As of April 1, 2013, 9.8 gigawatts of large-scale PV projects had been announced in Latin America and the Caribbean. Currently, the generating capacity of projects in operation is just 114 megawatts. Of the 9.8 gigawatts' worth of announced projects, 731 megawatts have signed off-take agreements of some sort (power purchase agreements, feed-in tariff contracts, etc.) and a further 168 megawatts are under construction. These large numbers have generated a lot of hype for various Latin American markets, in particular, for Chile, Mexico, and Brazil.
As we have seen, however, hype does not generate PPAs or project finance (especially when the power purchaser is a utility owned by a government that has a junk bond level credit rating, such as Argentina). While gigawatts of PV will not be coming on-line in Latin America in 2013, we can at least expect the following five projects to begin generating electrons sometime in the near future.
SunEdison’s 100-Megawatt Llano de Llampos Project in Chile
At the end of January, SunEdison announced that it had signed a PPA with Chilean mining and steel group CAP. Not only will SunEdison sell CAP electricity at a rate that’s competitive with what can be purchased in Chile’s volatile spot market, but SunEdison will also use CAP steel to manufacture a tracking system in-house for the project. SunEdison will also use MEMC branded modules, and, when all is said and done, the project will be built for an estimated $2.41 per watt (DC). Considering SunEdison’s track record as a successful global project developer and EPC, we can expect this project to come on-line in late 2013 or early 2014.
Kirchner Solar Groups’ 54-Megawatt Monte Plata I Project in the Dominican Republic
Currently being built by the German construction firm JRC Electronics, global project developer Kirchner Solar Group is inching closer to completing the 54-megawatt Monte Plata project, the largest PV array in the Dominican Republic. Construction commenced in summer 2012, and when complete in 2013, the facility will sell electricity to the Corporación Dominicana de Empresas Eléctricas Estatales (CDEEE), the state-owned electricity generation and distribution holding company, via a twenty-year PPA. Capital costs for the project are reported to be $150 million, or $2.78 per watt (DC). Originally slated for completion in the first quarter of 2013, no formal announcement has yet been made that the plant is on-line.
Sonora Energy Group’s 47-Megawatt CFE Project in Mexico
Sonora Energy Group (SEG), an American-Mexicansolardeveloper, has a signed a twenty-year PPA with the Comisión Federal de Electricidad (CFE), Mexico’s state-owned utility, for its 46.8-megawatt SEGH-CFE I project in the state of Sonora. Though rates will vary over time, in the first year SEG should expect to receive about at $0.18 per kilowatt-hour. Though specific project details remain hazy, a key component of this deal going through was clear site control. Other developers cite a lack of transparency surrounding environmental permitting information and land reform as a bottleneck to utility-scale development in Mexico. Conveniently, the land for SEDGH-CFE 1 is privately owned and directly adjacent to a 632-megawatt heavy fuel burning power plant operated by CFE. Other than citing JP Morgan Chase as one of the principal investors in this project, SEG has divulged little about other projects or its organization in general, though it claims to have development activities ongoing around the world.
The PPA awarded to SEGH-CFE I is the first privately owned solar generation facility in Mexico to receive an IPP generator permit. ABB built the substation and Yingli has been contracted to supply modules.
Solarpack’s 26-Megawatt Pozo Almonte Solar II & III in Chile
Solarpack has already achieved significant success in the Peruvian solar market, executing nearly 60 megawatts of government-sponsored projects in the country. In Chile, the firm has already completed the 1-megawatt Calama Solar III project in April 2012, which sells power to Codelco, a mining company. Last week, Solarpack announced financing for its Pozo Almonte II & III, which combine for a total capacity of 25.5 megawatts. The project will sell electricity to the Collahuasi mining conglomerate. Forty million dollars will be provided by the Inter-American Development Bank (IDB) and the Canadian Climate Fund, which is partly administered by IDB. Pozo Almonte II & III and Calama Solar III reportedly cost $82.7 million in total, implying an average capital cost of $3.13 per watt (DC). The larger two projects are slated for completion before the end of the year.
Sky Solar’s 21-Megawatt Arica I Project in Chile
Sky Solar, which has previously announced plans to develop 300 megawatts of solar with a $900 million investment in Chile, broke ground on its 20.7 megawatt Arica I plant in October 2012. The company has announced it will finance the entirety of the project on its own balance sheet, which suggests it has yet to secure an off-taker for the electricity. According to project documents, capital investment required is $70 million, implying a turnkey cost of $3.38 per watt (DC). Sky Solar is working with Chilean engineering firm Sigdo Koppers to build the plant.
Want to learn more? Read the recently released GTM Research report Solar in Latin America & The Caribbean 2013: Markets, Outlook & Competitive Positioning before attending Greentech Media's 6th Annual Solar Summit conference, April 22-24 in Phoenix, AZ, where industry experts will discuss these project developments and more on a panel titled Latin America: From Bragawatts to Gigawatts.
Update: Watch the discussion between GTM Research analyst Andrew Krulewitz and industry experts at Solar Summit 2013: