(AES, 6.Jul.2021) — The AES Corporation (NYSE: AES) signed an agreement with the Government of Chile, represented by Chile’s President Sebastián Piñera, together with Minister of Mines and Energy Juan Carlos Jobet and Minister of the Environment Carolina Schmidt, allowing for the closure of 1,097 MW of coal generation as soon as 2025. Signed at the Moneda Palace in Santiago, this agreement represents the single largest coal retirement announcement by any power company in Chile to date and includes roughly 20% of the country’s installed coal capacity. Under the terms of the voluntary retirement plan, AES will retire the units as soon as January 2025, subject to the requirements of the power grid.
“The retirement of these conventional assets will remove approximately 6 million tons of CO2 from the atmosphere, the equivalent of taking over 2.4 million cars off the streets of Chile,” said Andrés Gluski, AES President and CEO. “Our purpose is to accelerate the future of energy, and AES Andes is a great example of how we have committed to responsibly decarbonize the Chilean electricity sector, working constructively with the authorities and our customers.”
This announcement represents another important step forward in AES’ strategic decarbonization plan, which includes both the sale and retirement of coal assets along with rapid expansion in the deployment of renewables. This agreement complements AES’ plan to invest $3 billion to build 2.3 GW of renewables and energy storage through 2024 in Chile and Colombia.
Globally, AES has announced the sale or retirement of almost 12 GW of coal capacity. Earlier this year, AES announced a target to reduce its generation from coal to below 10% on a pro-forma basis1 by year-end 2025 and set a new goal to reach net-zero emissions from electricity sales by 2040. Today’s announcement is consistent with the company’s long-term plan and will have no impact on its 2021 guidance or expectations through 2025. Accordingly, the company is reaffirming its 7% to 9% average annual growth rate target through 2025, from a base year of 2020.
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