Chile's Atacama Desert is evolving into a global hub for battery production.

      TL;DR: ContourGlobal has launched a $500 million solar and storage facility in Chile's Atacama desert, which provides 200 megawatts of power for up to 6.5 hours during the night. Currently, Chile has 3,072 MW of battery storage operational and anticipates an additional 5,400 MW by December 2026.

      ContourGlobal, an independent power producer supported by KKR, has inaugurated a nearly $500 million solar-and-storage plant in the Atacama desert of Chile, which harnesses solar energy during the day for use at night. The Victor Jara hybrid facility combines 231 megawatt-peak of photovoltaic capacity with 1.3 gigawatt-hours of battery storage, offering 200 megawatts of power for as long as 6.5 hours after sundown. ContourGlobal describes it as the longest-duration utility-scale battery system in Latin America.

      Located in the Tarapacá region, the project is supported by a 15-year power purchase agreement for nighttime electricity with Copec EMOAC, the renewable energy arm of Empresas Copec, one of Chile's largest industrial groups. This is ContourGlobal's second solar-and-storage investment in Chile, following a similar system launched last year in Quillagua in the Antofagasta region. Together, these two projects provide 452 megawatt-peak of solar power and 2.5 gigawatt-hours of battery storage.

      Why the Atacama Desert?

      The Atacama desert is known for its high levels of solar irradiance, ranking it among the best locations worldwide for photovoltaic energy generation. However, the issue arises as the daytime solar output exceeds what Chile’s grid can handle, leading to frequent curtailments and wasted energy from solar plants that must be shut down due to lack of demand. Additionally, transmission limitations between the solar-rich north and the demand-heavy southern regions exacerbate this issue.

      Battery storage mitigates this problem by storing excess solar energy generated during the day and releasing it at night, effectively converting an intermittent energy source into a reliable one. Solar-plus-storage initiatives are increasingly designed to meet continuous energy demands, particularly from data centres that require a stable and predictable power supply.

      James Lee Stancampiano, ContourGlobal’s general manager for South America, highlighted Chile’s advantages, such as its regulatory framework, rising electricity demand, and a pipeline of renewable energy and storage projects. The company is exploring more projects in Chile, including potential sites near the capital Santiago and wind projects in the central and southern regions.

      Numbers behind the storage boom

      Chile currently boasts 3,072 megawatts of battery energy storage capacity, either operational or in testing phases, with most projects located in the Atacama desert, according to the Coordinador Eléctrico Nacional (CEN), the national grid operator. CEN anticipates an additional 5,400 megawatts of storage capacity to come online by December 2026. Currently, battery energy storage systems constitute nearly 42% of Chile's energy project pipeline by capacity, the largest segment.

      This investment landscape is diversified, with multiple players involved. Companies such as AES Andes, Engie Energía Chile, and Enel Green Power Chile are all pursuing storage projects in the country. Atlas Renewable Energy, supported by BlackRock’s Global Infrastructure Partners, obtained $510 million in financing last year for its Estepa project, one of the largest solar-plus-storage developments in Chile. Additionally, the Spanish firm Grenergy is constructing the Oasis de Atacama complex, which it claims will be the world's largest solar-plus-storage project.

      Industrial demand as a key driver

      What sets Chile apart from other solar-rich markets is its industrial demand profile. The mining sector, responsible for about a quarter of the world's copper and a large proportion of its lithium, is one of the most energy-intensive industries globally. Mines require reliable power around the clock, and there is increasing pressure from customers, regulators, and investors to decarbonize operations.

      ContourGlobal’s CEO, Antonio Cammisecra, stated that the presence of a significant industrial base, especially in mining, has increased the demand for consistent long-term renewable energy. He emphasized that storage technology transitions renewables from intermittent sources to programmable energy solutions, which is crucial for reducing system costs, promoting decarbonization, and scaling up conventional generation replacements.

      Data centres are emerging as another major source of demand. The global trend toward electrification across various sectors, including industrial processes and AI computing, is creating new markets for 24/7 renewable energy. ContourGlobal foresees growing demand from data centres that require substantial amounts of constant electricity; Chile’s mix of inexpensive solar, storage infrastructure, and political stability makes it an attractive location for such facilities that might otherwise be established in the US or northern Europe.

      A scalable global model

      Chile's strategy of developing large-scale solar capacity in the desert, combining it