Seventy per cent of the electricity from the wind farm's 50 turbines will provide 20% of the electricity consumed by AMSA's Los Pelambres, high in the Andes Mountains, with the remaining 30% sold to the spot market on central Chile's SIC grid. The 105MW El Arrayan project, 400 kilometres north of Santiago, is the largest wind farm in Chile.
The business model could open doors for wind energy in Chile. While other companies, such as Enel Green Power and GDF Suez, have already built wind farms in the country, to comply with a legal obligation to source 5% of power sold in Chile to come from renewable sources, they have largely sold electricity to the spot market, taking on significant risk and assuming higher financing costs.
With guaranteed sales to Antofagasta, Pattern was able to secure debt financing at a much lower cost, bringing down the final power prices.
"I don't think anyone had cracked the code, we were the first," Garland said.
Launching the wind farm, Chilean president Michelle Bachelet urged other mining companies to take up the gauntlet of developing the country's clean energy potential.
But while Chile's mining industry, which accounts for around a third of electricity use, represents an obvious partner for developers, government attempts to bring down electricity costs for domestic consumers could open up a new market for developers.
Under legislation submitted to Congress earlier this month, the government plans to open up the tenders held by distributors for long-term power purchase agreements to intermittent renewables such as wind and solar.
These tenders, first launched in 2006, have traditionally targeted baseload capacity, but difficulties faced by the power sector to develop new hydroelectric and thermoelectric plants — largely due to local environmental opposition — have meant contract prices have risen steadily to around US$130/MWh, levels at which renewable projects become competitive.
"The new rules would allow for real competition and would lead to a significant reduction of power costs," Garland said.
Bachelet and energy minister Maximo Pacheco have committed to reducing marginal costs on central Chile's SIC grid by around a third by the end of her four-year term in 2018 to around US$105/MWh.
Although Pattern has also studied wind potential in other South American countries, including Argentina and Brazil, Garland said the firm plans to concentrate its investment in Chile, partly due to political risk elsewhere.
"We are still not enamoured with other countries. We want to really expand our business here in Chile, and then will decide if we want to invest other countries. We still have got a lot in front of us," Garland said.