Colbun - Powering Chile

Posted: 12 Feb 2012

See all articles by Forest L. Reinhardt

Forest L. Reinhardt

Harvard Business School

Gustavo Herrero

affiliation not provided to SSRN

Sanjay Patnaik

Harvard University - Business School (HBS)

Date Written: December 12, 2011

Abstract

This case is about Colbun, Chile's second largest electricity generator, which is facing significant uncertainty regarding the cost and availability of alternative energy sources. Problems with the contracted supply of natural gas and the volatility of oil prices, coupled with regulatory changes made by the government, force Colbun to revise its business strategy and its sourcing mix. New legislation will replace historically regulated electricity prices for certain customers with free market prices and therefore change the conditions under which the company must operate. The case also deals with the pros and cons of various energy sources in view of their perceived environmental impact. As the company's CEO, Bernardo Larrain Matte has to take all these different considerations into account when planning Colbun's future, especially in the light of new opportunities and challenges posed by global climate change. The case analyzes the Chilean electricity sector and the operations of Colbun to illustrate the complexities associated with conducting business under the influence of global energy markets, government regulations, and environmental activism.

Suggested Citation

Reinhardt, Forest L. and Herrero, Gustavo and Patnaik, Sanjay, Colbun - Powering Chile (December 12, 2011). Harvard Business School BGIE Unit Case No. 709-060, Available at SSRN: https://ssrn.com/abstract=2002859

Forest L. Reinhardt (Contact Author)

Harvard Business School ( email )

Cambridge, MA
United States
617-495-6610 (Phone)

Gustavo Herrero

affiliation not provided to SSRN ( email )

Sanjay Patnaik

Harvard University - Business School (HBS) ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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