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Chile

Chile

Analysis: Envison plans expansion into South America

CHILE: Chinese manufacturer Envision sees its range of turbines as key to exploiting the wind potential of Chile, where it has just set up a regional office to cater to the South American market.

An Envision low wind turbine being installed
An Envision low wind turbine being installed

The company recently opened the $33 million second stage of the Ucuquer wind farm in central Chile. This is Envision's first ever project in South America, adding five 2.1MW turbines, with 110-meter blades, to the existing 18.5MW project. Ucuquer has been in operation since late last year.

Ucuquer, built in association with local renewables developer Coener, is now Envision's beachhead not just for Chile but the whole of South America.

"We are very bullish about Chile and very excited to be here," Envision executive director Felix Zhang told Windpower Monthly. The firm is in the process of hiring a local team, which will be supported by Envision specialists in Houston, California and Denmark.

As well as high power prices, the upcoming integration of the country's two main grids, the business-friendly regulatory systems and the promising economic outlook all bode well for the development of wind and solar energy over the next few years, Zhang said.

Envision believes its turbine range, available in capacity from 1.5MW to 3MW, means it has the breadth to  exploit the wide range of environments found along Chile's 4,000-kilometre coastline.

In northern and central Chile, wind speeds tend to be relatively low (6-6.5 meters per second), while in Patagonia, wind speeds can be much higher. Zhang is also confident that it has the technology to be able to exploit the high wind speeds found at high altitudes, such as the 4,000 metres above sea level found in the Andes Mountains.

Other interesting markets in the region include Colombia and Peru, which together with Chile are members of the Pacific Alliance, a two-year-old trading bloc seeking to promote free trade and economic integration in the region.

In all countries, Envision's strategy is to develop ties with partners on the ground with local expertise while it provides the financing, technology and manufacturing capacity.

Mexican potential

That is what Envision has done in Mexico, where it recently signed a strategic alliance with infrastructure development specialists Interacciones. Although the venture is still at an early stage, Zhang says Envision will be well-placed to exploit the deregulation of the country's electricity market from next year.

Legislation enacted last month by Mexico's president, Enrique Peña Nieto, will break the monopoly of the Federal Electricity Commission over the power market, allowing private generators to sell direct to third-party consumers for the first time.

"Mexico looks much more exciting from 2015 and beyond, and everyone has got their eyes wide open as to what is going to happen," said Zhang, predicting that the country could add 1GW annually of new wind capacity from next year.

The potential on Mexico's hurricane-prone coasts is huge, from the Gulf Coast and the Yucatan peninsula to Oaxaca and Baja California, which face the Pacific. The long border with the US, facing Texas, could contain yet more potential.

South America's largest electricity market, Brazil, is also investing heavily in wind energy, but local content requirements to receive financing from state development bank BNDES mean that it is not an easy market to enter. For now, Zhang says Envision is monitoring the situation in Brazil.

Envision plans to finance projects from a range of sources, he added. As well as loans from China's Export Import credit Bank and the China Development Bank, it also strong relations with international groups such as Santander and Deutsche Bank.

It also has links with multilateral lenders such as the Inter-American Development Bank and IFC from World Bank and could qualify support from government agencies in other countries where it has operations.

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