2.1 GW-AC of solar PV under construction in Chile

A total of 741 MW-AC of solar PV was operational in Chile at the end of September, according to the latest report from CIFES, the nation’s renewable energy center. This means that Chile’s PV capacity grew by 144 MW from the 597 MW in operation that CIFES reported for the end of August.

Additionally, 2.11 GW-AC of solar PV is under construction. These projects are on schedule to be completed between October 2015 and August 2017, according to data from Chile’s National Energy Commission (CNE).

CIFES also reports that in September, Chilean solar PV generated 131 gigawatt-hours, representing 2.3% of electricity generation in the nation’s main grids. Once the projects under construction are completed this should rise to over 8%, which is higher than Italy, Greece or Germany at present. Depending on the rate of development in those nations, this could put Chile at the highest level of any medium-to-large nation on earth.

Last week Chile’s government put out a roadmap calling for solar to represent 19% of electricity generation in 2050, with all renewable energy sources including large hydro making up 70% of generation.

In the past year alone, there has been notable growth in Chile’s PV market. In September 2014 only 219 MW-AC of PV projects were in operation, and another 456 MW under construction.

GTM Research Senior Analyst Adam James says that there are multiple reasons for this boom. “Many projects currently under construction are a byproduct of dynamics from last year, with high electricity prices sparking merchant development and several notable power purchase agreements with large industrial off-takers,” stated James.

“However, a significant amount of new development is also attributable to the tender processes which have procured several hundred megawatts of solar. The boom we are seeing in construction is due to a combination of both factors.”

Last year Chile changed the format of its electricity supply auctions to facilitate the participation of renewable energy, by allowing project developers to bid in to eight-hour blocks. This has proven beneficial to the nation’s PV market.

On Friday, the results of the latest of these auctions will be announced. This auction has received 38 bids, including several from wind and solar developers such as Abengoa and Solairedirect.

GTM Research says that it expects these solicitations to represent the majority of Chile’s solar market in the future, with large power contracts with private off-takes dying off before the end of 2015.

“We do expect some procurement by large off-takers to continue, but that this development will mostly entail projects under five megawatts,” explains James. “The majority of procurement will come from the tender processes in the future.”

“What that means is that when this initial boom ends, it will give way to a lower level of steady development rather than having PV demand dry up entirely.”

While Chile’s Environmental Assessment Agency (SEA) has approved over 10 GW of solar PV projects, many of these are believed to be speculative and may never be built. In September only one PV project applied for environmental assessment at 42 MW-AC.

Portions of this article were translated from an article by Blanca Diaz Lopez. For this Spanish-language article, please see the pv magazine Latinoamérica website.