Wind Energy in Chile – news and photos from Totoral, Ovalle, Vestas, and Barrick

Our trip to Chile’s IV Region has brought us up close and personal with Chile’s most high-profile wind energy projects.

Parque Eólico Totoral

On Ruta 5 Norte between Los Vilos and La Serena, you can see these turbines at the top of the hill.

Built by Norwegian developer SN Power, it contains 23 125m wind turbines, and generates 46MW of electricity. The project required an investment of $140,000,000 and opened in January 2010. The developers submitted the Declaración de Impacto Ambiental in 2007, and the project was approved in 2008.

The wind farm’s economic viability depends on carbon credits. The operation of this site implies a reduction of 65,000 tons of CO2 per year, which is equivalent to eliminating 15,000 cars from the streets of a city like Santiago. (Note: I am not sure if any plants were actually taken off the grid in response to the construction of this site. My guess is that this project adds extra electricity to the SIC, alongside electricity generated by other power plants – coal-fired, hydro, etc. Let me know if you have more information about this.)

I saw a Vestas truck driving around the property, suggests that these are Vestas turbines.

The scene was so dramatic that it made me wish that I had a fancy camera on hand to capture these images, instead of just my iPod Touch.

Here’s a map of Chile’s IV Region. (Click it twice to see a bigger version.)

115 MW Ovalle Project

In the September 23 edition of El Día, La Serena’s regional paper, I read that Ovalle will have the biggest wind farm in South America. More than 20 wind turbine towers will be installed on the coast of the jurisdiction to generate clean energy. 115MW will be entered into the SIC. The developer, an American company called Pattern AEI,  has been studying sites in this area since 2008, has determined that this site has the best wind in the zone. The company has held citizen consultations and has pledged to improve the roads in the area, which will benefit all residents.

100 MW Vestas Project in Limari 

From the Press Release: 

Vestas has started the construction of a fully owned wind project for 100 MW in Chile, the Talinay Oriente (‘Talinay East’) Wind Power Plant, which will be located in northern Chile in the Limari Province. This project, which will be constructed with the Vestas 2 MW platform, will at its completion be the largest wind power plant in Chile.

Vestas acquired full ownership of Talinay Oriente from a local developer. This is a strategic environmental decision following the Vestas principle “As green as it gets” and the company’s goal to continue increasing the share of renewable energy sources used to cover Vestas’ energy consumption worldwide and in the countries where Vestas operates, while contributing to reducing the carbon footprint. [more]

Barrick’s Parque Eólico Punta Colorado 

This wind farm is on the northern edge of the IV Region, in an area that is full of mines and some villages but otherwise a bit desolate.

Barrick is one of the world’s largest mining companies. The company invested $70 million in the 242- hectare site near the village of La Higuera. The first phase includes 10 turbines, and the complete project will include 18 turbines, and contribute 36MW into the SIC.

The slogan, “Un aporte de la mineria a las energias renovables en Chile” translates to “a contribution from the mining industry to the renewable energies in Chile.” The copywriter in me notes that this wording emphasizes the corporate social responsibility and public relations aspects of the project.

We got a lot closer to these turbines than those at Totoral. So pretty against the bright blue sky and rolling clouds.

For more information about Chile’s renewable energy laws and electrical grids, read this post: Chile’s Renewable and Non-Conventional Energy (ERNC) Law: Translation and Notes. 

On Solyndra, Failure and Energy Innovation

Yesterday I wrote about failure, and how it could be one of the keys to success. This connects to the recent controversy over Solyndra’s failure, as well as to energy and innovation in general.

Solyndra headquarters. photo via

I found this brilliant paragraph by Matthew Nordan, whose bio reads “I’m a venture capital investor at Venrock focused on energy and environmental technologies. Earlier, I co-founded and led Lux Research and forecasted technology futures at Forrester. I really do live and breathe this stuff.”

Failure is a fact of life in venture investing – and energy innovation. VCs provide capital to high-risk businesses that can’t be funded any other way. Most venture investments either fail completely or deliver mediocre returns. Cases like Solyndra come with the territory, and they say no more about all the other VC-backed energy start-ups than Webvan said about Amazon: The whole point is to risk failure, because you have to take on many (informed, balanced, and uncorrelated!) bets for a shot at a big outcome. Those outcomes, in turn, pay for the failures many times over – while improving lives and creating jobs. There’s a legitimate argument about whether taxpayer money should be deployed in this pursuit, but to treat even a very costly cratering like this one as anything other than de rigeur seems silly. [more]

Below are some several excerpts from reports about Solyndra’s failure.

