Copihue Energía, part of Mainstream Renewable Power's Andes Renovables Platform, which has energy and power supply contracts awarded with distribution companies, requested this Wednesday to the Electricity Coordinator, the body that oversees the operation of the system, the need to temporarily withdraw its participation in the short-term market due to the delay in the construction of the 148.5 MW Caman wind farm, located in the Los Ríos Region.
The decision was taken by Copihue because its wind farm has not yet entered into commercial operation due to a series of factors that they described as beyond their control and beyond their control, causing delays in the construction of the project. The initiative has had several difficulties in its construction that have involved declarations of force majeure and logistical problems due to the consequences of the Covid-19 pandemic.
Mainstream - a company with Norwegian, Japanese and Irish capital - has been in Chile since 2008 with a total portfolio of close to 4,000 MW. It currently has 10 projects divided into three portfolios. One of them is Condor -already in operation- which has three wind projects and one solar project, supplying three power purchase agreements (PPA). Meanwhile, under construction, it has the Huemul portfolio, which has five projects (three wind and two solar), equivalent to 630 MW, supplying three PPAs. And finally, Copihue, which involves the Caman project that has been supplying a PPA since the beginning of last year.
In its role as short-term market participant, Copihue informed that it is financially unable to meet in due time and form the payment obligations of the economic transfer balances for the months of March and April 2023 (Ps. 2,128 million and Ps. 1,877 million, respectively). And that, along these lines, it is willing that these liabilities can be paid with the execution of the guarantee amounting to Ps. 6,529 million.
In any case, Copihue will again provide the corresponding guarantee in order to participate again in the short-term market as soon as the Caman project comes into operation. This would have been decided - it was reported - to avoid committing deadlines that could finally be extended in the midst of the difficulties.
According to sources, due to the contingency situations faced by the system -among them, the high systemic costs- they would have been forced to stop the daily operating loss in the short term that this obligation implies while they are in the construction phase. Thus, they can focus directly on moving the project forward.
In the afternoon, the Electricity Coordinator suspended the company as of June 1 and will collect the bill.
Background in the industry
This action is in addition to those communicated in recent months by María Elena Solar and Ibereólica Cabo Leones II in the midst of the crisis faced by renewable energy companies. However, although the practical effects would be the same as those implied by the suspension in those cases, it would not be a case of insolvency.
Thus, the PPA would remain in force, only that, for the period of the suspension, the obligation to supply that PPA is paused and the volume of the project will be distributed pro rata among the other platforms such as Condor, Huemul and third parties.
"Copihue has fully complied with the payments associated with Caman wind farm until March 2023 and has made available to the National Electric Coordinator the guarantee fund delivered to cover its outstanding payment obligations," Mainstream said when consulted. It added that, despite the current situation, the construction of the Caman wind farm continues to advance in order to achieve commercial operation as soon as possible," it said. And he emphasized: "Copihue reaffirms its commitment to the decarbonization of the Chilean energy market and the supply of clean energy to the country's homes and industries".