A Chilean appeals court ruled in favor of a motion introduced by a fishing group to halt development as the project would adversely affect the environment.
According to the motion, the project would also damage the Humboldt Penguin national reserve and the Llanos de Calle National Park.
The $1.4bn Punta Alcalde project was undertaken to support the power needs of a growing mining industry in the region.
Endesa, meanwhile, stated that the decision of the summer Appeals Court of Santiago had no practical effect on the project.
Construction work on the plant has not yet begun and the company currently awaits environmental approvals.
"Endesa Chile became a party to the appeal for protection and will provide, during the processing of the latter, all legal, factual, environmental and technical arguments that support the Punta Alcalde project’s environmental rating," the company said in a statement.
