Finnish investor Korkia reinforces its position in Chile: it partners with Ciudad Luz for the development of new energy projects in the country

PRESS RELEASE from Korkia
September 15, 2023

(Machine translation)

With the aim of strengthening the national electricity grid, the Finnish renewable energy investor Korkia and the Chilean distributed generation company Ciudad Luz agreed to jointly develop solar and wind generation projects in Chile. In addition, they will have storage to provide greater flexibility and security to the National Electric System (SEN). The plan considers starting with 500 MW in four years, enough to supply some 350,000 homes, and potentially extending it up to 1,000 MW.

According to the Chilean Association of Renewable Energies and Storage (ACERA), currently the photovoltaic + BESS (Battery Energy Storage System) capacity is approximately 100 MW. With the 500 MW + BESS that Korkia and Ciudad Luz will develop, that number will multiply the current solar capacity with storage by five.

The deployment and necessary technology of the projects throughout Chile will be evaluated on a case-by-case basis, with the idea of carefully selecting the appropriate locations to allow the deployment of NCRE.

"This is the first joint venture with a developer that Korkia has closed in Latin America. We are delighted to partner with Ciudad Luz, which not only has experience, but has also invested in driving the energy transition, and is well established in its home market in Chile," says Mikko Kantero, executive vice president of New Markets and Origination at Korkia.

According to the July “Attractive Country Index for Renewable Energies” ranking carried out by Bloomberg, Chile was positioned as the most attractive country in Latin America to invest in renewable energies, ranking 14th on the list globally, surpassing Brazil (18 °), Argentina (30°) and Mexico (35°).

Korkia has operated in Chile since 2019, but previously the company's focus was on investing in the most advanced stages of solar energy projects; asset management of existing photovoltaic/solar plants. Therefore, for Korkia this cooperation marks the beginning of investment focused on the development of projects in Chile. The novelty of the projects is that, in addition to solar and wind energy, the joint venture will include storage projects that will be a central part of the strategy.

"Latin America is very attractive and as Ciudad Luz also operates in Colombia, the possibility of expanding the JV also to the Colombian market in the near future opens up. We both have the ambition of creating more clean megawatts for the continent in the coming years," says Rodrigo Ackermann, vice president for Latin America at Korkia.

The company, Ciudad Luz Development, will develop utility-scale projects, in addition to PMGDs, both based on solar or wind generation with storage modules. Likewise, the company contemplates the development of standalone storage systems, which could be operational in the next 2 years.

"Chile is facing difficulties in its renewable and non-conventional energy sector due to the lack of transmission lines and the high level of congestion, especially in solar projects. Currently, energy production capacity cannot be fully utilized because energy cannot be transferred to where it is needed at all times. The storage projects with Korkia will allow us to combat this problem and, hopefully, provide more reliability to the network," comments Tomás Steinacker, general manager of Ciudad Luz Development.

According to a report from May of this year, the consulting firm Spec Energy Consulting estimates that in 2023 the discharge of renewable energy could triple compared to the previous year, wasting between 3,170 GWh and 4,568 GWh, energy that could supply 1,200,000 homes annually.

The country is working to become an energy power thanks to its abundant natural sources of renewable energy and its recent incorporation into the green hydrogen industry, with the goal of achieving carbon neutrality by 2050 and complying with the Paris agreement.