Concentrated PV

High insolation rates and the presence of large corporate power users could make Chile an attractive market for CPV even in the absence of government support.

CPV arrived in South America with a grand entrance. The region’s first pilot plant, EMS-01, was greeted with dignities and cocktails at its unveiling in the Macul district of Greater Santiago, Chile, last month.

If you want to see upcoming projects, however, be prepared for a trek: the current hotspot for future development is way off the beaten track, in the high, still wastelands of the Chilean Atacama Desert.

EMS-01 developer EnorChile, a 10-year old conventional power company that four years ago chose to focus on renewable energy, has several reasons for thinking CPV is a great fit for conditions in Atacama. First there is the amount of sunlight.

Parts of the desert are among the sunniest places on earth, with a daily direct normal irradiance of more than 9 kWh/m2, says Rodrigo Sáez Rojas, EnorChile’s chief executive officer.

In theory, that makes it great for all types of solar energy, but the efficiency of traditional PV arrays would be hampered by the desert’s huge daily temperature fluctuations: between -5ºC and 35ºC in winter and 15ºC and 45ºC in summer.

Such concerns are not a problem for concentrating technologies and indeed much of the renewable energy development in the Atacama is focused on concentrated solar thermal power (CSP), with Abengoa, GDF Suez and Solar Energy Chile all considering projects.

However, installing CSP plants is also tricky because of the scant water resources of the region.

EnorChile is choosing to develop plants with SolFocus SF-1100S tracking CPV systems, which only need about four gallons of water per MWh for cleaning, in comparison to the 800 to 1,000 gallons or 105 gallons needed for a wet-cooled or dry-cooled CSP plant, respectively.

Regulatory environment

Finally there is the regulatory environment. Chile already gets most of its energy from renewable sources, and specifically hydro-electric power, which accounts for roughly 60% of the total.

Most of the balance comes from coal and gas, but in recent years there has been growing interest in the potential for developing other renewable energy sources, and in particular solar energy.

In May this year at least a dozen PV projects had been announced or were under development in the country.

However, in view of the experience in Spain and elsewhere, Chilean policy makers have opted to dispense with the carrot of subsidies and instead wield a stick of mandatory minimum renewable energy use through Renewable Portfolio Standards (RPS).

Currently the RPS is set at 5% of total energy consumption, rising to 10% by 2020, but the administration is set to increase this top level to 20%.

For large energy users, such as the mining companies currently exploiting reserves in the Atacama Desert, the easiest way to fulfil this legal obligation might be to buy solar power directly from a local CPV operator such as EnorChile.

“We think the best scenario is to connect directly to these companies, although there are clients that want the same thing through the grid,” says Sáez. “In that sense we have an advantage because we are energy generators so we know how to feed into the system.”

CPV development

For others it might not be so easy, he adds: the Chilean energy system is heavily regulated and this adds cost and complexity to connecting renewable power systems. Though for now it seems EnorChile has the Atacama to itself, in terms of CPV development, at least.

The company is pushing ahead with plans for three or four pilot plants in different parts of the desert over the next six months, and up to 15 MW installed in the next three years, using a combination of its own funds and a loan from the Export-Import Bank of the United States.

Currently the nearest active CPV market is Mexico, where SolFocus is partnering with local renewable energy developer Granite Chief on a 1 MW facility, Baja Sun Energy is planning a manufacturing plant and Skyline Solar has broken ground on a 500 kW site.  

And in the absence of any form of government stimulus, Gabriela da Rocha Oliveira, head of Latin America research and analysis with Bloomberg New Energy Finance, believes the best bet for CPV developers in Chile will be to follow EnorChile’s lead and deal direct with customers.

“In Chile, as there are no government subsidies developers are ad-hoc-ly trying to partner up with big consumers like the mining companies,” she says. That’s how most of these projects are going to be developed.”

Brett Prior, GTM Research senior analyst, agrees CPV still faces challenges. “Where national population centres are is far from the Atacama Desert,” he says.

Nevertheless Sáez remains upbeat about CPV’s prospects in the country, to the point of considering it a litmus test for other markets. “Chile is clearly a world where, if you can’t develop solar energy, you won’t be able to do it anywhere without incentives,” he says.