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By Patricia Darez, general manager at 350renewables
2016 has been an exciting year for the renewable energy sector in Chile. The highlight was the distribution tender in August, in which almost 4GW of wind, solar and small-hydro projects were awarded 20-year PPAs. One of the winning bids even broke a world record (29.1 USD/MWh for a PV project) and combined the renewables' bids (excluding large hydro) raked in just over half of the total energy of that tender. The bulk of these bids relate to proposed wind farms and developers now have till 2021-22 to build them.
This post, however, will look back at 2016 from a slightly different angle. The year marked the end of the 2014-16 El Niño phenomenon and a possible transition towards La Niña in the second half of the year (see Figure 1).
Figure 1: NOAA's Sea Surface Temperature Anomalies ENSO Index (NOAA ENSO update 9 Jan 2017)
We have previously looked at the performance of wind and solar projects in Chile and thought it would be interesting to see how the end of El Niño and the start of La Niña may have affected the 2016 performance relative to previous years.
Inter-annual variability (IAV) of the resource in Chile – particularly for wind projects – is an issue that is currently poorly understood as consistent long-term ground observation stations are hard to get a hold of. The closest thing to a suitable dataset for this purpose are a handful of measurements in the northern half of the country, which originally were sponsored by GIZ and are now maintained by Chile's energy ministry. Unfortunately, the density of this station network has thinned over the year to an extent which leaves developers and operators frequently with considerable uncertainty with regards to expectations of 'normal' variations from one year to the next in the wind resource, and consequently the generation of their asset.
As in previous occasions, we limited our analysis to those projects which are located either in the SIC or SING transmission system (which is where >99% of the currently installed capacity is located) and utilized the generation data that is published by system operator CDEC.
Wind farms that have only been operational for less than two years have been excluded. We compared 'historic generation' (i.e., the monthly means of the entire historic data period aggregated into an annual mean, which would be representative for the time period from start of commercial operation of each project to the end of 2016) with the 2016 annual mean. Table 1 summarizes the findings.
Table 1 Comparison of 2016 generation to the historic annual average of each wind farm
For most projects, 2016 clearly has been a year of (significantly!) lower-than-average generation, with the exception of Punta Colorada (a considerable improvement for a project that suffered from O&M issues during its early years), as well as Valle de los Vientos and Taltal (currently the two northern-most operational wind farms in Chile, with only three and two years of data, respectively).
Since our analysis is based entirely on publicly available data from CDEC, which does not include any information about plant availability, we cannot conclude that the identified shortfall of generation is entirely due to the IAV of the wind resource. However, the overall clear negative trend across most projects, with few exceptions, makes it a likely candidate in our opinion, at least when looking at the bigger picture. Of course, a more detailed forensic analysis would be required to draw more reliable conclusions on a project-by-project basis.
So why hasn't the 5-30% potential underperformance been big news? One possible explanation is that the lower than average rainfalls also led to a drop in hydro generation, thus somewhat compensating lower generation with higher energy prices.
It would be interesting to see correlations between low wind speed years, hydro resource, ENSO years and energy prices. In the commercial environment we are in, being able to accurately predict future long term prices is key to putting a solid bid together, and we are certain that an in-depth analysis along these lines would be beneficial for any long-term price projections.
**350renewables is an engineering consultancy specializing in providing services to the renewable energy industry. We can provide technical and commercial advice on a diverse range of topics from the development through to the operational stage. Since 2013, we have been organizing technical events in Chile with the support of ACERA and via GTER, the Renewable Energy Technical Group.
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