Chile developer’s first utility-scale plant among US$900mn flurry of energy project submissions

Sixteen Chilean energy projects involving combined investment of US$923mn were either submitted for environmental evaluation or accepted for processing this week.

Three solar PV farms and a wind park account for the bulk of planned outlay, according to data from environmental evaluation service SEA.

The projects are the 420MW solar PV park Sol de Caone (Sphera Energy unit Itahue Energy), the 236MWp PV park Don Darío (Ebco Energía), the 144MW wind farm El Almendro (CMPC) and the 79MWp solar farm Inca de Varas I (GPG).

Renewable energy parks of up to 9MW planned under the PMGD distributed generation scheme are also among the 16. 

The bulk of Chile’s PMGD plants, by installed capacity, are in the central zone of the country. Developers are chiefly focused on this area, even though project land is generally more expensive and less abundant and sun-drenched than in the north. Plants in the central zone are generally closer to demand centers and tend to require less transmission interconnection outlay than those in the north, and can usually be developed faster. 

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More than 40 energy projects – with investment requirements of US$3.87bn – have either been submitted for environmental evaluation or accepted for processing in Chile since the start of the year.

Renewables developers are being spurred by factors such as plans to retire the country’s coal-fired power stations by 2040 at the latest and an overall push to achieve carbon neutrality by 2050. Hydroelectric power developers see opportunities to provide clean, baseload solutions that help mitigate the intermittency of solar and wind plants.

Green hydrogen is also blinking on the radars of renewables investors, among them Sphera and Czech Republic-headquartered developer Solek. 

SOL DE CAONE

Meanwhile, the biggest project overall this week, by both required investment and installed capacity, is Sol de Caone. SEA accepted the project for processing on Thursday.

Construction of the US$420mn facility – planned for central region Maule – is penciled in to start in July 2024, according to an environmental impact assessment. 

Sol de Caone represents local PMGD plant developer Sphera Energy’s first venture into the utility-scale generation segment. The company has a 2GW portfolio of large-scale projects in the pipeline.

To find out more, BNamericas spoke to Sphera Energy CEO Eduardo Morice.

BNamericas: Why did Sphera decide to develop a large project like Sol de Caone instead of a batch of PMGD plants?

Morice: Indeed, the Sol de Caone project is the first of our utility-scale projects submitted for environmental processing. 

We have been working on a portfolio of projects in the utility-scale segment for more than two years as part of our growth strategy. We saw, among other things, that the PMGD segment in Chile began to present substation infrastructure saturation scenarios for this class of project that would imply, in the medium term, a decrease in the development of this class of project, as long as that infrastructure is not expanded. 

On the other hand, all our projects encompass the design of battery storage systems, and in some we intend to also incorporate green hydrogen applications.

We currently have a portfolio of utility-scale projects totaling 2GW, in different stages of development, which include energy storage systems, and which are also located mainly in the south-central area of the country as part of our comprehensive strategy of seeking projects with better price prospects while partially sacrificing production.

We’re convinced that PV projects must adequately balance the solar radiation of the project with the node and robust electrical infrastructure that reduces the scenarios of lower prices and/or electricity dispatch. Considering these variables, a scenario was configured that led us to develop a strategy for the development of utility-scale projects in the south-central zone of the country that would be connected to electrical substations with lower congestion risks and closer to large consumption centers in Chile.

BNamericas: Will the company continue developing PMGD projects?

Morice: Sphera Energy’s growth has been organic and steady. Sphera was formed more than seven years ago, starting, exclusively, with development of 3MW PMGD projects. In the early phase we completed four projects, which are currently operational. 

Later, and in spite of the difficulties associated with the regulations of this class of project, we succeeded in developing a total of around 200MW, much of which is operational, some in construction and some waiting to obtain their construction declarations from national energy commission CNE. 

Along with our portfolio of utility-scale projects and the completion of the latest PMGD projects under the DS 244 price regime, Sphera Energy is also currently working on a portfolio of PMGD projects for the new DS 88 price and we are also looking to develop projects in Brazil, Peru and Colombia. 

We remain focused on continuing to develop distributed generation projects that are necessary to contribute to carbon-neutrality goals based on renewable energies with the least possible impact by their development.