One of Chile’s biggest power generators, Generadora Metropolitana, is prioritizing renewables investment and has a 1.5GW portfolio of solar-storage assets either under construction or holding an environmental license.
Today operating four thermoelectric plants with combined capacity of 750MW, the company also has an LNG import terminal project – Penco Lirqúen – that was recently given the nod by Chile’s committee of ministers, which rules on challenges concerning environmental licensing decisions.
The subject of environmental opposition, the Biobío region project was first submitted for review in 2014 and its price tag of US$165mn has likely ballooned.
“We value the backing of the committee of ministers for the Penco Lirquén LNG terminal. Natural gas is a low-polluting, reliable fuel and hence fulfils a strategic role in the secure and effective energy transition,” the company told BNamericas.
Generadora Metropolitana underscored its green focus. “For this purpose, the company ill continue spurring renewable energy projects that support the country’s goal of achieving carbon neutrality by 2050.”
The company is completing the construction of 480MW Atacama region solar thermal plant CEME1. Other company projects, the 200MW Pampina (solar PV-battery storage) and 800MW Sol del Loa (solar PV-battery storage), have been granted environmental approval.
Generadora Metropolitana also has planned, for Ñuble region, a 640MW combined-cycle power project in the early works phase and in recent days submitted for evaluation a US$16mn project to extend the useful life, and boost capacity, of a 136MW simple-cycle plant. The company this year upgraded 14 burners at the power station to permit the use of natural gas as the principal fuel, with diesel as backup, according to documents filed with environmental review agency SEA.
ANALYSIS
Flexible natural gas-fired units, as well as energy storage systems and synchronous condensors, are seen as grid-stability solutions as renwables penetration climbs in Chile and the country retires its coal-fired plants.
Fossil fuel-related projects in Chile, as well as hydropower schemes, are exposed to risk of generating environmental opposition. A hydrocarbons importer with little domestic production, the country has two LNG terminals and has resumed limited firm imports of piped natural gas from Argentina, which is working to boost production at the Vaca Muerta unconventional hydrocarbons formation and spur exports. Generadora Metropolitana is among importers of Argentine gas, via the GasAndes duct.
Taking these factors into account, along with Chile’s goal of having an emissions-free generation park by 2050, major new greenfield fossil fuel-related projects appear to face headwinds. Zero-emission projects or those designed for future conversion to sustainable fuels, such as green ammonia, could hold a competitive edge.
In related news, Antofagasta region’s SEA office is due to decide on November 29 whether to gran an environmental license to fellow generator AES Andes’ 560MW Alba project, which involves carrying out molten salt energy storage reconversion work at its Angamos coal-fired generation complex.
BNamericas will publish its 2024 regional oil and gas sector outlook report in the coming days.