Snapshot: The multibillion-dollar project pipeline of AES Andes

Generator AES Andes filed for environmental review a US$990 million clean energy project planned for the Tarapacá region in northern Chile.

Dubbed Solar Oriente, the project comprises a 582MW solar PV park and an 809MW battery storage system with five-hour discharge capacity.

Construction of the project, among the biggest under review in Chile, is penciled in for October 2025.

Green shift

AES is shifting away from carbon-intensive generation, with a goal of having 6.1GW of capacity in place in 2027, with 89% of it renewable and 11% fueled by natural gas. 

The company’s installed capacity currently stands at 3.88GW. 

The AES strategy involves fully exiting 3.0GW of coal-fired generation by end-2025, if conditions allow, and selling 800MW of non-core gas peaking plants.

In terms of coal plants, the company is analyzing closure or conversion options for remaining units: Ventanas 3 & 4, Angamos 1 & 2, and Cochrane 1 & 2, accounting for combined capacity of 1.65GW. At Angamos, AES Andes is considering a US$450mn molten salts energy storage conversion project called Alba. 

"Units will be retired as soon as the system no longer needs them to ensure grid reliability," the investor presentation states. "If system requirements make disconnection unfeasible before year-end 2025, AES may consider divesting the ownership of coal units along with decarbonization commitments."

It adds that the company is "exploring options to convert coal units to zero CO2 technology in order to extend the useful life of merchant plants and provide storage and ancillary services to the grid." 

Projects under construction 

AES Andes has several projects for a total of 435MW under construction in Chile and due to be completed this year: Andes Solar IV (9MW x 5-hour battery) and Andes Solar IIA (80MW x 3-hour battery). A 4MW turbine at 78MW wind park San Matías came online this half.  

Meanwhile, Andes Solar III (171MW solar PV and 171MW x 3-hour battery) is due for completion in the first half of 2026.

Contracted projects under development

Along with Solar Oriente, AES has four contracted renewables projects in the development phase in Chile and due to be built by the end of 2027, according to an August investor presentation. 

- Bolero: 136MW x 3-hour battery storage

- Rinconada (US$365mn): 258MW wind

- Cristales (US$710mn): 187MW solar PV and 267MW x 3-hour battery storage

- Pampas (US$800mn): 120MW wind, 160MW solar, 229MW x 3-hour battery storage

Pampas and Cristales have been given the environmental green light. Rinconada is still in the environmental review phase.

Bolero, which involves adding storage to existing renewables assets, does not need to go through the system, environmental review agency SEA said this year. AES acquired the 146MW Bolero solar PV asset in 2023. 

AES, which operates in Colombia and Argentina, too, also has 7.46GW of uncontracted capacity under development (1.80GW wind, 2.51GW solar and 3.15GW battery).

The company supplies clean power to miners, including state-owned Codelco and private player Lundin, as well as to Google and Microsoft.

In a decarbonization report, ratings agency Moody's outlines opportunities linked to demand for energy metals: "The four main electricity companies in Chile today face the challenging task of preparing to meet a growing demand from the mining industry while undergoing their own energy transition. The production of renewable energy continues to expand as the electricity sector invests in it, but the transition is riskier because the inherent volatility of renewable generation requires greater robustness in the transmission system and increased battery storage capacity."

AES is Chile's third biggest single generator by output, accounting for 12% of the 83TW/h produced in 2023 after Enel (29%) and Colbún (14%).

Green hydrogen

A “mega-scale” AES Andes green hydrogen project planned for Chile is under development following pre-feasibility studies, according to the investor presentation.

The US$1.5bn project is expected to produce 90,000t/y of green hydrogen and a final investment decision is due next year.

A project map from hydrogen chamber H2 Chile indicates that AES Andes has an export-focused green ammonia plant planned for the country’s north.