Transmission system key bottleneck for renewable energy development in Chile
A recent interview describes transmission issues being a key bottleneck in renewable energy development in Chile, with no liquid market driving down profit margins for energy projects in certain parts of Chile.
In a recent interview on solar opportunities in Chile, there were some interesting points about the Chilean energy market that could also give some indications of the challenges faced by renewable energy and thereby also by geothermal projects in Chile.
The grid is seen as a great hurdle to development, with bottlenecks in the transmission system described as the main reason for declining marginal price of energy in Chile’s spot market.
According to Joost Samsom, Co-founder and Partner at Netherlands-based financial advisory firm Voltiq, this essentially this is “putting a brake on market development”.
While talking mostly of solar in this interview, it shows the difficulty about renewable energy entering only specific parts of the grid and the more they enter, “the higher the chance that the marginal price of energy approaches zero.” “Ninety percent of off-take in the north of Chile is in the mining community,” Samsom said.
He says that transmission capacity would need to to be expanded. With an over supply of energy in certain parts of the country, and no real liquid market across Chile, achievable prices and profit margins make banks hesitant to finance projects.”
For the full article see link below.
Source: Jessica Mills-Davies, “Interview: Declining marginal prices in Chile are “putting a Brake” on development” (Clean Energy Pipeline August 11, 2015) via LinkedIn Pulse,