Vertically integrated U.S. solar company SunPower has revealed this week ambitious plans to develop 1 GW of solar PV capacity in Chile over the next five years.
The San Jose-headquartered firm will invest around $1.5 billion in Chile to take advantage of new rules for power auctions that have been introduced in order to accelerate the countrys clean energy transition.
With "phenomenal sunshine" and the new favorable energy auctions, Chile is fast becoming a strategically significant market for SunPower, confirmed company CEO Tom Werner.
The Chilean president Michelle Bachelet has recently introduced a national renewable energy generation target of 20% by 2025. To achieve this goal, the countrys energy market now allows solar and wind suppliers to sell power in specific, favorable time blocks a liberalization of the sector designed to aid the integration of intermittent power sources on to the grid.
The countrys energy auctions have also had a loosening effect on the market, with SunPower set to participate in the next auction, which invites participants to submit bids until April 2016. The previous auction, held in February, attracted 38 companies keen on developing clean energy projects in the country.
According to Bloomberg New Energy Finance (BNEF), Chiles solar market will grow by around 680 MW this year, with new clean energy capacity adding a cumulative 1 GW to the energy mix. And much of this growth will be driven by the new auctions, analysts believe.
Government data revealed by BNEF shows that around 1.7 GW of new solar PV capacity is currently under construction in Chile a figure that will significantly boost the standing 546 MW capacity already installed.
SunPowers 1 GW plans will commence later this year with the construction of a 100 MW solar farm located in the central region of Chile, located to meet the power needs of some of the large mining operations that exist nearby.
Financing will likely arrive via private local banks, with SunPower tapping its manufacturing plant in Mexico for the supply. The companys VP of global power plants, Nam Nguyen, told Bloomberg that SunPower will seek to arrange long-term PPAs with distributors, and will also contract directly with Chiles cash-rich mining companies for power supply arrangements.