SANTIAGO – Chilean state-owned energy company Enap has signed a contract with Enel Green Power, a unit of Italy’s Enel, for the construction of a geothermal power plant in the northern region of Antofagasta, a project that will be the first of its kind in South America.
The final agreement was signed last Saturday, financial daily Pulso reported Thursday, citing Maximo Pacheco, Chile’s energy minister and Enap’s chairman.
Pacheco made the announcement Wednesday during a meeting of the lower house’s Mining and Energy Committee, saying the Cerro Pabellon project will mark Enap’s entry into the power generation business.
The 50 MW Cerro Pabellon project, which will produce electricity from volcanic steam, will entail an investment outlay of roughly $180 million and enter into operation in late 2016.
Construction of the plant will take between 16 and 17 months and can begin now that the definitive contract has been signed, Pacheco said.
Once completed, it will produce some 375 gigawatt-hours of electricity annually for the country’s northern grid, which accounts for around 19 percent of national generation.
Enel Green Power has a 51 percent stake in the project, while Enap holds the remaining 49 percent.
The companies obtained the environmental license for this long-awaited project in 2012.
Enap CEO Marcelo Tokman told Pulso in an interview earlier this year that energy-hungry Chile has enormous geothermal potential but that the challenge is to implement the technology to tap that energy source.
Separately, Enel said Thursday in Rome that Enel Green Power has begun construction of a new solar plant – Finis Terrae – in the Antofagasta region that will be the largest of its kind in Chile.