Spotlight: Large renewable projects bolster Chile pipeline with US$1.7bn investments

A flurry of large and small-scale renewable projects totaling US$2.6bn in new investments have been filed for environmental approval in Chile over the past month.

According to environmental agency SEA, eight large-scale projects were presented in April for a combined investment of US$1.68bn, together with 93 smaller projects totaling US$954mn.

The news highlight the strong acceleration of renewable development in Chile as the country’s early-works pipeline balloons and becomes the largest in Latin America.

A previous BNamericas analysis showed that Chile has come to have the region’s biggest early-works pipeline and the second largest pipeline after Brazil for those that are in construction.

In terms of annual additions, 2021 is already turning into an unprecedented year as Q1 additions matched the entirety of the capacity added in 2020, which was then the largest Chile had seen. According to local renewables trade group Acera, the country is poised to add 5GW of renewable capacity this year, more than triple what it added last year.

In recent years, the average cost of renewable plants has fallen below the once-coveted ratio of US$1mn per installed megawatt. And new early-works projects, which aim to be built over the next decade, are often significantly below this ratio, sometimes even when including a more expensive battery storage component.

The smaller projects are being developed under a special regime known as PMGD, which groups renewable generators of up to 9MW that connect directly to the distribution network.

Here we take a close look at the eight large-scale projects.

Sol del Loa

This US$480mn project modifies one that was approved back in 2012 to update it to current market realities. 

The project involves building a 640MW solar park as well as battery storage with capacity to store 10,400MWh in northern Antofagasta region. In terms of related infrastructure, the project requires a substation and a 10.9km transmission line.

It will be built in two consecutive phases, with 448MW coming online first and the remaining 192MW being built afterwards. In total, construction is expected to take four years.

Sol del Loa is being carried out by Generadora Metropolitana, a JV between Chilean firm Andes Mining & Energy and French utility EDF. Last year EDF won a concession from the ministry of national assets to build a 296MW renewable project on public lands.

San Pablo

The US$50mn wind farm project is looking to install seven turbines in southern Los Lagos region for a total capacity of 39.2MW. The plan is to inject an average of 76GWh into the national grid, according to the project’s environmental filing.

It will also involve the construction of an underground transmission line connecting the turbines, an increasingly common feature in new projects being filed. Underground lines are more costly but less harmful to the environment.

The project belongs to Germany’s Energy Kitchen, which last year also unveiled plans to build the US$156mn Cabrero wind farm in center-south Biobío region.

Pelequén

This US$140mn project, owned by Miami-based Sonnedix, will build a 175MW solar park through the installation of 291,992 solar panels, a substation and a 6.5km transmission line in center-south O’Higgins region.

Its lithium battery system will store 200MWh, which according to the environmental filing would allow it to inject energy as a 50MW power plant would for up to four hours.

The project’s construction is expected to start in the second quarter of 2023 and enter operations after 18 months.

Don Humberto

The US$75mn solar park is being developed by Chilean real estate, construction and energy firm EBCO and local developer IER Energía. It will be located in central Metropolitan region.

The project will have a 90.5MW capacity and connect to the existing Punta Peuco substation through a 280m transmission line. Construction is expected to begin in July, 2022.

San Matías

This US$224mn wind farm is being developed by the local unit of US-based AES, AES Gener.

The project entails the installation of a 107.5MW generator in center-south Biobío region that will connect to the grid via the existing Campo Lindo substation. It also includes the construction of an underground transmission line

AES Gener has said it aims to start construction in February of 2022 and finish works 21 months later.

Gabriela

The US$248mn solar project is being developed by Spain’s Grenergy in northern Antofagasta region.

It involves the construction of a 220MW generator and a 22.5km transmission line. 

Construction is expected to start in the second quarter of 2022.

Earlier this year, Grenergy closed a US$70mn financing deal to help build 14 PMGD solar projects with a combined capacity of 130MW. 

In total, Grenergy has 2.6GW under development in Chile.

Peñasco Ventoso

This US$325mn wind project is being developed by Cielo Wind and Libertad SpA, and it involves the construction of a 486MW wind farm in Biobío region.

It will use internal underground transmission lines to connect to the new Peñasco Ventoso substation and a second, 5km conventional line, to transport the energy to the existing Rucúe-Charrúa substation.

If approved, the project is expected to come online in July, 2023.

La Pampina

Another Generadora Metropolitana project, the US$140mn La Pampina will be a 160MW solar park in Antofagasta region.

It also involves building a substation and a 500m transmission line.

La Pampina will occupy part of the same lands originally destined for the CEME 1 thermosolar project, which the company decided to cancel last year.