Chile Giving Away Free Energy As Solar Power On Its Central Grid Has Quadrupled Since 2013

The Latin American country of Chile could serve as a model for clean power as the solar industry has expanded so quickly electricity is being given away for free. But this isn't necessarily a good thing for solar companies.

According to Bloomberg, spot prices for electricity in certain parts of the country has been zero for 113 days through April and is on pace to beat last year's total of 192 days where consumers didn't pay for electricity. This is good news for consumers and for the environment, but bad news for companies that own power plants that are struggling to generate revenue.

The northern tip of Chile has seen a boom in economic growth due to increased mining production and helped spur the creation of 29 solar farms with another 15 being planned. The problem is that a global glut for copper production has now resulted in the solar plans oversupplying a region that lacks transmission lines to transport the excess electricity elsewhere.

Solar capacity has more than quadrupled to 770 megawatts since 2013, most of which can be traced to the northern section of the country.

"Investors are losing money," said Rafael Mateo, chief executive officer of Acciona SA's energy unit, which is investing $343 million in a 247-megawatt project in the region that will be one of Latin America's largest. "Growth was disordered. You can't have so many developers in the same place."

Chile's government is working to address the issue and plans to build a 1,865-mile transmission line to bring power to other regions of the country.

"Chile has at least seven or eight points in the transmission lines that are collapsed and blocked, and we have an enormous challenge to bypass the choke points," Energy Minister Maximo Pacheco told Bloomberg. "When you embark on a path of growth and development like the one we've had, you obviously can see issues arising."

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