The reform fundamentally changes how project revenues are settled by linking stabilized prices to future settlement adjustments, thereby increasing exposure to cash flow timing and market-like risks.
The Chilean government has introduced a significant change in the remunation scheme for PV plants operating under the so-called Pequeños Medios de Generación Distribuida (PMGD) scheme, which supports solar and other renewable energy plants with capacities of up to 9 MW and provides access to stabilized feed-in tariffs.
The new provisions define how revenues from these projects, particularly those incorporating energy storage, are settled. According to an analysis by Norwegian consulting firm DNV, amendments to Supreme Decree 88 formally incorporate the MEP Balance (Saldo MEP), an economic settlement mechanism associated with the Price Stabilization Framework.
Previously, PMGD plants were compensated based on either the stabilized price or the marginal cost. Under the new framework, price stabilization remains in place, but revenue calculations are now based on a reference energy price adjusted by the MEP Balance. DNV emphasizes that this change represents more than a simple pricing update; it fundamentally alters how project revenues are realized and managed.
