Snapshot: The Chile clean energy project pipeline of AES Andes

Chilean power company AES Andes is betting big on renewables-storage hybrid projects as the firm works to make its generation mix greener. 

Over the past month AES Andes, a subsidiary of US company AES, has submitted for environmental review a pair of renewables-storage projects with a combined price tag of US$1.51bn. 

Presented to environmental review service SEA last week and planned for sun-drenched Antofagasta region, the US$710mn Cristales comprises 379MW of solar and 542MW battery storage capacity. 

The other – the US$800mn Pampas, planned for Antofagasta – entered the SEA pipeline last month and involves 140MW of wind and 252MWp solar PV capacity coupled to a 624MW battery storage facility.

The energy storage systems of both proposed plants are designed to inject power into the grid over five hours, a means to support the economics of projects by obtaining non-solar-hour spot prices while mitigating potential grid congestion issues. 

In related comments, energy minister Diego Pardow last week said associated work in the sphere of storage was underway.

“We must be capable of giving signals to the market to incorporate batteries,” Pardow was quoted as saying by media outlet Energía Estratégica. “And for this, we have a long-term agenda and a short-term agenda.” Chile is working on secondary legislation that will govern the implementation of a law allowing capacity and injection remuneration for storage projects not linked to a generation plant.

AES Andes has a 2017-27 master plan to integrate 4.2GW of new green capacity, taking overall installed capacity to 6.1GW by end-2027. Renewables capacity would account for 90% and natural gas the balance.

In 2017, capacity stood at 5.8GW, comprising coal (52%) natural gas (25%) and renewables (23%). 

A 2023-27 growth plan involves US$3.0bn, with the bulk earmarked for deployment in 2024-26, according to a March 8 investor presentation.  

Installed capacity in Chile stood at around 3.36GW last year. AES Andes also has 1.13GW of hydropower and solar capacity in Colombia and 643MW combined-cycle capacity in Argentina. Total installed capacity capacity stood at 5.13GW.

PROJECT PIPELINE

According to the March presentation, AES Andes’ pipeline of projects to support commercial agreements comprises 877MW: 160MW wind, 418MW solar and 299MW battery systems all in the construction phase.

The company also has 2.33GW of contracted projects under development (686MW wind, 669MW solar and 978MW batteries). All new capacity is planned for Chile, except for 308MW of wind in Colombia.

In terms of uncontract projects under development, AES Andes has 3.49GW (2.21GW wind, 740MW solar and 543MW battery storage).

Overall, between 2019 and 2027, 4.2GW of contracted projects are due to be completed, with over half of new capacity due in 2025-27.  

COAL-FIRED PLANTS

Regarding thermoelectric power, AES Andes is working to exit coal-fired generation by end-2025.

Officials are looking at their options, the investor presentation said. “The company is analyzing the best option for each coal-fired plant between potential retirement, sale or conversion to no-emissions technologies. If system requirements make disconnection unfeasible before year-end 2025 AES may consider selling or converting coal units along with decarbonization commitments,” the company said.

In terms of associated assets, the 763MW, five-unit Guacolda complex in Atacama region has already been sold. AES has 10 remaining units, with one already retired and another due to be retired by year-end.

GREEN HYDROGEN

AES Andes is also working in the green hydrogen space. In June last year it announced US$10mn Antofagasta region green hydrogen project Adelaida, designed to produce the fuel for the transport sector. AES Andes signed in 2021 an MOU for an ammonia-based green hydrogen production project, which may require more than 800MW of new renewable energy capacity. Estimated output is 250,000t/y green ammonia, targeting the maritime transport and export markets, according to a 2022 national hydrogen project summary.

AES Andes also has a US$450mn molten salt project, Alba, in the environmental evaluation phase.

Both Adelaida and Alba are planned for the company’s 558MW Angamos coal-fired power complex in Antofagasta.

Browse AES Andes projects in the BNamericas project profiles database