AES Announces More Than 1 GW of Coal Retirements in Chile

Rhea-AI Summary

The AES Corporation (NYSE: AES) signed an historic agreement with Chile's government to retire 1,097 MW of coal generation by 2025, representing about 20% of the nation's coal capacity. This initiative supports AES' strategic decarbonization plan, aiming to eliminate approximately 6 million tons of CO₂ emissions. The company is investing $3 billion in renewable energy projects in Chile and Colombia, targeting net-zero emissions by 2040. The announcement is aligned with AES' goal to reduce coal generation to less than 10% by 2025, with no impact on its 2021 guidance or growth forecasts.

Positive

• Retirement of 1,097 MW of coal generation by 2025, about 20% of Chile's coal capacity.
• Elimination of approximately 6 million tons of CO₂ emissions.
• Investment of $3 billion in renewable energy and energy storage projects through 2024.
• Commitment to achieve net-zero emissions from electricity sales by 2040.
• Reaffirmed average annual growth rate target of 7% to 9% through 2025.

Negative

• None.

ARLINGTON, Va., July 6, 2021 /PRNewswire/ -- The AES Corporation (NYSE: AES) today signed an agreement with the Government of Chile, represented by Chile's President Sebastián Piñera, together with Minister of Mines and Energy Juan Carlos Jobet and Minister of the Environment Carolina Schmidt, allowing for the closure of 1,097 MW of coal generation as soon as 2025. Signed at the Moneda Palace in Santiago, this agreement represents the single largest coal retirement announcement by any power company in Chile to date and includes roughly 20% of the country's installed coal capacity. 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.

This is a step forward in AES' strategic decarbonization plan, which is coupled with the rapid deployment of renewables.

"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 Andrés Gluski, AES President and CEO. "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."  

This announcement represents another important step forward in AES' strategic decarbonization plan, which includes both the sale and retirement of coal assets along with rapid expansion in the deployment of renewables. This agreement complements AES' plan to invest $3 billion to build 2.3 GW of renewables and energy storage through 2024 in Chile and Colombia. 

Globally, AES has announced the sale or retirement of almost 12 GW of coal capacity.  Earlier this year, AES announced a target to reduce its generation from coal to below 10% on a pro-forma basis¹ by year-end 2025 and set a new goal to reach net-zero emissions from electricity sales by 2040. Today's announcement is consistent with the company's long-term plan and will have no impact on its 2021 guidance or expectations through 2025. Accordingly, the company is reaffirming its 7% to 9% average annual growth rate target through 2025, from a base year of 2020.

About AES 

The AES Corporation (NYSE: AES) is a Fortune 500 global energy company accelerating the future of energy. Together with our many stakeholders, we're improving lives by delivering the greener, smarter energy solutions the world needs. Our diverse workforce is committed to continuous innovation and operational excellence, while partnering with our customers on their strategic energy transitions and continuing to meet their energy needs today. For more information, visit www.aes.com.  

Safe Harbor Disclosure

This news release contains forward-looking statements within the meaning of the Securities Act of 1933 and of the Securities Exchange Act of 1934. Such forward-looking statements include, but are not limited to, those related to future earnings, growth and financial and operating performance. Forward-looking statements are not intended to be a guarantee of future results, but instead constitute AES' current expectations based on reasonable assumptions. Forecasted financial information is based on certain material assumptions. These assumptions include, but are not limited to, our expectations regarding the COVID-19 pandemic, accurate projections of future interest rates, commodity price and foreign currency pricing, continued normal levels of operating performance and electricity volume at our distribution companies and operational performance at our generation businesses consistent with historical levels, as well as the execution of PPAs, conversion of our backlog and growth investments at normalized investment levels and rates of return consistent with prior experience.

Actual results could differ materially from those projected in our forward-looking statements due to risks, uncertainties and other factors. Important factors that could affect actual results are discussed in AES' filings with the Securities and Exchange Commission (the "SEC"), including, but not limited to, the risks discussed under Item 1A: "Risk Factors" and Item 7: "Management's Discussion & Analysis" in AES' 2020 Annual Report on Form 10-K and in subsequent reports filed with the SEC. Readers are encouraged to read AES' filings to learn more about the risk factors associated with AES' business. AES undertakes no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise.

Any Stockholder who desires a copy of the Company's 2020 Annual Report on Form 10-K filed February 25, 2021 with the SEC may obtain a copy (excluding Exhibits) without charge by addressing a request to the Office of the Corporate Secretary, The AES Corporation, 4300 Wilson Boulevard, Arlington, Virginia 22203. Exhibits also may be requested, but a charge equal to the reproduction cost thereof will be made. A copy of the Form 10-K may be obtained by visiting the Company's website at www.aes.com.

¹ Based on annual generation in MWh from the portfolio as of, or expected by, the relevant date, adjusted for: (i) (+) generation from new assets added to the portfolio; and (ii) (-) actual generation from announced asset sales or retirements.

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SOURCE The AES Corporation

FAQ

What is the significance of AES' coal retirement agreement in Chile?

The agreement allows AES to retire 1,097 MW of coal generation, marking the largest coal retirement announcement in Chile, and supports the country's decarbonization efforts.

When will AES retire its coal units in Chile?

AES plans to retire the coal units by January 2025, subject to power grid requirements.

How much CO2 will AES eliminate by retiring its coal plants?

The retirement is expected to eliminate approximately 6 million tons of CO2 emissions.

What are AES' renewable energy investment plans in Chile?

AES is investing $3 billion to build 2.3 GW of renewables and energy storage through 2024 in Chile and Colombia.

What is AES' target for coal generation by 2025?

AES aims to reduce its generation from coal to below 10% by year-end 2025.