EDP Renováveis is entering the Chilean market, where half the energy is still produced by burning fossil fuels. It has signed agreements to buy a 628 GW wind and solar portfolio.
EDP Renováveis (EDPR) will enter the Chilean market by investing up to 38 million dollars in the acquisition of a 628 MW solar portfolio. Operations are expected to start between 2023 and 2025 and the company is optimistic about the outlook.
“The Chilean power sector is sizeable and still highly energy dependent with thermal generation currently representing c.50% of the generation mix,” EDP Renováveis said in a statement sent to CMVM.
At stake are two distinct agreements signed with two energy companies in Chile. The first covers a 77 MW wind farm with a 20-year Power Purchase Agreement (PPA). It should start producing electricity in 2023, according to the company. The asset is currently owned by Atacama Energy.
The second contract covers a total of 551 MW of projects under development, including two wind farms of 297 MW and a solar project of 254 MWac (a nominal unit of photovoltaic power). According to EDP Renováveis, these projects will take part in “the upcoming regulated auctions” in Chile and in the Power Purchase Agreement market. They should come into operation by 2025 and are currently owned by Lader Energy Chile.
“With regards to renewables, Chile has strong fundamentals both for wind and solar, and a stable regulatory framework with visibility on long term PPAs both through regulated tenders and the increasingly growing private PPA market,” explains the EDP subsidiary.
In addition, the company recalls that Chile “has set ambitious plans to fast track towards RES, with a national roadmap targeting to reach 20% of its power mix coming from non-hydro by 2025, 60% by 2035, and 70% by 2050, and has significant potential for the development of large-scale green hydrogen projects, providing an attractive long term growth outlook for renewables in the country.”
This portfolio is also a reinforcement of the electric company’s presence in the Latin American market, “where it currently owns 0.4 GW of operating capacity and 1.1 GW of secured capacity in Brazil and 0.5 GW of secured capacity in Colombia.”