Chile’s new 600km long transmission line can boost renewables

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Red Eléctrica Chile and the Chilean company E-CL have reached an agreement under which Red Eléctrica will acquire 50% of the share capital of Transmisora Eléctrica del Norte (TEN), owned by E-CL, for a total of US$218 million.

The acquisition will enable the two companies to jointly build and operate a 600 km long electricity transmission line running from the port of Mejillones, in northern Chile’s Antofagasta region, to Cardones in the central Coquimbo region. The line, which is already under construction, will connect the Sistema Interconectado Central grid (SIC) with the Sistema Interconectado del Norte Grande grid (SING).

Red Eléctrica Chile is a subsidiary of Spain’s Red Eléctrica group, which owns and operates Spain’s electricity transmission grid and has also investments in Latin America, while E-CL is a subsidiary of ENGIE (formerly GDF SUEZ), a global energy player.

Chile’s transmission network and the new line

Chile has four electricity transmission networks: the Sistema Interconectado del Norte Grande (SING), in the northern part of the country, which accounts for about 20% of Chile’s electricity generation; the Central Interconnected System (SIC), which is the grid for the central region and accounts for about 70% of the national electricity generation serving over 90% of Chile’s population; and the Aysén Grid and the Magallanes Grid, both in southern Chile, that account for a minority of Chile’s electricity generation.

The new 500 kilovolt (kV) Mejillones to Cardones electricity line, reports Red Eléctrica, will require an investment of over $780 million and upon its commission in the second half of 2017 and will be the first to interconnect Chile’s northern and central electricity subsystems. Therefore, the new line “will address the main challenge that the Chilean electricity system faces: the interconnection between its various subsystems to ensure security of supply and to reduce the price of energy,” added Red Eléctrica.

Earlier in the year, TEN had selected France’s Alstom to supply four turnkey substations for the Mejillones to Cardones transmission line. These include the three new 500 kV substations in Chacayita, Los Changos and Cumbres, as well as the expansion of the Nueva Cardones substation. Alstom said that its air-insulated and gas-insulated substations will allow for 1500 MW of power transmission.

Interconnecting renewable energy

Chile’s new energy highway is also expected to boost renewable energies allowing power intensive mining industry in the north of the country to consume power generated from renewable energy plants in the central SIC grid.

A rather worrying fact, from a renewables standpoint, is that TEN has also won a bid to construct a 375 MW coal plant at Mejillones, which is expected to start operation in 2018. Following the auction a year ago, GDF Suez (then TEN’s owner) said “the energy from this plant will be delivered to the SIC via the 600 km TEN transmission line, which has the potential to interconnect the two main electrical systems in Chile, as well as enable further deployment of non-conventional renewable sources.”

A spokesperson of the Red Eléctrica group for told pv magazine that “the new transmission link in Chile will be able to transmit a maximum capacity of 1500 MW and the main objective of this link, that will connect the North and Centre of Chile, is the transmission of electrical energy, regardless of the technology used to generate it.”

So, the aim is for the line to utilize more power generated via renewable energy sources. It appears that Chile is on the right track since according to the country’s latest targets announced in September, the government aims to provide at least 70% of the Chile’s energy mix from renewables by 2050.

Bloomberg New Energy Finance estimates that Chile will install around 775 MW of PV in 2015, although limits in grid capacity is expected to hold back solar development beyond 2017.