Drought-wary Chile to beef up genfuel stocks

Chile's power grid coordinator (CEN) is recommending a delay in the retirement of two coal-fired power stations, optimization of diesel stocks for power generation and higher LNG imports to mitigate supply risks in the next southern hemisphere winter.

In a 2 December grid security report, the CEN said the planned disconnection of the 208MW Ventanas 2 power plant operated by US utility AES and 350MW Bocamina 2 run by Italy's Enel should be postponed, without specifying until when.

On the surface, the delay would mark another setback in Chile's aggressive drive to decarbonize. But the CEN notes that keeping the two coal units in service would save 3,000m³/d (18,870 b/d) of diesel, which could be needed to run thermoelectric plants during the winter months of June-July 2022, if Chile experiences further drought in this normally rainy period when hydroelectric plants kick in.

On 29 December 2020, AES requested authorization to put its Ventanas 1 and 2 coal plants into reserve, but only the first plant was cleared to close. Ventanas 2 "will remain in operation until the date determined by the (CEN) and the security and sufficiency of the power grid requires," AES Chile said today. The company reiterated its commitment to decarbonization and the retirement of 1.4GW of thermal capacity.

Enel echoed its energy transition pledge and plan to retire its three coal plants. "The withdrawal of these units is backed up by the entry of our new renewable plants that will add 2.4GW of installed capacity by 2023," Enel said, blaming the effects of the Covid-19 pandemic and permitting delays for pushing back the renewable projects.

Daniel Salazar, former executive director of Chile's northern grid and current head of Santiago-based consultancy Energie, told Argus that the recommended delay in the coal retirements is "reasonable and expected" in light of the logistical and storage problems that thwarted diesel-fired back-up generation this year.

Diesel snags

In its report, the CEN said enough diesel should be available to permit 12,000m³/d (75,480 b/d) of consumption by thermal power stations for short periods. This threshold would require diesel power plants to hold combined maximum storage of 50,000m³. Power stations that use diesel as a back-up fuel should hold 27,000m³ of total stocks.

The grid coordinator and the energy ministry have noted that some diesel generators have not fulfilled their obligation to maintain enough feedstock on hand to meet short-term dispatch needs. On top of a lack of storage tanks and logistical bottlenecks, generators have been reluctant to sign diesel supply contracts with distributors because of dispatch uncertainty.

The CEN is also recommending that Chile's LNG importers boost their annual delivery program by three cargoes to ensure sufficient supply next year.

By Patricia Garip

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