Mainstream uses force majeure to terminate PPA for Chilean wind project

The Irish company won the contract to supply electricity to distributors in a 2016 tender and to begin providing power in 2021.

But the discovery of extensive archaeological remains at the project site in northern Chile’s Antofagasta region has delayed construction.

Chile’s National Monuments Commission ordered the company to halt construction in December 2021. Mainstream said it had used force majeure clauses in its contract because the delay lasted for more than 12 months.

According to Coordinador Electrico, Chile’s grid operator, the wind farm is now not expected to enter commercial operations until 2027, back from 2024. A spokesman for Mainstream declined to comment on the delays.

Latest setback

The annulment is the latest setback to face Mainstream, which is one of Chile’s biggest investors in renewable technology.

In May, the company withdrew from its subsidiary Copihue citing delays developing its Caman wind project in southern Chile. Meanwhile, Mainstream’s parent company, Aker Horizons, announced a €377 million write-down of its Chilean business, citing the financial difficulties facing the sector.

Marco Antonio Mancilla, executive secretary of Chile’s National Energy Commission, said it had only terminated the contract after analysing the circumstances facing the Chkuri project in depth.

He added: “This termination does not compromise the security of supply to regulated customers, as there is sufficient contracting leeway in the system to meet the required supply.”