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Hard to Imagine - Free Solar Power in Chile

10 Jun 09:00 by Steve Walia

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Chile is now generating so much solar power that its prices for the clean and green renewable energy often drop to zero. The news is fantastic for the country's consumers but can become frustrating for investors and energy firms, and it is an interesting case study for Europe.

The country has been aggressive in its attempts to grow its solar energy capacity, and last year alone it brought 371MW of power online. However, infrastructure has failed to keep up: many areas are still entirely unserviced and there is still no national grid, meaning that some areas have an influx of solar and others have none.

The areas flooded with an excess of solar have found that the current price has plummeted to zero more than 100 times in the past year - and the figure for this year looks set to increase.

Chile has a central and northern power grid, but plans are on the way to join up both by 2017 with the addition of 3,000km of new transmission lines. This should help to stabilise the price by making the solar power available across the country. The government is also building 750km of new lines to avoid grid outages.

New solar plant developments are expected to bring 1.4 GW of fresh capacity online this year, so Chile may find that its situation gets more challenging before it eases. The risk, of course, is that low prices discourage firms and investors from looking to the country, and banks may be disinclined to lend for new power plant funding. The pressure will be on to get the new infrastructure in place quickly as a result to persuade potential providers of funding that the country's green energy ambitions are a worthwhile investment for the longer term.