Sept. 26 (Bloomberg) -- Total SA, Europe’s third-biggest energy company, is planning the world’s largest solar farm that won’t rely on subsidies in Chile’s Atacama desert with developers Etrion Corp. and Solventus Energias Renovables.
The 70-megawatt photovoltaic project will cost $200 million and initially sell electricity to Chile’s central power grid, Paris-based Total said today in a statement.
Solar developers are heading to northern Chile where sunny weather and high energy prices make bigger projects viable. Other large solar farms require government support in the form of higher rates for their output or tax breaks to be profitable, according to Jenny Chase, head solar analyst with Bloomberg New Energy Finance.
“This is the world’s biggest solar project that’s not receiving subsidies,” Chase said today in a telephone interview from Zurich.
Construction will begin in the fourth quarter and the plant is expected to start producing power by the first quarter of 2015.
Etrion, a Geneva-based renewable-energy producer, will own 70 percent of the project, leaving Total with 20 percent and Solventus Energias Renovables, a Spanish renewable-energy developer, with 10 percent.
Overseas Private Investment Corp., the U.S. government’s development finance institution, will provide 70 percent of the project’s cost with U.S. dollar-denominated debt. The companies will shoulder the rest of the cost based on their respective stakes.
SunPower Corp., the second-biggest U.S. solar manufacturer that’s majority owned by Total, will build the plant and provide the panels, according to the statement.
The solar company expects to get as much as 20 percent of its revenue from Latin America in 2020, up from less than one percent now, Tom Werner, chief executive officer of San Jose, California-based SunPower, said today in a telephone interview.
Solar panels “can produce energy at very, very economic rates in Chile,” he said. “The math works for that part of the world to be big in solar.”
Royal Dutch Shell Plc and BP Plc are Europe’s biggest energy producers. First Solar Inc. is the biggest U.S. solar manufacturer.
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