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Published on June 6th, 2016 | by Saurabh Mahapatra


Solar Power Price In Chile Falls To Zero Due To Global Copper Glut, Transmission Woes

June 6th, 2016 by  

While a global copper glut may have helped the solar industry with reduced prices for the inter-connectors needed in solar modules, it may also hurt it in some areas, causing solar power be sold off to the grid for free.

Solar power project developers in northern Chile are facing this problem. The region is home to several copper mines which were supposed to the major buyers of the solar power. Global copper oversupply and low prices mean low production at mines and low power consumption.

This scenario has forced the project developers to supply power to the grid for free.

According to media reports, developers are now struggling to generate revenue from their projects. However, the problem is more about localized demand and transmission constraints. Projects are unable to supply power to other areas of the country due to lack of transmission infrastructure.

In a bid to have their power ‘picked,’ developers may be forced to offer power for free. Until April of this year, prices in the spot market were zero on 113 days. Prices were zero for 192 days during 2015.

Chile is facing the same issue as China, which developed large-scale solar as well as wind energy projects in the interior provinces. Lack of transmission lines to supply that power to major demand centers like Beijing and Shanghai means that a large portion of that power is lost. 

Chile is now planning to set up a 1,865 mile long transmission line to transfer this power to other parts of the country.

Earlier this year, Chile achieved 1 GW of installed solar power capacity with several major project developers, including Acciona, Enel Green Power, Pattern Energy, EDF and Marubeni, and SunPower, which are working on large-scale solar power projects.

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About the Author

A young solar enthusiast from India keeping an eye on all regulatory, policy and market updates from one of the fastest emerging solar power markets in the world.

  • Robert Pollock

    Isn’t there a battle that just started in Nevada, between Solar City (Musk) and the Nevada Power Co. (the utility company, what ever the name is, they have a monopoly on the state) ?
    Nevada Power is owned or mostly influenced by Warren Buffet’s investment foray into renewables. The utility wants to build solar and wind farms and connect them to the existing grid, Solar City wants to dispense with the Utility’s monopoly so they’ll be allowed to sell smaller, more individualized systems that would be less dependent on the grid. Of course this is the path to ‘no grid’, so the utilities are desperate to control developments. And you can bet both groups have their eyes on government subsidies, big time.

  • nakedChimp

    sounds to me a in-efficient allocation of resources has happened there.. couldn’t they have build half of those pv farms closer to the population centers right from the start?

    • Frank

      Hindsight is 20-20. They were building it for the mines.

    • JamesWimberley

      The life of a pv plant is 30 years. Developers will have zero prices for part of the time for two years or so. They can do arithmetic.

    • Robert Pollock

      I’d go further: The idea of solar farms is the problem. Those who own the grid are trying to stay in control, by advocating for changes that include them. The whole point of de-centralizing the grid is to generate power where it’s used. Especially when the source electricity is DC, and has to be converted to AC to be moved, without incurring unacceptable resistance losses while in transmission. We went all through this in the 1890’s. The fight between GE, Thomas Edison and Tesla is well documented.
      Here in Palm Springs, we have over 3000 giant wind turbines, (some are 240 feet) that generate a city’s worth of electricity, which is “transmitted” out of the valley to god knows where. LA for sure, maybe Vegas. I won’t bother to show the numbers on how incredibly stupid that all is.
      So the entrepreneurs in the story here sell their electricity to the guys they buy their copper from? That’s their only customers except for all the ones on the other side of the Andes mountains?
      My own property is too large for DC transmission, so I put a low resistance AC line from one end of the house to the other, and added a sub panel of 100 Amps. That’s so I can put up a few thousand watts of PV panels over here, or over there, and DC cables to a connection point will be shortest.

      • Bob_Wallace

        Decentralizing with renewables is about spreading out harvesting over larger areas in order to even out sunshine and wind availability.

        The best sites for solar and wind are not likely to be at the point of use. If you look where people live not that many people live in the windiest parts of the country. And most people avoid the really sunny (away from the coast) parts.

        Where to install is a tradeoff between amount of energy produced per solar panel/wind turbine and the cost of transmission.

    • Matt

      The best price they could get was from the copper mines. When they planned the PV farms no one said that the bottom was going to drop on copper prices.

  • Ross

    According to this the legacy coal generators have more flexibility to reduce their output so not as much curtailment of solar is needed.


    • Frank

      Nice link. Realliy interesting that more installations are still happening.

  • JamesWimberley

    The north-south link is not just a plan, it has been under construction since last July (link). It should open in 2017.

    • neroden

      Sounds like it’ll be profitable, what with “Free” power from the north!

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