coal power plant
Image by Peter H from Pixabay

Global energy company AES Corporation has signed an agreement with the government of Chile to allow for the closure of 1,097MW of coal generation as soon as 2025.

This agreement represents the single largest coal retirement announcement by any power company in Chile to date, according to AES, and includes roughly 20% of the country’s installed coal capacity.

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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 AES president AndrĂ©s Gluski.

“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.”

The announcement is aligned with AES’ strategic decarbonisation plan, which includes both the sale and retirement of coal assets along with rapid expansion in the deployment of renewables. To this end, AES plans to invest $3 billion to build 2.3GW of renewables and energy storage through 2024 in Chile and Colombia.

AES has announced a target to reduce its generation from coal to below 10% on a pro-forma basis by year-end 2025 and set a new goal to reach net-zero emissions from electricity sales by 2040.