AES Andes advances in its renewable strategy with positive 2022 results

March 1, 2023

AES Andes continues to advance in the implementation of its Greentegra transformational strategy. During 2022, it managed to incorporate new renewable operations into its portfolio, in addition to innovative initiatives and important advances in its decarbonization process.

In order to contribute to making the mining and technology industries in Chile more sustainable, the Company signed long-term supply contracts for 2.9 TWh/year in 2022, among which Google, Teck and Codelco stand out.

In addition, the Company reached 2,299 MW of renewable capacity, after adding more than 730 MW during 2022, with the entry into operation of the Los Olmos and Mesamávida wind farms, together with Alto Maipo in Chile and the Brisas solar project in Colombia.

With this, the firm reaches 46% of its capacity based on technology free of CO2 emissions.

Javier Dib, CEO of AES Andes, assured that "although we still have a long way to go, the transformation of our portfolio is already a reality, reflected in our emission-free projects that are already providing renewable energy to the system and another important number of projects in our pipeline slated to start commercial operations in 2023, in addition to the launch of pioneering initiatives that confirm our Company's commitment to the decarbonization process that the country is carrying out".

Better conditions in the three markets where the Company operates led to an EBITDA of US$811 million during 2022, US$72 million higher than the normalized result for 2021 and US$264 million lower including the extraordinary impact of the agreement with BHP in Chile registered in 2021.

Chile had a positive variation mainly associated with higher contract margins due to lower physical purchases in the spot market and more renewable generation thanks to the entry of new wind projects.

Meanwhile, the positive variation in Colombia was explained by a rise in sales prices in the spot market, partially offset by the devaluation of the local currency.

In Argentina, there were higher margins for contracts associated with a lower supply cost, greater recognition for insurance recovery and an increase in income from the Energía Base spot market as a result of the greater availability of the Termoandes plant.

In 2022, the Company reported a net profit of US$277 million, which compares positively with a net loss of US$1,091 million in 2021. The variation is mainly explained by the improvement in operating results and by the accounting impacts recorded in 2021 related to the decarbonization process and the deconsolidation of Alto Maipo.

The CEO of AES Andes highlighted that "these results reflect the Company's resilience when it comes to completing the transformation of our matrix into renewable energy, which is the result of the commitment of our clients and our collaborators with our Greentegra strategy".

Advances in decarbonization

The Company received authorization from the National Energy Commission (CNE) for the withdrawal, disconnection and cessation of operations of unit 1 of the Ventanas Power Plant as of June 30, 2022. This coal-fired unit was in "Operational Status of Strategic Reserve" since December 29, 2020. By the year 2025 the Company will have closed, sold or separated from contractual obligations 73% of its coal-fired generation units and will continue with the necessary efforts to make the supply more sustainable energy of its clients.

New innovative solutions

AES Andes continued to advance in the implementation of its Greentegra strategy during 2022, with the incorporation of new energy solutions at the forefront in terms of innovation.

During the last quarter of 2022, the Company began the environmental permitting process for its Alba project, a pioneering initiative worldwide that seeks to be an alternative for the conversion of thermoelectric plants through the use of molten salts. The project explores the possibility of replacing the current coal-fired generation of units 1 and 2 of the Angamos Thermoelectric Power Plant, located in Mejillones, Antofagasta Region, with a system of molten salts. With this technology, renewable energy is stored in the form of heat to later be used to provide energy and emission-free capacity to the electrical system.

AES Andes also announced the launch of the first green hydrogen Open Season in Chile, after having received environmental approval for Adelaida, its first project with this energy vector in this country. Through this ongoing process the Company seeks to activate the market and trigger a specific demand from companies in the Antofagasta Region interested in using green hydrogen to make their operations more sustainable.

Adelaida contemplates the construction and operation of a green hydrogen (H2V) production plant located in the facilities of the Angamos Thermoelectric Power Plant. It will have a green hydrogen production capacity of 1,000 kg/day, equivalent to 2.5 MW of power. It also considers two H2V charging stations for vehicles that use hydrogen as fuel, especially from mining, port or other industrial companies.

Gender equality

AES Andes continued to make important progress in terms of gender equity during the past year. This is reflected in concrete results, such as an increase in the number of women in leadership positions and a greater female workforce. While at the end of 2021, 21% of women held leadership positions, at the end of 2022 the figure reached 27%. Meanwhile, the firm's total female workforce increased its presence from 10% (3 years ago) to 17% today.

