Small-scale distributed generation (PMGD) projects are undergoing a new regulatory phase in Chile. As of May 2026, the segment had reached 3,820 megawatts (MW) of installed capacity , while small-scale generation (PMG) projects added another 476 MW , according to the latest statistical bulletin from the Chilean Renewable Energy and Storage Association (ACERA) .
The data shows that small-scale generation has already reached a level that is difficult to treat as marginal within the Chilean electricity market. With almost 4,000 MW installed , small-scale distributed generation (PMGD) projects have become directly involved in discussions about energy curtailment, systemic costs, price stabilization, and investment signals , especially following regulatory changes that seek to redefine their role in the economic operation of the system.
The official photo from the National Energy Commission (CNE) also reflects this importance. According to data from March 2026, the installed capacity of small-scale generation reached 4,045 MW , of which 3,627 MW corresponded to PMGD ( Small Distributed Generation Projects) and 418 MW to PMG ( Small Distributed Generation Projects). In that report, PMGDs represented approximately 10% of the net installed capacity considered for the system.
This growth explains why the segment became the focus of debate after the publication of Supreme Decree (DS) 32 , which modifies Supreme Decree 125 on coordination and operation of the National Electric System (SEN) .
While the most visible interpretation of the decree was associated with storage, opportunity costs and centralized dispatch , the regulation also incorporates a relevant change for PMGDs : their inclusion in the pro rata criteria when there is not enough placement capacity for all available generation.
Sources in the sector consulted by Energía Estratégica warned that this is one of the most sensitive points of the new framework: “The problem is not that the PMGDs are subject to a cut-off rule, but that this rule does not always seem to distinguish when they are really on equal footing with the large generators.”
The new Article 45 bis establishes that, when there is more than one generation facility, storage system or generation-consumption system with the same production cost and there is not enough placement capacity for all of them, the National Electric Coordinator (CEN) must prorate the generation or injection until reaching the maximum available capacity.
For installations connected to distribution networks, the adjustment will be determined by the CEN (National Electricity Commission) based on operational criteria defined in the standard, or pro rata based on their maximum power in exceptional and justified cases. Furthermore, the decree includes a transition period: adjustments related to installations connected to distribution networks will begin to be applied 24 months after the publication of the administrative act.
The change aims to correct an asymmetry that large generators and customers had been questioning: that utility-scale projects faced cuts due to congestion or oversupply while PMGDs maintained a self-dispatch logic with less exposure to economic limitations of the system.
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However, industry representatives emphasized that the debate isn't solely about whether or not small-scale distributed generation (PMGD) projects should be cut. The more crucial issue is determining when they are truly on an operational level playing field with large-scale generators .
If the energy generated by a small-scale distributed generation (PMGD) exceeds the demand in its distribution area and ends up flowing into the transmission system, the argument for equating it with a utility-scale generator becomes stronger. In that case, both may be competing for the same network capacity and contributing to the congestion that justifies the reduction.
However, if that energy is consumed locally within the distribution network, applying a pro-rata system based on criteria similar to those used for large-scale projects opens up a different discussion. In that scenario, according to market participants, the PMGD ( Small Distributed Generation Project) is not necessarily exacerbating the transmission constraint that causes the spillage. Therefore, applying the same treatment could result in an “unfair” or, at least, “imperfect” regulatory signal.
The tension is not an isolated issue. In recent days, the Independent Energy Generators Association (GIE AG) raised the need to introduce gradual criteria to safeguard investments in Small-Scale Distributed Generation Projects ( PMGD ). According to the association, if the current design of the decrees related to the small-scale regime remains in place, approximately 65% of projects could face difficulties in meeting their financial obligations. The potential impact includes 690 renewable energy plants , more than 20,000 direct jobs , and around US$6 billion in committed investments.
This argument seeks to issue a warning: regulatory modernization may be necessary, but its implementation should not disregard investments structured under previous rules. In a segment intensive in long-term financing, any change in expected revenues, investment priorities, or exposure to cutbacks alters bankability assumptions.
On the other hand, the concerns raised by independent and large energy consumers focus on the stabilized price . The Association of Unregulated Energy Consumers (ACENOR) has once again highlighted this mechanism and called for its elimination, arguing that it generates additional costs for consumers. A study commissioned by ACENOR and the Mining Council, conducted by energiE and PPU Legal, estimated compensation associated with the stabilized price at US$4.65 billion between 2025 and 2043 , with costs passed on to independent customers and, from 2027 onward, also to regulated customers.
This discussion runs in parallel, but it connects with DS 32 because both agendas point to the same core: what benefits the PMGD regime retains, what costs it transfers to the system and under what conditions it should be integrated into the economic operation of the SEN.
For large generators, the inclusion of PMGDs in the pro-rata allocations can be seen as a necessary correction. For customers, it's part of a broader agenda to reduce distortions. For small-scale developers, however, sources linked to the sector warn that it represents a blow to a model that grew under specific regulations and now faces a less differentiated playing field compared to utility-scale developers.
With 3,820 MW installed , the debate no longer allows for marginal interpretations. Any modification to PMGD impacts investments, financing, systemic costs, free market customers, regulated customers, and distributed renewable development .