Chile: a sun mine about to be exploited

With the highest Direct Normal Irradiance (DNI) in the world and an energy-hungry mining industry, Chile should be the CSP destination of choice. Nonetheless, the absence of a government subsidy programme has affected the pace at which the CSP industry has developed.

SolarReserve's power tower project with storage, Crescent Dunes. Picture credits: SolarReserve Communications Department.

By Ángela Castillo

However, the announcement of the Copiapó CSP-PV hybrid project made by SolarReserve in August 2014, has instilled new hopes into an incipient market.

An innovative design

The Copiapó CSP-PV hybrid project is particularly interesting thanks to its technical characteristics: it incorporates two 130 MW molten salt CSP towers with a 150 MW PV plant. This will allow the project to operate for 24 hours a day, using PV supplemented by CSP in the day and just CSP at night.

Tom Georgis, Senior Vice President of Development at SolarReserve, said that it would “maximize the output of the facility, delivering over 1,700 GWh annually”. He also added that the plant would produce up to 260 MW of firm baseload power.

The storage technology used will be molten salt as “it offers the most cost effective and efficient method of energy storage because the sun’s energy is only transferred once, from the salt into high quality steam only, at the exact time that electricity generation is required for use in powering a conventional steam turbine”, indicated Georgis. He also highlighted the fact that molten salts can be sourced locally in Chile, helping the development of yet another local industry.

The announcement of the Copiapó plant forms part of an ambitious investment plan to be made by the California-based company over the next years in Chile. “SolarReserve is actively permitting over 800 MW of CSP projects, including the Copiapó Solar Project”, said Georgis. If built, the plant would be the biggest hybrid CSP-PV plant worldwide.

Financing is planned to commence in early 2015. “Even without subsidies, this project makes economic sense in Chile. The company has already arranged financing for two solar thermal with molten salt storage tower projects similar to Copiapó in the U.S. and South Africa. We fully anticipate that this proven track record combined with Chile’s investment climate will attract the requisite capital”, he added.

Shifting roles: from being an importer to become a renewable energy producer

According to the U.S. Energy Information Administration, Chile is the fifth largest energy consumer in South America. The country imported 300,000 barrels per day, including refined products and crude oil, mainly from Argentina, Brazil, Colombia, Ecuador and the U.S.

In order to reduce such reliance on fossil fuels, the Chilean government has designed an ambitious renewable energy development agenda, with a target of 20% renewables by 2025.

Interconnection challenges

The biggest obstacles for the development of the CSP industry in the country are, in the first place, securing land, as most plots are intended for mining exploitation, and secondly, interconnection problems between the Interconnected Central System (SIC, for its Spanish acronym), the Interconnected System of Norte Grande (SING, in Spanish), the Aysén System and the Magallanes System.

The country has an installed capacity of 17,000 MW, of which 74% come from the SIC; 25% from the SING, and less than 1% is spread over the Aysén System and the Magallanes System.

Nonetheless, Georgis does not see it as a major challenge for the Copiapó plant operations: “because our facility’s generation is baseload and not intermittent, like PV and wind, it does not require firming and shaping from conventional generation facilities and actually bolsters the transmission systems reliability and stability".

All eyes are on Chile

Additionally, the construction works at the Cerro Dominador plant, developed by Abengoa, began on May 2014. It is a 110 MW tower plant, with 17,5 hours of storage in molten salts and is located in the commune of María Elena in the Atacama Desert.

“The project has reached 9% progress, which includes basic engineering works and the acquisition of the main pieces”, indicated a source in Abengoa.

The total cost of the project is estimated at US$1,300 million and the Chilean government, through its economic development agency, Corfo, will contribute with a US$20 million subsidy, besides securing the land use rights.

With regards to the Spanish company’s future projects in Chile, it indicated that: “Our immediate plan is continuing the construction works at Cerro Dominador and, in the medium term, to begin environmental assessments and permitting proceedings for another plant with similar characteristics.”

Slowly but surely Chile is attracting more and more attention from international investors.