Citing curtailment, Chile’s Colbún prioritizing storage at US$450mn hybrid project

Chilean power generator Colbún indicated that solar-storage hybrid project Celda Solar is next on the construction list.

Planned for northern region Arica y Parinacota, the US$450mn hybrid comprises a 369MW solar PV park and a 240MW energy storage system.

Colbún finance manager Soledad Errázuriz told the company’s Q2 results call an official announcement was possible by year-end and that the energy storage component was the priority.

“What we are expecting is just to develop the storage system on a standalone basis, as a first stage,” Errázuriz told investors.

“We have the environmental approval for both. However, the conditions to develop a solar power plant in the northern part of the country’s aren’t there because of the curtailment in the system.”

Factors have conspired to create a solar PV buildout speedbump in the north: solar oversupply, transmission congestion and limited demand growth.

 “We would start by building only the storage system,” Errázuriz said.

Energy storage systems, which are starting to come online, are seen as a key part of the solution. Beyond batteries, Colbún is seeking environmental approval to build a pumped storage system. 

Fellow generator Enel Chile recently said new solar PV capacity was ruled out for now and that hybridization was its strategy.

Globally, lithium-ion battery prices have fallen in the double digits, with a factor being weaker-than-expected demand from the electric vehicle market, although a question mark hangs over how long the low-price window will remain open.

Colbún, meanwhile, is expecting a decision next month from competition authorities on its planned purchase of renewables player Inversiones Latin America Power (ILAP).

The company said that, via the US$400mn transaction, it would acquire two operational wind parks: the 193MW San Juan in Atacama region and the 46MW Totoral in Coquimbo region. 

The US$200mn San Juan expansion project, which includes battery storage, was under review, according to environmental review agency SEA. 

Capex for the rest of the year is US$190mn, related to the under-construction Horizonte wind park. The Celda Solar development could result in higher outlay for the period, the call was told.

Chiefly focused on the nonregulated and spot markets, Colbún said opportunities to obtain contracts in the free market could emerge this half and into early 2025.

Colbún has 820MW of generation capacity in the preliminary studies phase, 816MW in the construction phase (Horizonte), 1.81GW in the feasibility phase and a total of 3.19GW with an environmental green light.

In terms of technology, 2.4GW is wind, 2.4GW solar PV and 1.9GW battery storage.

Projects with environmental authorization are Jardín Solar, Celda Solar and Inti Pacha.

INSTALLED CAPACITY 

At the end of 2023, the firm’s installed capacity stood at 4,043MW, led by thermal (2,159MW) and hydro (1,627MW), with the balance being solar (248MW). 

In terms of coal-fired capacity, Colbún has a single plant, the 350MW Santa María unit in Biobío region.