Chile seeks developer for power line needed for renewables expansion

Iberdrola among companies hoping to build transmission line to connect Chilean renewables to consumption hubs

Chile hopes to build the transmission line between renewable energy produced in the north of the country and consumption hubs in the south (pic credit: Fernanda Saiter/Flickr)

Companies from China, Colombia and Spain are competing to build a 1,500-kilometre transmission line through northern Chile which authorities believe will be crucial for developing the country’s potential for renewable energy such as wind and solar.

The 3GW Kimal-Lo Aguirre high-voltage direct current (HVDC) line will link Chile’s Atacama Desert, where developers are investing billions of dollars in solar and wind energy, with the capital Santiago, home to a third of the population.

“No doubt this is a project of strategic importance to Chile which will allow us to better deploy the renewable energy produced in the north of the country and transport to the consumption hubs in the centre,” said Juan Carlos Olmedo, the head of Chile’s national grid operator Coordinador Eléctrico Nacional (CEN).

Opening the administrative and technical offers presented in the tender to build the line, CEN said that two consortia had presented bids.

The Meval consortium consists of Spain’s Iberdrola and Elecnor subsidiary Celeo Redes while the Yallique consortium includes Colombian conglomerate ISA, Chilean transmission firm Transelec and China’s Southern Power Grid International.

Once the winning bid is announced in December this year, companies will have seven years to build the line.

Iberdrola estimates the cost of the project at more than $2.5 billion (€2.2 billion).

Chile is looking to a massive expansion in renewables capacity to achieve net zero emissions by the middle of the century.

But industry leaders have warned that limited transmission capacity between major cities and renewables projects in the north threatens to slow these plans, including an ambitious program to close all the country’s coal-fired power plants within 20 years.

After a previous transmission line was bogged down in dozens of legal challenges from landowners, delaying the connection of dozens of wind and solar projects, the authorities have introduced a new streamlined permitting process to ensure the new line can enter operations by the end of 2028.