A $66 million Clean Technology Fund soft credit line for a minimum-10MW plant is the latest piece of evidence of Chile’s growing leadership in CSP within Latin America.
By Jason Deign
It is still far from a major market for CSP. But a slew of announcements in recent months shows Chile is pulling ahead of its Latin American neighbours in the development of solar thermal power. If you are looking to develop CSP in South America, this is now clearly the place to be.
The latest signal that Chile is taking CSP seriously came last month with the announcement of a USD$66.12 million Clean Technology Fund soft credit line that will accompany a $20 million government grant to build a grid-connected plant of at least 10MW with thermal energy storage.
The Chilean Ministry of Energy is now preparing a tender for the plant, and has allocated a 404-hectare area in the Tocopilla province, Antofagasta region, for its construction.
“This plant, in conjunction with other government initiatives, is part of the National Energy Strategy and will help Chile to face its increasingly high demand for electricity, reducing the dependence on fossil fuel imports,” said the Ministry in a statement.
The Chilean government could have applied to the Clean Technology Fund for backing for almost any type of renewable energy but had good reasons for proposing CSP, says Claudio Alatorre, senior climate change specialist with the Inter-American Development Bank.
“The money will be devoted to a single project in order to take advantage of economies of scale,” he says. “The only thing that has been established at the moment is that it will have thermal storage. The specific technology has not yet been defined.”
However, he adds: “They consider the ability to include storage is key. In the long term, they believe a technology like CSP with storage has an important role to play, particularly in the north where the demand curve is flat because mines are consuming energy around the clock.
“Right now the area relies on coal-fired base-load plants and if you add PV then you still have the problem of how to generate the electricity without sunlight. There is a recognition that PV is part of the answer but they consider that here CSP offers an advantage.”
The Chilean government does not seem to be alone in this view. As reported in CSP Today, Ibereólica, a Spanish wind farm developer, is looking to invest $2.6 billion in a 360MW parabolic trough development with thermal storage.
Construction on the Pedro de Valdivia solar park, in Antofagasta, in the Atacama Desert, will begin at the end of the year after environmental approval was granted in August.
Involving two phases incorporating two 90MW plants each, the project will be one of the largest CSP developments in the world.
Meanwhile Abengoa Solar, another Spanish developer, is currently building a parabolic trough plant that will provide process heat for a copper mine operated by Minera El Tesoro, a subsidiary of Antofagasta Minerals, again in the Atacama Desert.
Abengoa claims the plant, with 1,280 collector modules, will cut the mine’s fossil fuel consumption by more than half and reduce emissions by about 10,000 tons of carbon dioxide a year.
Thanks to these projects, Chile now boasts a level of solar thermal project activity that far outpaces the scale of CSP market development elsewhere in Latin America.
Until now, and despite having a geography that surpasses Europe or North America in terms of its sunbelt exposure, Latin America has been notable for its lack of solar thermal projects.
Abengoa is now building a 14MW parabolic trough hybrid solar-gas plant in Agua Prieta, Sonora, for the Mexican Federal Electricity Commission, with funding from the Global Environment Facility of the United Nations Development Programme.
And as revealed in CSP Today, Argentina is mulling the introduction of measures to foster a solar thermal market. Meanwhile SkyFuel last August unveiled a 50 MW biomass-CSP hybrid plant project in Coremas, Northeastern Brazil. But that is about it.
The lack of developments may be due to the fact that Latin American nations do not have feed-in tariffs or other support mechanisms for renewable energy. So what is driving growth in CSP in Chile?
Part of the answer could be that the need for Atacama-based mining operations to reduce their reliance on fossil fuels seems to make for a decent business case for CSP.
Dr Andrew Skumanich, founder and chief executive of SolarVision Consulting, says: “As the rate of development in the Latin American companies grows, there is an increasing need for power to drive the economies.
“There are certain industries which could benefit from the advantages of CSP in the high irradiance regions of, for instance, the Chilean highlands. In these regions, a CSP plant with storage can be a cost effective power island for mining or other energy-intensive operations.”
He adds: “In some of these cases, the locations are in the sweet spot for CSP in that they are only partially grid connected, but need high power, and have the solar resources to drive the use of CSP."
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