First, the company’s original announcement. Emphasis mine. Solyndra Suspends Operations to Evaluate Reorganization Options

August 31, 2011 – Solyndra LLC, the American manufacturer of innovative cylindrical solar systems for commercial rooftops today announced that global economic and solar industry market conditions have forced the Company to suspend its manufacturing operations. Solyndra intends to file a petition for relief under Chapter 11 of the U.S. Bankruptcy Code while it evaluates options, including a sale of the business and licensing of its advanced CIGS technology and manufacturing expertise. As a result of the suspension of operations approximately 1,100 full-time and temporary employees are being laid off effective immediately.

I think it’s interesting that the press release emphasizes the macroeconomic nature of the problem, as well as the specific shutdown of manufacturing operations, since other operations could continue.

But this won’t be easy. This Greentech Media post distills Solyndra’s situation into a clever subhead: For sale: factory. In Fremont. Little used. IP portfolio as well. Serious inquiries only. Here are my favorite lines:

Any potential acquirer would also inherit a titanic-sized bookkeeping and public relations headache. Solyndra has received more than $1 billion from VC partners and over $535 million in loan guarantees from the Department of Energy. Congressional opponents of green policies like Michigan Congressional Representative Fred Upton regularly hold up Solyndra as an example of why the U.S. shouldn’t support green energy policies.

The only green jobs that have been created, one wag told me today, have been ones for accountants and bankruptcy attorneys. [more]

Well, Obama and other politicians do always tout “green jobs,” and accountants and bankruptcy attorneys need work, right?

Solyndra’s failure has become a political football, which is a valid debate but not without some misconceptions. In  a Washington Post piece, “Five myths about the Solyndra collapse,” Brad Plumer writes: 

 the fact that China hurls money at solar isn’t necessarily a bad thing, since cheaper solar prices can benefit the United States too. The Energy Department seems to have recognized that going toe-to-toe with China on direct subsidies may be futile and is instead trying to focus on complementary efforts to bolster innovation, through programs like its Sunshot Initiative. Also, for all China’s subsidy frenzy, the United States still exported$1.9 billion of solar products last year and actually has a trade surplus in solar with China. [more]

Also, a lot of the controversy has focused on the loan guarantees that the Obama Administration gave to Solyndra. Bryan Walsh, writing for TIME’s Ecocentric blog, says the Solyndra “Scandal” is Washington Business as Usual.

My response: meh. TIME’s Michael Grunwald has covered this from the start, and while he’s unhappy—to say the least—with executives at Solyndra for misleading the government on its financial health, the solar industry more broadly is doing well, thanks in part to the money the Obama Administration has channeled towards more successful companies. And it’s worth noting that in addition to government loan guarantees, Solyndra also scored over $1 billion in private capital—including from GOP-friendly investors like the Walton family of Wal-Mart. Solyndra turned out to be a bad investment—the company failed in part because it made the wrong bet on solar technology, failing to foresee that silicon prices would drop drastically. Bad investments are a part of business, especially a cutting-edge industry like renewable energy, and failure is a necessary ingredient for innovation. (Just ask the famously fired Steve Jobs.) The idea that the collapse of one solar company discredits the entire solar industry is absurd. [more]

What do you think? What does Solyndra’s failure mean for the future of solar energy in America and beyond? 


Chile’s Renewable and Non-Conventional Energy (ERNC) Law – Translation and Notes

If you read my blog for the fun travel photos (you know who you are :) ) please feel free to skip this rather nerdy post and go straight to My 7 Links.

If you’re interested in the laws that regulate and incentivize renewable and non-conventional energy in Chile, read on!

I’ve recently landed in Chile to work on a solar energy project, and one of my tasks is to learn about the legislation that guides this emerging industry. On March 20, 2008, President Michelle Bachelet signed Law 20.257 to encourage the development of renewable energy in Chile.

Photo of wind turbines in Coyhaique by Amanda Maxwell, Latin America Advocate for the Natural Resources Defense Council. Amanda's blog ( ) is an incredible resource for anyone researching renewable energy in Latin America.

