Gigawatts of BESS Opportunities in Chile: Key Risk
Battery storage projects cannot come soon enough for Chile. While Chile has been at the forefront of renewable energy generation growth in Latin America for close to a
Battery storage projects cannot come soon enough for Chile. While Chile has been at the forefront of renewable energy generation growth in Latin America for close to a decade, that growth has most recently undergone serious growing pains.
With transmission lines at overcapacity and permitting delays slowing the development of new grid infrastructure, battery energy storage systems (BESS) have surged as a profitable alternative for Chilean power producers.
In fact, batteries charged at nearly $0/MWh during the day in the sunny, northern desert regions of Chile, sell energy at night for over $100/MWh. Although projects such as Engie's BESS Coya are already enjoying these large spreads, this capacity payment will partially de-risk Chile's dependence on volatile, but still profitable, merchant revenues.
Pursuant to Law 21,505, the Chilean Ministry of Energy has proposed to amend the regulations on capacity payments to allow for those payments to be applicable to energy storage systems.
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