Coal news and updates

A controversial bill to speed up Chile’s plan to retire coal generation from its power matrix by banning construction and operation of such plants starting in 2026 cleared the lower house and is now set to move to the senate.

 

The bill was approved on Tuesday with 93 votes in favor, five against and 47 abstentions, while a modification that would set the date of the ban as the same day the US$1.5bn Kimal-Lo Aguirre transmission line enters operations (estimated for 2028) was rejected.

 

The bill faces strong opposition from Chile’s energy authorities, with minister Juan Carlos Jobet arguing it would “simplify to the level of absurdity a problem that is very complex” as many safeguards have to be considered to properly allow for the retirement of coal-fired capacity.

 

The bill would override a 2019 agreement struck by the government and Chile’s four large-scale coal plant owners – AES Andes, Enel, Engie and Colbún – that set a calendar for full retirement by 2040.

 

The original deal involved the retirement of eight of 28 coal-fired plants by 2024, with the rest being shut down gradually by 2040 as part of a bid to make the country carbon neutral by 2050.

 

However, recently asked by BNamericas, Jobet said he was confident that technological advancement could allow for full retirement before 2040.

 

The head of Chile’s grid coordinator CEN also recently told BNamericas that the coal retirement plan would accelerate as long as the retirement of a specific plant did not increase end-user prices, adversely affect service quality or require replacement by even more polluting technologies such as diesel plants.

 

Industry discussion of the bill has centered on whether Chile has the necessary transmission capacity to properly operate a grid that relies more heavily on renewable generation, as well as whether these plants can replace coal-fired capacity, which can generate power any time of day and currently stands at some 5.5GW.

 

The text argues that the closure of coal-fired generation is necessary to reduce pollution and help Chile achieve its commitments under the Paris climate accord. In particular, the bill focuses on the risks faced by communities that live near large-scale coal-fired power plants who face the brunt of the environmental consequences.

 

On the floor of the lower house, Jobet warned that the bill could have unintended consequences and argued Chile is lacking adequate transmission capacity to carry enough energy from its renewable generators in the north to consumption hubs in the center-south.

 

As BNamericas reported previously, national energy commission CNE has also argued against the bill by saying that a full retirement scenario starting in 2026 would be one where “one risks much more than one gains” with regards to the power system. If conducted, the electric system would have to take extreme measures immediately, CNE said last year.

 

The bill now goes to the senate.

 

Source : https://www.bnamericas.com/en/news