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In Chile, Solar Power Outgrows the Grid, So They’re Giving it Away

In a cautionary tale illustrating the complex challenges of integrating renewable energy into the electrical grid, spot electricity prices in Chile have dropped to zero in some places on 113 days so far this year. Solar production in the country has expanded rapidly in recent years, but a lack of transmission lines is leaving the energy stranded where it’s not needed, forcing prices down.

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Bloomberg reports that one basic problem is the division of the country into separate central and northern grids, which are currently not interconnected at all. The highest concentration of solar installations was built in the north, where the country’s copper mines were expected to drive energy demand, but are now facing a slowdown.

The Chilean government is working to connect the two regions so the excess energy can move, as well as to improve connections within grid zones. But in the meantime, Bloomberg says solar investors are losing money, and the chaos could cast a pall on funding for future projects.

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Chile is Latin America’s biggest producer of renewable energy, with solar capacity quadrupling since 2013 to 770 megawatts. New projects funded before the current slump will continue to drive up capacity over the next year, and number of days of ‘free electricity’ this year—for those who happen to be in the right place— is on track to beat last years’ total of 192 days by a wide margin.

But between overcapacity and the mining slump, those projects could be the last for some time.