Engie plans to shutdown almost 1GW of coal fired thermal power generation capacity in Chile and Peru between 2019 and 2024.
The company announced the plans during COP25 in Madrid.
In Chile the closures concern two coal units located in Mejillones, totalling 334MW, by 2024.
In June 2019 the energy company closed two coal units in Tocopilla, corresponding to 170MW is following up with a further two coal units in the same site, equivalent to 270MW by 2021.
In Peru Engine will close 135MW of coal generation by 2022.
The coal closures follow Engie’s commitment to build 1GW of new solar and wind capacity in Chile, worth $1bn.
The first two projects – Capricorn solar park and Calama wind farm – are under construction, while a third project, Tamaya solar park, will begin construction in the first quarter of 2020. The first three projects total 370MW.
In line with Chile’s decarbonisation plan, Engie recently signed a letter of intent with the Inter-American Development Bank (IDB) to structure a long-term loan for up to $125m to finance investments in renewables.
IDB has developed an instrument to lower the financial cost of renewable energy projects for companies that own coal-fired power plants, monetising the reduction in emissions.
Engie chief executive Isabelle Kocher said: “Engie confirms the rapid movement towards a zero-carbon transition. The previously announced closures of two units in Tocopilla, the announcement of the closure of two units in Mejillones by 2024 and of two more units in Tocopilla by 2021 are an important part of Chile’s plan.
“The group has also accelerated the pace of renewable energy development in Chile by committing to build 1GW, including 370MW already secured.
“As a leader in zero-carbon transition, we have the expertise to design roadmaps to carbon neutrality with national governments, as well as with multinational companies, local authorities and universities. The end of coal-fired electricity generation is a process that creates value, both economic and environmental, when strategically planned.”