Chile Decommissions 500 MW of Coal-Fired Power Generation

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Researched by Industrial Info Resources (Sugar Land, Texas)--On September 30, Chile took another step forward on its decarbonization plan with the closure of 500 megawatts (MW) of coal-fired power generation.

The closures included the 370-MW Bocamina II, owned by the local subsidiary of ENEL SpA (Rome, Italy), and the 132-MW Tocopilla U15, which is owned by ENGIE S.A. (La Defense, France), a subsidiary of Electroandina S.A.

In the case of ENEL, this was a major landmark; following the closure of the 130-MW Bocamina I plant in December 2020 and the 158-MW Central Termica Tarapacá in December 2019, Bocamina II was the last operational coal-fired unit in Chile. ENEL's generation in Chile is now 100% coal-free.

The decommissioning of these units was part of a process that began in 2019, when the Chilean authorities and companies operating coal-fired plants in the country signed an agreement for zero coal-fired power generation by 2040. The initial agreement was signed by Engie Energia Chile S.A.; Enel Generacion Chile S.A.; AES GENER S.A. (now AES Andes) (Santiago, Chile) and Colbun S.A. (Santiago). The plan called for decommissioning 28 coal-fired power units in two phases: eight units by the end of 2025 following a detailed schedule, and the remaining 20 between 2026 and 2040.

But soon after, most of the companies sped up the process, and a new schedule proposes to close 18 units by 2025; the remaining 10 could cease operating on coal by 2030.

Between June and December 2019, 329 MW went out when Engie shuttered units 12 and 13 of the Tocopilla Complex and ENEL group took similar measures at the Tarapaca Power Plant. During 2020, ENEL took offline its 128-MW Bocamina I unit, while AES closed the 120-MW Ventanas 1 unit. Earlier this year, ENGIE shuttered the 125-MW Tocopilla Unit 14. As a result, the first eight units initially scheduled to be decommissioned by the end of 2025 were disconnected from the grid three years ahead of schedule.

Regarding the remaining operational units, AES Andes expects to close the 220-MW Ventanas Unit 2 in 2023 and the remaining 520 MW of the Ventanas Complex (units Nueva Ventanas and Campiche) and 560 MW of the Angamos Complex could be taken offline in 2025.

AES also has two operational units at the 294-MW Nueva Tocopilla (ex-Norgener) complex and another two at the 560-MW Cochrane complex, but there is no scheduled closing date for them. In July 2021, AES Andes relinquished its participation in the 784-MW Guacolda Complex to Chilean investment holding company Capital Advisors (Santiago), which now controls 100% of the plant and has yet to announce any planned closing dates.

ENGIE Group still has one gigawatt of coal-fired generation in Chile, but the company has plans to completely cease burning coal by 2025. To do so will require the closure of two 170-MW units in the Mejillones Complex and the conversion of a 375-MW unit (Infraestructura Energética Mejillones) to natural gas. AES plans to burn biomass at the two fluidized bed boilers at the 340-MW Andina & Hornitos complex.

Finally, Colbun has a 350-MW unit at its Santa María plant. According to the agreement signed with the authorities in 2019, this unit should be decommissioned only by 2040. Several environmental and local groups have pushed for the company to speed up the closure, but Colbun hasn't announced any changes.

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Coal-fired power plants accounted for 22% of the electricity produced in Chile in August, but major solar and wind generation investments are being carried out to compensate for the lost thermal generation. Industrial Info is tracking US$6.7 billion being developed by ENEL, Engie, AES Andes and Colbun for the construction of 2.35 GW of new wind capacity, 3.7 GW of solar capacity and nearly 370-MW of Battery Energy Storage Systems (BESS). BESS projects are needed to improve the reliability of renewable energy generation, and Chile is the undisputed leader in the development of BESS projects in Latin America.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).