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Update on Raki / Huajache Wind Power Project, Chile
Rame Energy plc, the Independent Power Producer, has provided the following operational update regarding its 15MW Raki / Huajache wind project in Chile, in which it holds a 20% equity interest alongside Santander Investment Chile Limitada. Raki / Huajache are two of the Company’s first six wind projects in Chile totalling 133 MW that are at various stages of development.
The Company is pleased to report that significant potential savings in capital expenditure and reductions in transmission costs have been identified following recent clarifications of energy legislation in Chile. The Directors estimate that this could improve the internal rate of return of the Project by approximately 1.5%. As a result, Rame’s IRR for the Project could increase to 17.5%.
Potential savings have been identified as follows:
ยท The cost of the new transformer bay at the substation that will connect Raki/Huajache to the grid will now be spread between all generators, and not borne by the Project alone because the transformer is now classed as part of the overall system and not ‘additional equipment’. In addition, savings in operational expenditure of approximately USD 2million over the life of the project will also be achieved.
Whilst to date the Project has been progressing on schedule, a landslide is currently restricting the delivery of components to the Project site by turbine supplier Vestas. Consequently Vestas has elected to delay the delivery until the preferred route is cleared by the authorities as the alternative route would have incurred additional transportation costs. Clearing the preferred route could take 3 to 4 weeks and Vestas is aware that it could be held liable for liquidated damages due to the delay. Whilst turbine erection will be slightly delayed as a result, it is possible that some time will be recovered during commissioning, particularly as this process will now not experience interruption due to the festive season holidays.
Tim Adams, CEO, commented,
“We pride ourselves on completing projects on time and on budget and it is frustrating that, due to factors entirely beyond our control, there will now inevitably be a short delay in the commissioning of the turbines. That said, we do not consider the delay to be of particular material significance to the overall project timetable which is positive.
“In addition, the savings we anticipate have the strong potential to significantly enhance the Project’s IRR. This will be welcome news for all our stakeholders and I look forward to providing a positive update regarding all our operational activities in the near term and of course on the commissioning of this project early in the New Year.”
