Codelco, Chile's state copper miner, did not sign a new power contract with ENGIE in May 2024. It rewrote an old one. A supply deal first agreed in 2007 to deliver coal-fired electricity now delivers renewable power instead. The volume is large. The term is not.
Key takeaways
- ENGIE and Codelco announced on 6 May 2024 an amendment to a 2007 power purchase agreement that switches the electricity supplied to Codelco in Chile from coal to renewable sources.
- The amended contract, signed through ENGIE Chile subsidiary Central Termoelectrica Andina, provides 1,000 GWh of renewable electricity a year to Codelco until 2032.
- The renewable power will supply Codelco's Gabriel Mistral Division and part of its Chuquicamata mine.
- Leap records the amended ENGIE contract with a duration of 7 years, the shortest of the 9 Chilean power purchase agreements it logs for 2024; the other 8 all run for 15 years.
- The change supports Codelco's plan to run on 100 percent green electricity before its committed 2030 deadline; no tariff or generating capacity was disclosed.
Why amend a 2007 contract rather than sign a new one?
Because the commercial relationship already existed and only the source of the electrons needed to change. A power purchase agreement, or PPA, is a long-term contract under which a generator sells electricity to a buyer at agreed terms. ENGIE and Codelco already had one, signed in 2007, through ENGIE's subsidiary Central Termoelectrica Andina.
The original contract was supplied from coal. The amendment keeps the counterparties but changes what stands behind the supply. Codelco gets renewable electricity without contracting a new supplier for this volume. ENGIE keeps a large industrial customer and repositions a coal-era contract into one that fits the buyer's climate commitments.
For Codelco, the logic is about deadlines. The company has committed to 100 percent green electricity by 2030 and aims to get there sooner. Converting existing supply is faster than contracting new projects that still have to be built.
What does 1 TWh a year mean for Codelco's operations?
It is enough to cover named, specific sites rather than a share of the group's demand. The renewable supply goes to the Gabriel Mistral Division and to part of the Chuquicamata mine.
A terawatt hour is a thousand gigawatt hours, and it measures energy delivered over time rather than the size of a power plant. Neither ENGIE nor Codelco disclosed how many megawatts of wind or solar capacity sit behind the contract. Leap records the sector as multiple technologies, which suggests a blend rather than a single plant, but the generating assets are not named.
The price is also undisclosed. That is the norm rather than the exception in Chile. None of the nine Chilean PPAs Leap logs for 2024 carries a published tariff.
Why is a seven-year term unusual in Chile?
Because almost every other renewable contract signed in Chile in 2024 runs for twice as long. The ENGIE amendment runs to 2032, and Leap records its duration as seven years. Long tenors matter to generators because lenders size project debt against contracted revenue. A 15-year contract can support a new build in a way that a seven-year contract usually cannot.
The short tenor fits the nature of this deal. It is not financing a new plant. It is re-papering supply from an existing portfolio for the remaining years of an old relationship. That leaves Codelco free to re-contract the volume, or move it to another supplier, in the early 2030s.
Enerdatics records 9 power purchase agreements signed in Chile in 2024. Eight of them run for 15 years. The ENGIE amendment, at 7 years, is the only exception. Codelco is the offtaker on 4 of the 9, more than any other buyer, and its three other 2024 contracts, with Colbun, Atlas Renewable Energy and Innergex, were all announced on 1 March 2024 and all run for 15 years. The Colbun contract covers about 1,100 GWh a year, similar in size to ENGIE's 1,000 GWh.
What does the deal signal for Chile's corporate PPA market?
The first signal is that mining dominates demand. Of Leap's nine 2024 Chilean contracts, six went to industrial buyers. Besides Codelco, Antofagasta Minerals signed with Colbun for 912 GWh a year and Grupo CAP signed with Atlas Renewable Energy.
The second signal is a two-track buying strategy. Codelco used long 15-year contracts in March 2024 to bring in new supply, then converted an existing coal contract two months later for a shorter period. That gives the miner a mix of locked-in long-term supply and flexible volume that comes up for renewal before the middle of the next decade. The Innergex contract Codelco signed in March shows the other side of that strategy.
The third signal is about older contracts more broadly. The 2007 original here was a coal supply deal. Amending it rather than tearing it up gave both sides continuity: the same counterparties and a cleaner source. Whether other generators and miners follow the same route depends on how many coal-era agreements still have years left to run.
Frequently asked questions
Who supplies the renewable power to Codelco under the amended contract? ENGIE supplies it through Central Termoelectrica Andina, a subsidiary of ENGIE Chile, which was also the counterparty to the original 2007 agreement.
Which Codelco sites receive the renewable electricity? The 1,000 GWh a year goes to Codelco's Gabriel Mistral Division and to part of the Chuquicamata mine.
How long does the amended ENGIE and Codelco contract last? It runs until 2032. Leap records the duration as seven years, against 15 years for every other Chilean PPA it logs for 2024.
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