World’s largest merchant solar project goes online in Chile

SunPower has completed Project Salvador in Northern Chile, five months ahead of schedule. At 70 MW this the largest solar plant in the world which sells the electricity it generates on the spot market.

On Monday, SunPower officially connected Project Salvador to the grid in Chile’s Atacama Desert. At 70 MW this is the second-largest PV plant to go online in the Chile, which is Latin America’s largest solar market.

Salvador is also the largest merchant solar plant to be completed in the world, which means that the plant holds no power purchase agreement and sells the electricity it generates on the spot market. This is a business model which Chile is leading due to a combination of conditions including high spot prices for electricity in certain nodes in the nation’s Central Grid (SIC), where Project Salvador is located.

SunPower CEO Tom Werner has said that he sees room for more merchant projects in Chile, and expects the model to spread to other nations. “Think of it as the beginning of a trend that we are going to see in the rest of the world,” Werner told pv magazine.

The plant is owned 70% by Italian developer Etrion, 20% by Total and 10% by a Chilean developer, and incorporates SunPower’s high-efficiency PV modules and its Oasis Power Block technology.

In many ways, the project owes its existence to the United States. Project Salvador received a project loan through the U.S. government’s Overseas Private Investment Corporation (OPIC) which covered 70% of the US$200 million in project costs. OPIC is the largest lender supporting a boom of large utility-scale projects in Chile, and as of June 2014 had provided $887 million to five solar projects, including the 100 MW Amanecer project.

Project Salvador is sited on land leased from the Chilean government, and connected to the SIC grid through the power infrastructure of state-owned copper mining company Codelco. SunPower will operate and maintain Project Salvador through a long-term, fixed-price operation and maintenance contract.