Chile Reports Excess Solar Electricity

Chile is reported to have an oversupply of solar electricity — so much it is said to be giving away free solar electricity. This is a problem many cloudier nations would be more than happy to trade for.

Chile infographic shutterstock_222164083

Chile is now giving away solar energy for free, states a recent Bloomberg report. This may be great news for consumers, but it is creating a financial sinkhole for utilities and others who play an integral role in the clean energy distribution infrastructure.

“Spot prices reached zero in parts of the country on 113 days through April, a number that’s on track to beat last year’s total of 192 days, according to Chile’s central grid operator. While that may be good for consumers, it’s bad news for companies that own power plants struggling to generate revenue and developers seeking financing for new facilities.

“Chile’s increasing energy demand, pushed by booming mining production and economic growth, has helped spur development of 29 solar farms supplying the central grid, with another 15 planned. Further north, in the heart of the mining district, even more have been built. Now, economic growth is slowing as copper output stagnates amid a global glut, energy prices are slumping and those power plants are oversupplying regions that lack transmission lines to distribute the electricity elsewhere.”

The need for an efficient an equitable distribution infrastructure is part of the problem, fed by a glut in the copper mining industry.
According to CleanTechnica, solar power project developers in northern Chile are facing this problem. The region is home to several copper mines which were supposed to the major buyers of the solar power. Global copper oversupply and low prices mean low production at mines and low power consumption.

But free power? Booming economic growth, spurred in part, from copper mining, is viewed as leading to the construction of 29 solar farms, and plans for 15 more, feeding Chile’s “central grid.” That is a lot of clean power in quick order, great news for addressing climate change and cleaning the atmosphere, except for one thing: this solar bubble, much like what happened with real state, has all happened too quickly and without a sound economic foundation.

Planned infrastructure improvements

The Chilean government intends to address some of these issues with infrastructure improvements, including a new 3,000-kilometer (1,865-mile) transmission line linking the northern and central grids.

In addition, a 753-kilometer (467-mile) transmission will help better distribute power on the central grid.

Then a saner revenue model will be essential.

Chile energy infographic via Shutterstock

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