SunPower is joining a number of solar companies developing large-scale projects in Chile. SunPower’s majority shareholder, Total, has partnered with Solventus Energias Renovables and Swiss-based Etrion Corp. on Project Salvador, a 70 megawatt PV plant in the Atacama region of Chile. SunPower, which will build the project and provide ongoing operations and maintenance for the project, said it is the largest solar power project based on spot market electricity or merchant revenues.
The $200 million project will be financed through the U.S. government’s Overseas Private Investment Corp., which will provide 70 percent of the financing. The loan, approved by OPIC's Board of Directors on Sept. 19, will have a 19.5-year payback period and is expected to close in the fourth quarter of 2013. The companies will provide the rest of the equity financing. The project will primarily be owned by Etrion, which will have a 70 percent share of the project. Total will have a 20 percent share and Solventus a 10 percent stake.
"Project Salvador is an important step in the process of transforming the capabilities of solar power in the world. This merchant project confirms that solar energy is becoming competitive with other conventional energy sources," said Philippe Boisseau, President of Marketing & Services at New Energies and a member of the Executive Committee of Total.
"Solar power is a compelling proposition in Chile due to the amount of solar irradiation received every day in the region. Combined with Chile's high electricity prices, large energy demand and low construction costs, solar can compete with traditional sources of electricity in Chile without government subsidies.”
He added that Total is interested in other energy projects in the country as well.
While the solar farm could secure a power-purchase agreement in the future, it will initially operate on a merchant basis. As such, it will sell the electricity produced on the spot market, delivering it to Chile’s Sistema Interconectado Central (SIC) electricity network through the power infrastructure of Corporacion Nacional del Cobre de Chile (Codelco). Other U.S. companies, including First Solar and SunEdison, are also building PV projects in Chile based on current market electric prices there.
"This is a very exciting opportunity for Etrion to work alongside Total, SunPower and Solventus in Chile,” Etrion CEO Marco Northland stated. “Project Salvador will demonstrate that solar is a viable and sustainable power solution in Chile given the strong solar irradiation and high electricity prices in the region. This project diversifies our portfolio in terms of geography and contract regime, demonstrates our ability to compete with traditional sources of electricity in a non-subsidy environment and provides a clear platform for growth that will give Etrion the option to declare dividends in the future."
Construction on the project is slated to begin in the fourth quarter of 2013 and is expected to be completed sometime in 2015, at the absolute latest. The farm will consist of SunPower’s SunPower Oasis Power Blocks systems, which use its modules and single-axis trackers.