A Solar Mother Lode for Chile's Mines

The Atacama Desert in northern Chile has two claims to fame: It's where 33 miners were trapped underground for nearly 10 weeks last year, and it's one of the driest—and sunniest—places on earth, with some areas receiving rainfall just once a decade. The miners, of course, are part of the copper-rich region's biggest industry, and the sunshine explains why mining companies there are starting to use solar energy to power their operations.

More than a dozen solar installations are planned for the barren plateau in the Andes, which gets up to 9.28 kilowatt-hours of sun power per square meter each day, nearly double what Las Vegas receives. Solar companies say the strength of the sunshine means they can provide the region's dozen or so large mines and hundreds of smaller ones with electricity at prices rivaling energy from plants that burn fossil fuels. Atacama "has good sun resources and big, unfulfilled demand for power from mining companies," says Tim Keating, marketing chief at Skyline Solar, a California company that is in talks with several mines to provide photovoltaic equipment.

Developers see a strong market for their electricity among the Atacama's power-hungry mines, which typically require anywhere from 10 to 400 megawatts of power. More than 80 percent of the electricity used in northern Chile is sold to mining operations, and demand will likely grow at least 5 percent annually for the next several years, according to Santiago energy researcher Systep Ingeniería y Diseños.

Santiago-based Atacama Solar has applied for a permit to build a $773 million, 250-MW solar farm in the region by 2018. Element Power of Portland, Ore., is planning five 30-MW projects near mines in the Atacama. And Spanish energy developer Solarpack Corp. Tecnologica this year will open a 1-MW plant at a mine owned by Corporación Nacional del Cobre de Chile, the state-owned copper mining company known as Codelco.

Swiss mining giant Xstrata says it is studying solar installations for its mines in the Atacama. Codelco says that if the Solarpack project goes well, it expects to expand its use of solar power at mines in the region. "We have an energy resource here that's absolutely unique," says Silvia Tapia, who oversees renewable energy projects for Codelco. "It's where our operations are, so it's obvious we should use it."

Chilean utilities currently sell electricity on the spot market for about 12 cents a kilowatt-hour, though some mines have long-term contracts for 8 cents to 10 cents per kilowatt-hour, Systep estimates. Solarpack says its Codelco plant will be able to sell electricity for 10 cents to 14 cents per kilowatt-hour with no subsidies—which would make it the only large solar facility on earth to operate profitably without government support, according to Bloomberg New Energy Finance. Solarpack is planning two additional 9-MW solar generating stations nearby that it hopes to use to provide power to Codelco. The intense sunshine in the Atacama, says Jon Segovia, a director for Solarpack's Chilean unit, "means you can produce more electricity for the same investment."

The bottom line: With its abundant sunshine and power-hungry mines, Chile's Atacama Desert is seeing a boom in solar power development.

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