Beyond generation-injection: Chile urged to better leverage solar resources

Chile’s vast solar power resources can play a much bigger role in the energy transition than simply being used to generate and inject electricity on a utility scale, a sector expert said.

Solar accounts for just 2.18% of the national energy matrix, which is dominated by fossil fuels, mostly imported and a big chunk consumed by the transport sector.

Solar’s share of the matrix is “not very ambitious,” said Darío Morales, executive director of local solar power association Acesol. 

In terms of the electricity generation mix, however, solar PV accounted for around 17% last month and installed capacity is growing.  

Chile has a goal of achieving net-zero emissions by 2050, which will require electrifying swathes of the economy to complement the ongoing process of retiring the country’s 5.5GW fleet of coal-fired power stations. 

“We need to boost electrification as quickly as possible,” Morales said during a seminar hosted by Chile’s solar energy research center SERC and sponsored by Acesol and national energy storage and renewables association Acera.

Along with electrification of transport, greening the residential and industrial segments – particularly via solar-powered heating and cooling systems – is deemed vital.

National research is needed to establish the optimum level of distributed generation deployment, while incentives would help spur deployment, the event was told.

A study has been conducted into how much distributed generation capacity could be added to the distribution network without the need for associated infrastructure investment.

Chile’s solar park is currently dominated by utility-scale and small-scale PMGD installations (up to 9MW). Ninety-five percent of installed solar capacity in Chile is over 1MW, compared with the global average of 52% and the 36% seen in Australia.

Judith Vidal, a researcher at the National Renewable Energy Laboratory in the US, cited the potential of residential and industrial energy storage systems to support demand-side flexibility. The best solutions combine battery and thermal systems, Vidal told the event, adding that investment in emerging technologies was vital.

About 70% of Chile’s installed solar capacity can be found between Arica y Parinacota and Atacama regions – far from the country’s major demand hub around capital Santiago. Nationally, solar capacity is expected to climb to around 13GW within the next few years, up from 8.2GW currently. Over 38GW has an environmental permit. 

In terms of overall renewable energy potential, Chile holds an estimated 2.35TW. Total installed capacity in Chile is around 33GW.

MARGINAL COSTS, CURTAILMENT

This year has brought mixed fortunes for variable output, non-conventional renewable energy (NCRE) generators in Chile.

Improved hydrological conditions, combined with a reduction in thermoelectric generation, have supported a convergence trend in marginal costs which has eased price decoupling stress.

Nevertheless, energy curtailment or dumping has climbed, with transmission congestion only a partial factor, Ernesto Huber, executive director of Chile’s grid coordinator CEN told the event.

From January to September, curtailment was 1,454GWh (410GWh wind and 1,044GWh solar), almost reaching the 1,471GWh reported for the whole of 2022.

During solar hours, Chile tends to see oversupply in power production in the north, electricity that could be stored and injected back into the grid after the sun sets.

“We clearly see an opportunity for storage,” Huber said in a presentation, adding that “the major challenge is taking advantage of the variable output electricity to illuminate the country at night.”

According to data from Acera, 13.2GW of clean energy and storage capacity was in the environmental review phase in September. NCRE plants accounted for 7.18GW, standalone storage systems 617MW and NCRE-storage hybrids 5.36GW.

Storage systems are already operating and under construction. Investors are awaiting new regulations already in the pipeline for standalone systems, particularly concerning remuneration. Securing steady revenue flows would ease access to financing, which, in turn, should help smaller players enter the arena.

The government is planning to hold an energy storage auction. An energy transition bill that would open the door for the process is in congress.