Power generation and distribution company AES has signed an agreement with the Chilean government to close 1.1GW of its coal power generation in the country as soon as 2025.
Accounting for roughly 20% of Chile’s installed coal capacity, the agreement represents the “single largest coal retirement announcement by any power company in Chile”, according to AES.
Under the plan, AES could retire the plants by January 2025, although this is subject to the requirements of Chile’s power grid.
The announcement is part of AES’s decarbonisation strategy, which involves the sale and retirement of coal assets combined with increased deployment of renewables. It has plans to invest US$3 billion to build 2.3GW of renewables and storage in Chile and Colombia through 2024.
“AES Andes is a great example of how we have committed to responsibly decarbonize the Chilean electricity sector,” said Andrés Gluski, AES president and CEO.
Globally, the company has already announced the sale or retirement of nearly 12GW of coal capacity. It has reaffirmed its 7%-9% average annual growth rate target through 2025, from a base year of 2020.
The Chilean government was represented by the country’s president Sebastián Piñera, Juan Carlos Jobet, minister of mines and energy and Carolina Schmidt, minister of the environment.