Pacific Hydro and its investment in clean energy in Chile

The company is engaged in the construction of its first wind project in northern Chile, Punta Sierra (82 MW), as well as a 500-MW line of run-of-the-river hydro projects in central Chile’s Cachapoal Valley.

Founded over 20 years ago in Australia, Pacific Hydro stands out for its development of renewable energies. It operates wind farms and run-of-the-river hydro plants and has recently branched out into solar technology.  

Its arrival in Chile began over 15 years ago when the company took the decision to internationalize, investing in renewable energy projects. In Chile, it found all it was seeking: a stable country with a dynamic economy and clear rules as well as great potential for the development of renewable energies.

Developing clean energy in Chile

The company’s first step was the acquisition of the Coya and Pangal plants (76 MW) with their century-long history of supplying power to Codelco’s El Teniente mine in central Chile. It went on to partner with Statkraft in the development of the La Higuera run-of-the-river plant (155 MW) - which, at the time, was the largest of its type in the world to register under the Clean Development Mechanism of the Kyoto Protocol - and the La Confluencia plant (164 MW). A couple of years later, the company built the Chacayes plant (111 MW), which is also certified to issue carbon credits, thereby contributing to mitigate climate change.

Today, Pacific Hydro is engaged in the construction of its first wind project in northern Chile, Punta Sierra (82 MW), located near the town of Ovalle, as well as a 500-MW line of run-of-the-river hydro projects in central Chile’s Cachapoal Valley.

These latter projects are being implemented under a new owner, China’s State Power Investment Corporation (SPIC), a world leader in renewable energy. It operates a capacity of over 10,000 MW in wind power as well as being the world’s largest solar operator, with a capacity of 5,000 MW.  

These projects are significant in that they are SPIC’s first experience in OECD countries like Chile and Australia.

Emblematic project

The company, which has 120 employees locally, is building its first wind farm in Chile. The project is the outcome of a long process that has included nine years of wind measurements, design and successful applications for environmental permits. The project’s engineering was also developed internally, integrating teams from Australia and Chile and then incorporating the experience of SPIC.

The farm, which is located in the Ovalle municipal district, represents an investment of some US$150 million. Its installed capacity will reach 82 MW, with a load factor of 39.5%, and the company estimates that it will generate around 280 GWh/year, equivalent to the consumption of some 130,000 households, for injection into the country’s Central Interconnected System (SIC).

Punta Sierra will have 32 2.5-MW Goldwind turbines and each three-blade rotor will have a diameter of 121 meters while the towers will have a height of 150 meters. This wind farm will also permit a reduction of 165,000 tonnes of carbon emissions per year.

Long-term outlook      

In Chile, the company has a portfolio of projects at different stages of development and takes an optimistic view of the future of the country where it hopes to continue taking advantage of the great wealth of resources to generate more clean energy sustainably.

For the company, Chile is synonymous with clear rules and stability. The company also underlines how the sector has changed in recent years, pointing out that today the outlook is very different: a new tender system that has given the market greater dynamism, an integrated system (SIC-SING) and even the prospect of exporting energy to neighboring countries, all of which open new opportunities for energy generators.

Pacific Hydro is constantly evaluating investment opportunities and sees Chile as a privileged position from which to expand the business to other markets in the region. This was demonstrated recently by SPIC’s winning bid to acquire the 1,710-MW São Simão hydro plant in Brazil for US$2,267 million.