Brazilian energy group MPX Energia SA is hoping to provide Chile’s generating sector with a major boost through the development of a new coal-fired power plant.

The company’s Chilean subsidiary has filed the Environmental Impact Study for a new plant with a generating capacity of up to 2100 MW – equivalent to 20 per cent of Chile’s current installed capacity. If approved, the plant would improve the reliability of power supplies in Chile’s power system, which is heavily dependent on hydropower and which has in recent years been increasing imports of diesel oil.

MPX is aiming to develop a pulverised coal power plant using 350 MW modules up to a total capacity of 2100 MW. It will be located in the Atacama region, which is Chile’s copper mining heartland and which will facilitate a reliable and efficient supply of imported coal.

If approved, the plant will start operating in 2011, with more units coming on-line in subsequent years. It will be connected to Chile’s central SIC grid and will cost up to $4.4 billion to develop.

Chile’s increasing dependence on imports of diesel oil has exposed it to volatile international fuel prices and helped to push up inflation. The new plant will import coal from Colombia, Australia, Indonesia and Southern Chile.

The plant will sell its output on Chile’s electricity market through contracts.