AES Corp to prioritize natural gas, renewables, energy storage

US-based AES Corp. will prioritize renewable energy, natural gas and energy storage in its upcoming projects.

Latin America accounts for approximately a quarter of the 5,819MW of generation capacity under construction by the firm, AES said in a presentation to investors.

In the Dominican Republic, AES is working on expanding its existing LNG infrastructure, CEO Andrés Gluski said in a conference call.

Subsidiary AES Dominicana is developing a second pipeline from its liquefied natural gas (LNG) import terminal there, which could lead to the replacement of up to 1,000MW of diesel and oil-fired generation capacity with the cleaner, cheaper option of natural gas, Gluski said.

AES is also upgrading the terminal in order to allow for reshipment of LNG via third-party trucks, further expanding the firm's gas distribution business in the country.

Inter-American Development Bank (IDB) energy chief Ariel Yépez told BNamericas recently that the bank considers the Dominican Republic a strong candidate for becoming an LNG hub to serve the entire Caribbean, largely due to AES Corp's existing infrastructure there.

Battery-based energy storage is another area where AES will look to expand, Gluski said. The firm boasts 86MW of grid-connected battery capacity in the US and Chile, plus 50MW under construction in the US, Chile and Europe.

"One of the big issues with energy storage is to get regulatory approval," Gluski said. "We know the benefits that it has for stabilizing the grid, but it's a question of how you're going to get paid sometimes for those services if there's not an active, ancillary market."

AES has been hit by poor hydrological conditions in drought-stricken Brazil, where subsidiary AES Tietê operates 10 hydroelectric plants with capacity totaling over 2.6GW. Nonetheless, Gluski expressed optimism about operating in the country.

He cited the recent declaration by climate scientists of the arrival of the El Niño weather event as boosting the likelihood of increased rainfall in Brazil.

AES reported net income of US$142mn for Q1, compared to a loss of US$58mn in the same quarter last year.

Increased output, PPA demand boost AES Gener profits

Santiago, Chile-based subsidiary AES Gener grew its net profits by 120% to US$51.3mn. A company statement attributed the improvement to increased output from power plants on the central SIC grid and increased demand for long-term power purchase agreements (PPAs) from mining companies on the northern SING grid.

Gener has approximately 1,256MW of coal-fired, solar and mini-hydroelectric generation capacity under construction in Chile and Colombia.

In Chile, the 21MW Andes solar farm and 152MW Guacolda V coal-fired unit are both scheduled to start operations in 2H15. The 532MW Cochrane coal-fired plant is 84% complete and is scheduled to be commissioned in 2016, AES said.

The controversial 531MW Alto Maipo run-of-the-river hydroelectric plant near capital Santiago remains 16% complete, Gener said, the same level of advancement reported last quarter. Alto Maipo is scheduled to start up in 2018.

In Colombia, Gener said the 20MW Tunjita run-of-the-river plant is 93% complete and on target to start up in 1H16.

Gener is also building a 4,800m3/d water desalination plant at its Angamos coal-fired complex in Mejillones, Antofagasta region (II), which will begin operating in 2H15.

Pictured at top: AES Dominicana's Itabo thermoelectric complex (CREDIT: AES Dominicana)