SING generators call for interconnection proposal

Generators in Chile's northern grid (SING) want energy minister Jorge Rodriguez to include a concrete plan for linking Chile's two main power grids in the proposed law currently before congress, local newspapers reported. The proposed transmission law currently before the lower house does not adequately address the issue, daily business newspaper Estrategia quoted the CEO of SING generator Electroandina, Willen Van Twembeke, as saying. At the moment, there is no transmission line between SING and the central grid, SIC, but northern generators want to export surplus power to the SIC, where supplies are tight and prices are high. Twembeke and other SING generators rejected claims by SIC generators - mainly Endesa, Colbun and AES Gener - that an interconnection line would require government subsidies. SING generators said they would cover part of the estimated US$350mn cost of building an 800MW line, while the rest would be paid by consumers, who would benefit from the interconnection in the long term through lower prices. Rudolf Araneda, CEO of another SING generator, GasAtacama, told BNamericas that the line would save customers about US$375mn in lower electricity bills over the next ten years, while SING generators would receive an extra US$125mn in revenues from the power sales. Interconnection is feasible but "the bottom line is that it will have a cost and someone will have to pay for it," Fitch analyst Dan Kastholm told BNamericas. Private companies are not likely to pay for the project while transmission costs remain uncertain because shareholders demand "adequate returns" on their investments in the long term, Kastholm said. Belgium's Tractebel and Chile's state copper company Codelco own Electroandina, which has 1,029MW installed capacity in the northern grid. GasAtacama is owned 50:50 by Endesa and US-based CMS Energy.