Takeaways from Chilean renewables chamber Acera’s anniversary conference

Decision makers from the public and private sectors along with representatives from the world of research and academia gathered in Chilean capital Santiago for an energy conference hosted by local renewables and storage association Acera.

Discussion and debate were focused on the energy transition and ways of achieving an emissions-free grid by 2050.

The country is on the road to power sector decarbonization, a target that will require significant investment in energy storage systems and other grid technology, such as synchronous condensers, to mitigate the intermittent nature of wind and solar parks. As power systems become cleaner, pressure typically grows for grid investment and an associated political challenge for governments is managing the burden on end-users, who typically pay for such outlay through their bills.

The conference was held to mark the 20th anniversary of the founding of Acera. 

BORIC’S VIEW

President Gabriel Boric said the government was due to present, by the end of the year, draft legislation to reform sectoral and environmental permitting. 

Permitting in Chile is renowned for often being lengthy and complex, and a potential speedbump for project development. 

Draft legislation seeks “greater rationality” and a reduction in processing times without weakening “environmental institutionality,” Boric said. “That's the balance we’re looking for.”

Both electricity project developers and members of Chile’s nascent green hydrogen ecosystem have urged a permitting overhaul, particularly to boost timeline certainty. 

ALSO READ Chile environmental permitting overhaul: ‘We can’t wait 10 more years’ 

Boric, meanwhile, told delegates that this quarter officials were due to present amendments to the government’s energy transition bill currently in congress and submit an electricity price-stabilization bill.

Citing the importance of state policy in areas such as energy, in comments addressed to investors, he said Chile had achieved much and was doing well and capable of raising the bar further.

PROJECT FINANCING

Almost no solar plant in the north is not impacted by curtailment and firms are experiencing financial difficulties, said Alfredo Solar, general manager of Atlas Renewable Energy Chile, during a panel on Chile's attractiveness for renewables investment. A combination of supply surpluses during solar hours and transmission congestion has fueled energy curtailment and, in turn, negatively impacted the economics of plants, particularly those operated by small pureplay firms. Generators have also been impacted by price decoupling, or differences between injection and withdrawal prices. 

The situation has dampened appetite for finance provision and is resulting in some payment delays, the panel was told.

The design of an energy supply auction underway is geared to help address sector challenges. 

Earlier in the event, Ana Lía Rojas, Acera’s executive director, urged lawmakers to get the government's energy transition bill through congress as soon as possible to help spur the process. The bill includes a mechanism designed to help support impacted generators.  

The draft legislation also opens the door for a government energy storage auction, a proposal that, in its current form, has drawn criticism from local power generator association Generadoras de Chile, whose members are already investing heavily in battery storage systems. The association proposes a one-off grid services auction that is neutral, or agnostic, in terms of technology and project-development status.

In Chile's sundrenched north, building out storage and transmission capacity is deemed vital to support existing renewables generators and the addition of new capacity. 

On energy storage investment, Stanislaw Malek, senior VP of Norwegian bank DNB, was upbeat. "The technology is very bankable," he told the panel. "We're not scared of storage."

Malek said DNB was waiting for certain regulations in Chile, particularly in the sphere of capacity payments. Rules are expected next half. 

Questions remain over what financing model is most apt for storage projects, a separate panel was told.

ACERA’S JAIME TOLEDO

Jaime Toledo, chairman of Acera, told the conference that it was “inexcusable” that Chile imports polluting and expensive fossil fuels when the country has abundant renewable energy resources.

He referred to 2022, when reduced hydropower availability – stemming from drought conditions – and elevated fossil fuel prices on the international market sent the country’s energy import bill soaring. 

Toledo also called for an integral reform of the energy remuneration system.

The only way to eventually reduce consumer bills is building more renewables capacity and transmission, combined with increased efficiency and grid flexibility, among other objectives, he said.

In closing comments, Toledo said the government and Acera were aligned regarding advancement of the energy transition. 

WU XUAN FROM GEIDCO

Wu Xuan, secretary general of the Global Energy Interconnection Development and Cooperation Organization (GEIDCO), a Beijing-based energy nonprofit, proposed an energy transition strategy for Chile.

Pillars include expanding installed hydropower capacity in the south and solar power in the north, along with building pumped storage facilities and electrochemical energy storage systems.