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Alstom is Entering Chile CSP Market,200MW CSP project to be developed

French industrial group Alstom plans to enter the Chilean concentrating solar power (CSP) market, as part of efforts to boost its presence in the growing South American renewables sector beyond Brazil.
Although present in Chile in the transmission and thermal power sectors with 400 employees, Alstom is now poised to offer technology, services and equipment in renewables, the company’s Chile president Julio Friedmann told Recharge.

Alstom is negotiating with a power group in the country to develop a CSP project of between 100MW and 200MW, whose electricity will be offered via this year’s regulated-market auction.

The Chilean project will be developed in partnership with BrightSource, the US CSP tower-technology specialist in which Alstom has a minority stake.

alstom

“There has been an explosion of opportunities as electricity spot prices are high and oil imports are brutal,” Friedmann said.

The two companies are constructing the first 130MW phase of the 250MW Ashalim CSP project in Israel’s Negev Desert.

After Brazil, Chile is the second-largest solar and wind power market in the region, followed by Uruguay.

With no fossil fuel reserves and with over 50% of the country’s power supply coming from gas-, coal- or diesel-fired generation, Chile has set targets to reduce power prices at auctions by 25% in the coming years, and source 20% of its electricity from renewables by 2025.

Solar has surged from almost nothing in early 2014 to more than 550MW now, while wind is currently at just under 900MW of a total installed capacity of 19GW. Solar, wind, biomass and small-hydro generation currently account for 10% of total power supply.

“The 20% target will be met without problem, by the end of the year we’ll see 1GW of solar power installed,” said Friedmann.

Although most of the solar being developed in Chile deploys PV technology, CSP has gained some momentum in a country with one of the world’s highest irradiation levels and ample, forest-less and thinly-populated desert areas of the northern Atacama desert.

There is currently one 110MW CSP project under construction. However, another 980MW has been approved by environmental authorities, making Chile one of the CSP pioneer regions along with Israel, South Africa and Spain.

Although Friedmann declined to reveal details of the project, he said that Alstom will deploy the molten-salt storage technology that is being tested at the 121MW Ashalim project in Israel, also with Brightsource.

Renewables are also driving Alstom’s local transmission business, as it recently won a contract from Transmisión Eléctrica del Norte (TEN) to build three 500kV substations and expand an existing one, as part of a transmission line project to link Chile’s main central network to its northern grid, where most of the renewable projects are located.

“Our decision to offer AC technology helped us get selected by the grid company, since the technology allows better integration of wind and solar power sources,” Friedmann said.

With the substation and the 600km line in place, Chile can ease a transmission bottleneck that currently limits the amount of renewables that can be installed. The link between the two grids is expected to be ready in 2018.

The evolution of the Chilean market has raised the prospect of the wind power sector opening up further – Vestas, Nordex and Gamesa are already present and supplying turbines.

Friedmann did not confirm or deny a suggestion that Alstom was looking at opportunities in wind, noting that more major foreign developers are being attracted to Chile.

“These traditional power companies tend to chose traditional equipment suppliers,” said Friedmann, although no deals have been closed yet.

Alstom is already supplying machines in Uruguay, the third biggest market in South America, and as the Brazilian market reaches maturity, it is ready to look at Argentina, whose huge wind and solar potential could start to be developed by regulatory changes, expected to be concluded this year.

Chile is the location for Alstom’s commercial office for Latin America outside Brazil, and despite the prospective fusion with GE, due to be approved soon by European authorities, Friedmann expects business to continue more or less unchanged.

“If it goes ahead, I see both companies as complementary, and together we will be able to offer a bigger portfolio of products to our clients,” he said.

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