due to the frequency differences between the national grids: Chile operates at 50 Hz and Peru at 60 Hz. Therefore, the connection requires specialized infrastructure to enable the safe and controlled exchange of electricity.
Regarding the timeline, the company projects to begin construction in January 2028, with an estimated 30-month construction phase. The project will employ 166 workers in the construction of the converter substation and another 55 in the assembly of the transmission line.
The initiative entered the Environmental Impact Assessment System (SEIA) through an Environmental Impact Statement submitted on October 13, 2026 and is in the admission stage, so it still needs to pass the corresponding regulatory stages before moving towards its materialization.
Thus, the Los Héroes–Parinacota interconnection begins its processing at a time when economic signs seem to reinforce the interest in connecting both markets: renewable surpluses and low marginal costs in northern Chile versus significantly higher prices in southern Peru.
The opportunity will lie in transforming that potential complementarity into effective energy exchanges, with benefits for renewable integration, security of supply and the efficiency of the electrical systems of both countries.