I translated the first page of the law from Spanish to English. The full text (in Spanish) is here: Ley_ERNC_LEY-20257.

Quick disclaimer: I am not a lawyer, and it’s been almost six years since I took a Spanish class, and the following translation is based on my initial read of the law. However, I think that translating it has been a useful exercise, and I’d like to share it with anyone that’s interested.  The indented boxes below are notes to explain some technical terms in the text.

Introduction of Modifications to the General Law of Electrical Services, with Respect to the Generation of Electrical Energy from Sources of Energy that are Renewable and Non-Conventional

April 1, 2008

This law obligates the companies that generate electricity, with a capacity of more than 200 MW, to make sure that 10% of the energy sold comes from renewable and unconventional sources or from hydroelectric plants with less than 40,000 KW. This energy must be produced or procured, starting from January 1, 2010.

This law will apply to the generators that supply energy to the  Sistema Interconectado Central (SIC) and the Sistema Interconectado del Norte Grande (SING).

“Power generation in Chile is organized around four grid systems: 1) Sistema Interconectado del Norte Grande (SING), the northern grid, which accounts for about 19% of national generation; 2) the Central Interconnected System (SIC), the central region’s grid, which accounts for 68.5% of national generation and serves 93% of Chile’s population; 3) the Aysén Grid in southern Chile (0.3% of total generation); and 4) the Magallanes Grid, also in southern Chile (0.8% of total generation).” (Source: Global Energy Network Institute)

Chile's SIC Electrical Grid. The SING is in Chile's northernmost regions, which are not shown on this map. Source: GENI

This law signals that the percentage required of the electricity companies will increase gradually: 5% from 2010-2014, then +0.5% each year stating in 2015, until it reaches 10% in 2024.

The generators that fail to comply with this obligation will have to pay a charge of 0.4 UTM per megawatt hour (MWh) that does not meet the standard, and this will increase to 0.6 UTM in the cases of companies that continually fail to comply with the requirement.

UTM stands for Unidad Tributaria Mensual. According to Wikipedia it is a unit used in Chile for taxes and fines, which is updated based on inflation. It was created on December 31, 1944. Initially it was used by the Chilean tax authorities for fines and payscales, but since then its use has been extended to the payment of fines, debts, customs duties, and more. A chart showing its value every month for every year on record is here.

It is further provided that such charges arising from the breach of a distribution intended to end users (of the distributors whose suppliers have complied with the requirement) will help to establish a system of incentives that encourages competition in the electricity market.

The law indicates that the label “renewable and non-conventional energy (ERNC)” will correspond to small hydroelectric centers (with a capacity of less than 20 MW), and to projects that utilize energy from biomass, hydraulics, geothermal, solar, wind, tidal, and others.

The law goes on to describe modifications to specific articles, and I decided against translating that part.  The full text (in Spanish) is here: Ley_ERNC_LEY-20257.

President Sebastian Piñera just nominated a new Minister of Energy, Fernando Echeverría. In his new role. Echeverría plans to double the production of energy in the next ten years to meet Chile’s skyrocketing energy demand, lower the costs of energy, and strongly increase the participation of ERNC in the electrical grid. Read more here in La Tercera.

Excerpt from Obama to Piñera: Make Renewable Energy and Energy Efficiency the Base Case Scenario for Building Chile’s Energy Future. By Doug Sims, NRDC. March 17, 2011.

The conventional thinking about energy in Chile is that new coal, gigantic dams and nuclear are the only possible base case scenario given expected increasing demand requirements over the next 20 years.  This way of thinking pushes renewables, or “non-conventional renewable energy” (defined under Chilean law to include wind, solar, geothermal and other renewables but to exclude large dams over 20MW) to the margins – right now the goal for renewables is a pretty anemic 10% of annual generation by 2024.

But this is exactly the wrong way to think about Chile’s energy future given its world class renewable resources, its potential to reduce energy demand and intensity through efficiency measures and the declining cost curves and improving performance of renewable technologies, solar in particular.  In addition to a solar resource that exceeds that of the American Southwest, Chile is particularly fortunate to have excellent geothermal and sustainable biomass resources.  These non-conventional renewable energy technologies are mature and can provide cost effective power at reliability levels (known as “capacity factors”) comparable to coal, gas, hydro and nuclear.

Useful resources for further research on Renewable Energy in Chile: