Eddie O’Connor’s Mainstream Renewable Power has won contracts from the Chilean government to build and run $1.65 billion (€1.46 billion) of wind and solar plants.
The company was one of the main beneficiaries of what was the most competitive and biggest electricity tender in the country’s history. The auction attracted 84 bids from Chile and abroad, including European firms Gas Natural, Ibereolica, Acciona Energia, Austrian Solar and Solairedirect.
Demand for energy has soared in recent years in Chile, which has among the highest power prices in Latin America and an energy-intensive mining industry that produces more than a third of the world’s copper, much of it from remote desert areas. It also has some of the largest reserves in the world for lithium, which is used to make batteries for smart phones and electric cars.
In all, Chile’s renewable energy auction equates to about a third of supply to regulated customers in Chile. Mainstream’s allocation equated to about 27 of the total allocations awarded for power to be supplied into the system from January 2021.
The contracts “have turned the [local] electricity market on its head,” saidBart Doyle, the general manager of Mainstream’s operation in Chile.
“Unlike in Europe, most of the conventional players in the market haven’t invested in solar or wind energy. The country has three or four large incumbents but only one of them, Endesa [a unit of Italy’s Enel], has any renewable projects.”
Endesa Chile was the only long-established local company to win a contract. Mainstream, which entered the Chilean market in 2009, has build up the most comprehensive portfolio of wind and solar projects in the country, extending to over 2,000 megawatts, it said in a statement.
Mr Doyle said Mainstream intends to use some of the proceeds from the group’s current equity-raising efforts to part fund the plants, with the remainder from bank funding. Financing for the initial part of the Chilean projects is likely to be in place by mid- to late-2017, he said.