(Bloomberg) -- Engie SA is closing its coal-fired power plants in Chile after deciding there was little point in trying to sell them.
The French power company plans to replace the capacity with renewable energy and will announce more details in the coming weeks, according to Philip De Cnudde, Engie’s chief executive officer for Latin America.
The move comes amid two larger transitions: Courbevoie, France-based Engie has almost completed a plan to divest 15 billion euros ($18.6 billion) of coal, oil and natural gas assets worldwide and invest the proceeds in clean power sources, energy-efficiency services and electricity and gas networks. Meanwhile, Chile is pushing power companies to phase out coal plants as the country seeks to curb greenhouse-gas production. The combination leaves Engie little choice but to shutter -- rather than sell -- the three plants.
“Selling coal plants in the current circumstances is not good,” De Cnudde said in a telephone interview. “We can’t get a good value.”
The company internally evaluated options for selling the plants, which generate an annual total of 7.5 gigawatt-hours of electricity, but never officially put them on the block, De Cnudde said.
Instead, the company worked with Chile’s government on its transition to cleaner energy sources. The four biggest utilities in Chile, Engie, AES Gener SA, Colbun SA and Enel SpA are also cooperating with Chile on a plan to phase out all of the country’s existing coal-fired power plants by 2050, according to Bloomberg New Energy Finance.
Coal makes up 21 percent of Chile’s installed capacity. Renewable energy has tripled in the past four years and now surpasses that with 22 percent, according to Bloomberg New Energy Finance.
Replacing the coal capacity instead of selling the assets means Engie’s presence in Chile’s power market won’t be adversely affected, De Cnudde said
“If you sell something, you lose your customers, contacts,” he said. “We don’t want to lose importance in Chile. Our customers are also interested in moving to green energy.”
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