What Chile's Megadrought Teaches Us About Energy Resilience

What Chile's Megadrought Teaches Us About Energy Resilience

Chile produced 5.6 Mt of copper in 2025, 27% of global supply. When the Chilean grid has a tough year for clean electricity, does the carbon intensity of copper supply spike?

The megadrought that has gripped Chile since 2010 intensified in 2025. National grid operator Coordinador Eléctrico Nacional (CEN) recorded water inflows below 93.8% of recorded years, confirming one of the worst drought conditions in Chilean recorded history.

Hydropower accounts for 19% of Chile's generation capacity. In 2025, CEN reported that generation from hydropower fell 22% year-on-year. The gap was filled by primarily by coal and natural gas, pushing Chile's grid emissions factor up 19%, from 0.21 to 0.25 tCO₂e/MWh. Yet Skarn's data shows that Scope 2 emissions intensity for Chilean copper miners increased by only 3%.

Why the disconnect? Because miners have been decarbonising their electricity supply for years. Skarn’s data indicates that 67% of Chilean copper production originates from sites sourcing renewable electricity, up from 50% in 2018. Through PPAs and direct procurement, a large share of the industry has insulated itself from grid volatility.

Many of Chile's copper operations sit in the north, where solar and wind generation is concentrated. These operations are not dependent on long distance transmission to access renewable power. Importantly, the renewable contracts driving this decoupling are predominantly solar and wind based, not hydro. When drought reduces hydropower output, as it did sharply in 2025, it does not directly threaten the renewable electricity supply that miners have contracted. If anything, the key challenge in northern Chile is the opposite of scarcity: so much solar and wind energy is being generated that 6,084 GWh was curtailed in 2025 simply because the grid could not absorb it all. As of 2025, a pipeline of over 6,400 MW of battery storage is in the process of being connected. Concentrated in the north, this capacity will extend the usability of surplus renewable generation, strengthening the reliability of supply for 24-hour operations. The HVDC Kimal-Lo Aguirre line expected in 2029 will debottleneck that northern surplus for the rest of the country.

Chile's copper sector is not merely insulated from grid volatility. In the north, miners are operating in a structural renewables surplus. The decoupling is not a future ambition. For much of the industry, it is already the reality.

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