Bankrupt renewable projects in Chile: victims of a hurried decarbonisation process?

Since its adoption in 2006, the regulated auction mechanism in Chile has driven most of the renewable capacity expansion in the country. Although the long-term power purchase agreements (PPAs) awarded in these auctions secure fixed revenue streams, losses may occur if generators do not manage risks well. Starting in September, two renewable generators – a solar and a wind plant previously awarded in auctions – communicated to the power market operator Coordinador Eléctrico Nacional (CEN) that they could no longer fulfil their financial obligations due to recurrent financial losses. With many other generators facing the same challenges, concerns have grown over the financial stability of the entire power market.