Snapshot: The US$2bn AES Andes renewables projects given the environmental green light

Chilean generator AES Andes is developing a “significant portion” of a renewables portfolio that stands at almost 5.4GW.

So reads the 3Q24 earnings report of the company, which is working to integrate 4.1GW of new renewables capacity between 2019 and 2027.

In terms of major hybrid projects, AES Andes has been given the environmental green light for three, with combined required outlay of US$2.26bn.

PampasType: Solar PV, wind, energy storage
Capex: US$800mn
Region: Antofagasta
Estimated construction start: June 2025

Terra Energía RenovableType: Solar PV, wind, energy storage
Capex: US$750mn
Region: Antofagasta
Estimated construction start: December 2025

CristalesType: Solar PV, energy storage
Capex: US$710mn
Region: Antofagasta
Estimated construction start: June 2025

Cristales and Pampas are contracted, according to an investor presentation made earlier in the year. 

In 2023, AES was told that its 300MW Arenales standalone battery storage project – planned for construction at a thermoelectric power plant site in Antofagasta region (Angamos) – did not need to go through the environmental assessment system. Estimated outlay on the project, which will have three-hour injection duration, is US$356mn.

In the earnings report, citing Pampas and Arenales, AES said the board had approved the sale of projects to a subsidiary, to “facilitate the development and financing of these projects, strengthen the capital structure of AES Andes and contract the renewable production from these projects.”

At end-September, the company had 3.51GW of capacity spread across three coal assets, two hydropower units, five wind parks and four solar plants. In terms of batteries, 320MW was in operation, while a further 80MW (three-hour duration) was partially operational and 146MW (three-hour duration) was under construction, corresponding to the hybridization of the 146MW Bolero solar PV park.

Another large AES hybrid project is in the environmental review phase.

Altos del Sol
Type: Solar PV and energy storage
Capex: US$1.38bn
Region: Antofagasta
Estimated construction start: September 2025

Coal exit

Against the backdrop, AES Andes is working to “substantially exit” coal-fired generation by the end of 2025. 

Options are asset sales, fuel conversion or retirement, “with the possibility of some assets being retained until 2027 in exceptional cases, while maintaining the reliability and adequacy and economy of the electricity system and subject to the necessary approvals.”

In 2019 the company, and other generators, entered into a voluntary agreement with the State for the gradual disconnection and cessation of operation of coal-fired plants by 2040. Enel has already exited coal.

AES has disconnected its Ventanas I (114MW), Ventanas II (208MW) and Norgener (276 MW) coal-fired power plants.

At end-September, around 1.65GW of AES coal capacity was operational, corresponding to its Angamos 1 & 2, Cochrane 1 & 2 and Ventanas 3 & 4 assets.

Over 1GW of AES coal-fired generation could stop running from January 2025 if grid conditions allow: Ventanas 3 (267MW), Ventanas 4 (272MW), Angamos 1 (277MW) and Angamos 2 (281MW).

A retirement or conversion date is pending for its remaining coal-fired assets: Cochrane units 1 & 2, which have combined capacity of 550MW.

At Angamos, AES Andes has previously said it was considering a US$450mn molten salts energy storage conversion project called Alba.

Green hydrogen

An AES Andes green hydrogen project planned for Chile is under development.

The project is expected to require more than 800MW of new clean energy supply.

“AES is working on technical and environmental studies for the implementation of this project, as well as reviewing the best financial, legal and corporate structure options to carry out this process,” the 3Q24 report reads.

The AES project, branded INNA and planned for Taltal, Antofagasta region, is a green ammonia plant. Estimated electrolyzer capacity is 2.3GW and it is due to begin commercial operations in 2030.

Chile has around 70 publicly announced green hydrogen projects. 

Antofagasta is home to 18 projects, the bulk geared to producing derivative green ammonia, with plants planned for construction on government land.  

Ten of the Antofagasta projects will need to disburse cash for government land concession payments and environmental studies work next year, the World Hydrogen Latin America industry conference was told recently. Those without the requisite development finance may drop out of the race, the event heard.

ALSO READ: Chile’s 10 biggest pre-construction energy projects