Chile’s electricity marginal cost falls to US$3.4 per MWh, its lowest since 2002, and curtailment reaches 25.5%

The marginal cost of electricity in Chile has hit its lowest level in more than two decades. In the week of 12 to 18 October 2026, the average at the Polpaico busbar, in the Santiago Metropolitan Region, was US$3.4 per megawatt-hour (MWh), the lowest weekly value since June 2002, when it fell to US$1.7/MWh, according to DNV’s Power Markets Weekly report published on 23 October.

The figure is 62.8% lower than the previous week and 89.8% lower than the same week of 2025. The consultancy attributes the drop to a combination of high availability of renewable energy and a lack of transmission capacity: there was so much solar and wind power that for much of the sunlit hours the system had nowhere to send it.

The flip side of the low price is curtailment, the energy that power plants could produce but that the system orders them to cut. In that same week, 25.5% of the available solar and wind generation was lost, 6.9 points more than the previous week.

The marginal cost is the cost of producing the last MWh the system needs in each hour and at each point of the grid. Chile’s National Electricity Coordinator dispatches the cheapest plants first; when the sun and wind are enough to cover demand, the marginal plant is a renewable one with no fuel cost and the price falls to zero. This is how the week ended at the six busbars that DNV tracks:

Source: DNV, Power Markets Weekly Chile, vol. 13, no. 14, week of 12 to 18 October 2026. A week has 168 hours: in almost half of them (74), electricity cost nothing across most of the country, and at Charrúa the figure was 90 hours.

The exception was Puerto Montt, at US$83.4/MWh. The 220 kV Lastarria-Ciruelos line was congested for almost the whole week and separated that area from the rest of the system between Tuesday and Friday. Isolated, its price was set alternately by local diesel plants and southern wind farms. The 500 kV Charrúa-Ancoa line was also congested on Monday and in the early hours of Sunday, which lowered prices from Charrúa southwards.

How it compares with previous weeks

Autumn 2026 saw much higher prices. In the week of 27 April to 3 May, the Polpaico average was US$45.7/MWh, with spikes above US$160/MWh on Monday evening, according to DNV’s report for that week. Spring brings more hours of sunshine, snowmelt for hydroelectric plants and wind, while demand has not yet risen with summer air conditioning:

The values for October 2025 and for the week of 5 to 11 October are Energía Futura calculations based on the percentage changes reported by DNV (-89.8% year on year and -62.8% week on week); the report does not publish those absolute figures.

The low price and curtailment are two sides of the same phenomenon. When transmission lines fill up, the plants on the congested side must cut their output. In the week analysed, the cut was much larger for solar power, which is concentrated in the north and produces at the same hours:

Source: DNV, Power Markets Weekly Chile, week of 12 to 18 October 2026. As a reference, the 231.5 GWh lost in seven days equals one month’s consumption of more than 1.1 million households using 200 kWh a month, an Energía Futura calculation.

Batteries helped, but not enough. BESS systems injected 118.8 GWh during the week, 11.2 GWh less than the week before, and at their peak, at 9 p.m. on Sunday, they covered 26.3% of the country’s generation. Peak demand was 10.9 GW, on Friday at 10 a.m., and in that hour solar and wind supplied 57%.

For solar plants selling on the spot market, the result was harsh: their capture price, the average price received for each MWh actually injected, was US$0.1/MWh at the five busbars between Crucero and Charrúa. Batteries that charged at midday and discharged at night captured between US$5 and US$10.6/MWh on discharge, according to DNV.

The week was extreme, but the year-to-date figure shows an improvement. According to the September statistical bulletin from ACERA, Chile’s renewable energy and storage association, 3,546 GWh of solar and wind energy were curtailed between January and September 2026, 4.6% less than in the same period of 2025. The association takes the figure from the Coordinator’s executive operating summary as of 30 September.

Up to July, cumulative curtailment was running 1.6% above 2025; August and September reversed the trend, according to the ACERA note reported by Electrominería. The 2025 figures depend on the source: ACERA calculates 6,084 GWh, while a Deloitte study put it at 6,205 GWh, as we explained in our article on transmission and curtailment.

Source: ACERA, statistics bulletin for September 2026, updated on 1 October. Of the storage under construction, 76% is paired with solar plants and 24% is stand-alone batteries. ACERA notes that the data do not allow the drop in curtailment to be attributed solely to batteries.

Batteries already carry weight in generation: in September they supplied 7.9% of the system’s energy, as we detailed in our article on the contribution of batteries. The Kimal-Lo Aguirre direct current line, which will link Antofagasta with the Santiago Metropolitan Region, is the other bet for moving energy out of the north.

For households, the fall in the marginal cost does not translate into an immediate drop in the bill. Regulated customers (homes and small businesses) pay for energy at prices set in long-term contracts that distribution companies signed in supply auctions, plus transmission and distribution charges. The marginal cost is the price of the short-term market, where generators buy and sell energy among themselves.

Those who do feel it are free customers with contracts indexed to the marginal cost and the generators: those that hold contracts and must buy energy on the spot market to meet them gain from low prices, while those selling their output without a contract lose. For regulated bills, what lies ahead is an average reduction of 4.3% from January 2027, according to the preliminary CNE figures we reviewed in our article on electricity bills in 2027.

Zero prices are also an investment signal: they show that the system needs more transmission and storage to move cheap energy to the hours and places where it is needed. With summer, demand rises due to air conditioning and snowmelt declines, so the marginal cost usually rises in the following months.

What is the marginal cost of electricity?

It is the cost of producing the last MWh the system needs in a given hour and at a given point of the grid. It is set by the most expensive plant in operation. When demand is covered only by solar or wind power, the marginal cost falls to zero.

What was the marginal cost at Polpaico in October 2026?

In the week of 12 to 18 October, the average was US$3.4/MWh, the lowest since June 2002, according to DNV.

Why is so much renewable energy curtailed?

Because transmission lines cannot carry all the solar and wind energy from the north and south to the centre of the country during peak production hours. In that week, 25.5% of the available solar and wind generation was lost.

Does the electricity bill fall when the marginal cost is zero?

Not directly. Regulated customers pay prices from long-term contracts. The effect reaches free customers and generators.