AES Gener Consolidates its Renewable Transformation
February 24, 2021
By 2024, the Company shall have tripled its renewable capacity and closed, sold or released from contractual obligations 72% of its coal-fired generation units
Santiago, February 24, 2021.- AES Gener ended 2020 with a solid operational and financial performance, confirming the resilience of its Greentegra transformational strategy through which it will reduce the carbon intensity of its portfolio, make the supply of its customers more sustainable, and strengthen the Company’s investment grade.
AES Gener’s EBITDA in the last quarter of the year was 65% higher than that of the same period of the previous year, and at the end of 2020 reached a record level of US$1045 million, 25% higher than in 2019. These results are largely due to a strong performance in Chile and the agreement for the early termination of contracts in Angamos.
The CEO of AES Gener, Ricardo Falú, said: “The results obtained during 2020 show that our Company is resilient. Despite the adverse conditions we all face with the COVID-19 pandemic, we continue to execute our Greentegra strategy by accelerating the decarbonization of our portfolio and our renewable growth, which will help us to have two-thirds of our EBITDA and more than half of our installed capacity coming from renewable energies in 2024.”
Falú emphasized that AES Gener will not keep any coal plant in operation one day longer than necessary to meet its contractual commitments and the system’s needs for reliability. In this sense, by 2024, the Company will have closed, sold or released 72% of its coal-fired generation units from contractual obligations, significantly reducing the carbon intensity of its portfolio.
Since the launch of Greentegra in May 2018, AES Gener has entered into renewable contracts for 10.5 TWh per year. In terms of capacity, it has added 221 MW of renewable and battery capacity to its portfolio and currently has 1133 MW under construction. In this way, by 2024 AES Gener will have tripled its installed capacity of renewable energy and batteries, incorporating a total of 2.3 GW in addition to its portfolio.
Finally, Ricardo Falú reaffirmed the commitment of AES Gener emphasizing that “we will continue to work together in a responsible transition towards emission-free energy sources, contributing to the decarbonization goals of the markets where we operate, and accelerating the sustainable transformation of the electricity sector.”
Main Milestones 2020
- Make our customers’ energy supply more sustainable
During 2020, long-term contracts for a total of 4TWh were signed. In total, under the Greentegra strategy, 10.5 TWh per year were signed in renewable energy contracts, providing our customers with innovative and competitive solutions to meet their energy needs, contributing to their sustainability goals.
- Reduce the carbon intensity of our portfolio
Decarbonization
The Company continued to make progress in its decarbonization process by anticipating the withdrawal of 322 MW from its Ventanas complex. This is how AES Gener not only complies with the voluntary decarbonization agreement entered into in June 2019 with the Chilean Government, but also brings forward the withdrawal of Ventanas 1 by almost two years and Ventanas 2 by three years.
AES Gener entered into an agreement for the sale of its ownership in Guacolda Energía SpA to WEG Group, current partner of the Company. With this transaction, subject to the approval of the Fiscalía Nacional Económica (National Economic Prosecutor’s Office), AES Andes will divest the ownership of 764 MW in Huasco, which represents 26% of the coal-fired operating installed capacity of the Company.
Renewable growth
The Alto Maipo project is 96% complete and less than 90 meters remain to complete the excavation of all the tunnels. Commercial operation of the two 531 MW generation plants is expected to begin in the second half of this year.
Construction continues on Andes Solar IIb, a project that will have the largest lithium battery storage system in Latin America (112 MW for 5 hours). The expansion will have a capacity of 180 MW, of which 10 MW will be installed with the 5B’s revolutionary Maverick technology.
As for wind energy development, Los Olmos and Mesamávida wind plants –for a total of 178 MW– are still under construction and have reached a progress rate of 60% and 31%, respectively.
In Colombia, the construction of the country’s largest self-generation solar plant, San Fernando, of 59 MW for Ecopetrol, is also progressing.
The Virtual Reservoir project, inaugurated in 2020, received the Avonni Innovation Award in the Electrical Companies category for the installation of an energy storage battery system integrated into hydroelectric run-of-the-river power plants.
- Strengthening our investment grade
The agreement entered into for the early termination of contracts with subsidiaries of BHP, plus the incorporation of Toesca into the ownership of Cochrane, secured US$300 million to finance the growth in renewables.
On February 5 of this year, the Company successfully closed the capital increase process for US$306 million. In a clear demonstration of confidence in the Greentegra strategy, AES Corporation endorsed the transaction by increasing its ownership interest in the Company.
Given the solid financial strategy that AES Gener is implementing to finance its transformation, by 2024, the Company will have strengthened its investment grade rating by achieving sustained leverage of less than 3.5 times the net debt-to-EBITDA ratio.