Privatization now is expected in late 2000 at the earliest. The severe drought that gripped Chile from late 1997 until well into 1999 hobbled the country's electricity sector. Chile's capital city, Santiago, experienced rolling blackouts from November 1998 until May 1999. As a result, Chile now is working to diversify its electricity generation sources. Natural gas is expected to become an increasingly important electricity source in coming years.
Unscheduled blackouts can be frequent in Chile, especially in the northern grid.
The Nopel plant has been restricted to operating at two-thirds of capacity in the wake of major blackouts in late February 2000. Nopel has been found to be in violation of new generation rules, introduced in December 1999, limiting the output of any individual generator. Nopel believes it will take six months to modify the plant's system to meet regulations. Over the past decade, Chile completely privatized its electricity industry and unbundled the national generation, transmission, and distribution systems. Coal consumption, most of which is imported, is expected to decline in favor of natural gas in the coming years.