Chile’s solar power industry has been pumping out electricity like no tomorrow. So much so, they’re giving it away for free. But while consumers might rejoice at this news, big money investors aren’t so pleased.
Chile has rapidly expanded their solar industry over the past few years. Along with the massive Atacama 1 solar complex in the sun-drenched north, Chile is home to 28 other solar power plants, with plans to build 15 more. Bloomberg reports this recent influx of solar power has created a surplus that's resulted in spot prices of zero for 113 days between January and April in many parts of the country.
Apart from Europe, Chile has some of the world’s most progressive and ambitious plans for clean energy. There have been discussions to make “non-conventional renewable sources” account for about 70 percent of Chile's energy supply by 2050. A large chunk of this percentage will come from solar power. Since 2013, the country’s power grid has already quadrupled its solar capacity to 770 megawatts.
These past few years have also seen developers swarm to jump on Chile's solar bandwagon, in part to power its growing mining industry in the north. But along with global economic sluggishness, the market became crowded and their national grid created a surplus of electricity. Equally, outdated infrastructure meant that the country's transmission lines were unable to distribute the electricity evenly and quickly enough.
While it’s promising to see such a bold move towards clean energy, the fear is that investors will now be put off from venturing into new energy sources.
“Investors are losing money,” Rafael Mateo, chief executive officer from energy investors Acciona SA, told Bloomberg. "Growth was disordered. You can’t have so many developers in the same place."
Germany’s power grid had a similar story last month, where it produced so much electricity from renewable energy sources that they effectively paid consumers to use it.