Etrion records US$76mn impairment on low Chile power prices

A US$75.8mn impairment charge due to low current and forecast electricity prices in Chile drove an US$88.3mn net loss for solar developer Etrion during the third quarter.

This compares to a US$4.4mn net loss in the corresponding 2015 period.

"This impairment resulted from the continued sharp decline in our outlook for long-term power prices in the Chilean market," CFO Paul Rapisarda said Thursday during an earnings call.

In Chile, Etrion owns and operates the 70MW Salvador PV solar plant in Atacama region (III), for which 70GWh/y of electricity is contracted through a long-term PPA.

"Under the terms of the PPA in Chile, Salvador purchases and pays for the cost of electricity in the withdrawal node at the offtaker," Rapisarda said, citing that these costs averaged about US$0.04/kWh during the quarter.

"We do expect these nodal costs to drop significantly once the work underway to expand the transmission capacity in the north of the [central SIC power grid] is completed," he added, referring to the Cardones-Polpaico trunk line expansion currently under construction.

In a recent interview with BNamericas, Acciona Energía Chile CEO José Ignacio Escobar cited the decoupling of power prices between the points of injection and withdrawal due to transmission congestion as "by far" the biggest risk facing renewable generators in Chile.