Experts outline another energy storage demand driver in Latin America

While energy storage systems incorporated into renewables parks are leading the charge in Latin America and the pipeline of standalone systems is building, interest is also growing in other applications, according to two sector experts.

Rising renewables penetration and curtailment, along with favorable spreads between evening and daytime power prices, particularly in pioneering regional storage market Chile, has whipped up interest among generators in energy shifting applications.

In parallel, interest is growing in deployment of batteries as transmission assets, it was said at a storage webinar hosted by events and media platform Solar Media and sponsored by Chinese supplier TrinaStorage.

“In some countries where grid transmission lines are really weak, they're thinking about energy storage for the deferral of investments or, for example, they're thinking of grid-firming or grid boosters just to improve the quality of electricity,” Carlos Hernández, Latin America energy storage lead for Norwegian lender DNV, told the event, held ahead of industry conference Energy Storage Latin America, due to take place in Chilean capital Santiago on October 15-16.

Chile is blazing the trail in the region. A US$211mn initiative to incorporate storage capacity into the Lo Aguirre and Parinas substations, to control power flow along the 500kV lines that connect them, was auctioned last year and may be reoffered after bids from ISA and Transelec-EDF consortium Parlo came in too high.

Transmission system operators (TSOs) in Latin America "like ISA are considering these types of projects. It’s something we already have in this region,” Hernández said.

Luciano Silva, TrinaStorage's BESS product and engineering manager for Latin America, agreed, adding that transmission assets were particularly desirable from a revenue-flow perspective.

“It will get remunerated as a transmission asset, much more stable and much more regulated than a generation or energy management asset,” Silva said.

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Another growth seam is demand from off-grid mine power systems. Green hydrogen and derivatives production, which could potentially gain traction in the region in the second half of the decade, is also seen as a potential driver, given the need for round-the-clock clean energy, especially from projects targeting the European market.   

Silva, meanwhile, said that energy shifting was the key trend today.

“Later on, when we're really going into the high levels of renewable penetration, batteries and power electronics that allow them to connect to the grid, PCS equipment, will be the protagonist of ancillary services and, eventually, of holding the grid together and the reliability of the grid,” Silva said. 

Around 2GW/y of new storage capacity is expected to be added through 2027 in the region, according to a forecast from research provider BloombergNEF. 

On the overall energy storage picture in the region, Hernández said, “We have different cases in most of the countries. The big volume now is Chile, but the rest will come, and we see nice signals for that.”

In Chile, TrinaStorage has been awarded over 2GWh of capacity that will enter the pre-construction and delivery phase in 2025. The company also sees opportunities in island markets, citing the Dominican Republic as an example. Brazil, Colombia and Mexico are other potentials markets. 

A challenge for the region is permitting batteries to provide different services simultaneously, the event heard. "This is ... a more structural challenge maybe that we need to advance as LAC [Latin American and Caribbean] markets in order to make the most out of these assets," Silva said.

Chile storage capacity, projects

Chile is advancing rapidly with storage, with chief drivers being electricity curtailment and a plan to retire and convert coal-fired power stations by 2040.

In terms of standalone energy storage capacity, Chile has 54MW in operation, 1MW in the construction phase, 326MW with an environmental permit and 2.41GW in the environmental review phase, according to August data from local renewables and storage association Acera.

Regarding systems incorporated into renewables plants, Chile has 417MW operating, 401MW in the testing phase, 1.42GW under construction, 4.68GW with an environmental license and 5.66GW under review. 

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