AES Andes continues to advance in the implementation of its Greentegra transformational strategy. During 2022, it managed to incorporate new renewable operations into its portfolio, in addition to innovative initiatives and important advances in its decarbonization process.

In order to contribute to making the mining and technology industries in Chile more sustainable, the Company signed long-term supply contracts for 2.9 TWh/year in 2022, among which Google, Teck and Codelco stand out.

In addition, the Company reached 2,299 MW of renewable capacity, after adding more than 730 MW during 2022, with the entry into operation of the Los Olmos and Mesamávida wind farms, together with Alto Maipo in Chile and the Brisas solar project in Colombia.

With this, the firm reaches 46% of its capacity based on technology free of CO2 emissions.

Javier Dib, CEO of AES Andes, assured that "although we still have a long way to go, the transformation of our portfolio is already a reality, reflected in our emission-free projects that are already providing renewable energy to the system and another important number of projects in our pipeline slated to start commercial operations in 2023, in addition to the launch of pioneering initiatives that confirm our Company's commitment to the decarbonization process that the country is carrying out".

Better conditions in the three markets where the Company operates led to an EBITDA of US$811 million during 2022, US$72 million higher than the normalized result for 2021 and US$264 million lower including the extraordinary impact of the agreement with BHP in Chile registered in 2021.

Chile had a positive variation mainly associated with higher contract margins due to lower physical purchases in the spot market and more renewable generation thanks to the entry of new wind projects.

Meanwhile, the positive variation in Colombia was explained by a rise in sales prices in the spot market, partially offset by the devaluation of the local currency.

In Argentina, there were higher margins for contracts associated with a lower supply cost, greater recognition for insurance recovery and an increase in income from the Energía Base spot market as a result of the greater availability of the Termoandes plant.

In 2022, the Company reported a net profit of US$277 million, which compares positively with a net loss of US$1,091 million in 2021. The variation is mainly explained by the improvement in operating results and by the accounting impacts recorded in 2021 related to the decarbonization process and the deconsolidation of Alto Maipo.

The CEO of AES Andes highlighted that "these results reflect the Company's resilience when it comes to completing the transformation of our matrix into renewable energy, which is the result of the commitment of our clients and our collaborators with our Greentegra strategy".

Advances in decarbonization

The Company received authorization from the National Energy Commission (CNE) for the withdrawal, disconnection and cessation of operations of unit 1 of the Ventanas Power Plant as of June 30, 2022. This coal-fired unit was in "Operational Status of Strategic Reserve" since December 29, 2020. By the year 2025 the Company will have closed, sold or separated from contractual obligations 73% of its coal-fired generation units and will continue with the necessary efforts to make the supply more sustainable energy of its clients.

New innovative solutions

AES Andes continued to advance in the implementation of its Greentegra strategy during 2022, with the incorporation of new energy solutions at the forefront in terms of innovation.

During the last quarter of 2022, the Company began the environmental permitting process for its Alba project, a pioneering initiative worldwide that seeks to be an alternative for the conversion of thermoelectric plants through the use of molten salts. The project explores the possibility of replacing the current coal-fired generation of units 1 and 2 of the Angamos Thermoelectric Power Plant, located in Mejillones, Antofagasta Region, with a system of molten salts. With this technology, renewable energy is stored in the form of heat to later be used to provide energy and emission-free capacity to the electrical system.

AES Andes also announced the launch of the first green hydrogen Open Season in Chile, after having received environmental approval for Adelaida, its first project with this energy vector in this country. Through this ongoing process the Company seeks to activate the market and trigger a specific demand from companies in the Antofagasta Region interested in using green hydrogen to make their operations more sustainable.

Adelaida contemplates the construction and operation of a green hydrogen (H2V) production plant located in the facilities of the Angamos Thermoelectric Power Plant. It will have a green hydrogen production capacity of 1,000 kg/day, equivalent to 2.5 MW of power. It also considers two H2V charging stations for vehicles that use hydrogen as fuel, especially from mining, port or other industrial companies.

Gender equality

AES Andes continued to make important progress in terms of gender equity during the past year. This is reflected in concrete results, such as an increase in the number of women in leadership positions and a greater female workforce. While at the end of 2021, 21% of women held leadership positions, at the end of 2022 the figure reached 27%. Meanwhile, the firm's total female workforce increased its presence from 10% (3 years ago) to 17% today.