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Chile solar auction sets new record low for solar PV

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4-amanecer-solar copyThe latest energy auction in Chile has set a new record low for solar PV, with one bid by the local subsidiary of Italian outfit, Enel, coming in at just $US21.48/MWh ($A28/MWh).

The result beats the previous record low of $US24.20 set in the United Arab Emirates earlier this year, although it could be beaten by Saudi Arabia’s first auction, should the early results of a tender that secured an offer of $US17.90/MWh be verified later this month.

Either way, the Chile government is happy with the result, which secured an average price of $US32.5/MWh for 600MW of solar and wind capacity, expected to produce around 2,200GWh. This is a 75 per cent fall since its auction program began in 2015.

The Chile government says it will mean consumer prices fall by nearly 50 per cent once all the new projects are completed and online in 2024.

“This price of energy is a milestone in the sector,” energy minister Andrés Rebelled said in a statement accompanying the results. (See here in Spanish).

In 2014 “the goal proposed by President Bachelet was to lower energy prices by 25 per cent, today we can say with great calm, transparency and joy, that we have managed to lower the price of energy by 75 per cent in the last three years.”

Andrés Romero, the executive secretary of the National Energy Commission, said households currently pay around $US90/MWh. “Now, with this tender, we expect that these new contracts will gradually go down at prices in around $US50, which will go directly benefit of households. ”

Reuters reported that the lowest bid came from Enel, a part owner of one of the biggest solar farms under construction in Australia, the 220MW Bungala solar project in South Australia.

The second-lowest bid came from GPG Solar Chile, a unit of Spanish power and gas utility Gas Natural Fenosa, which offered $US24.80/MWh for the same block.  

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  • Miles Harding

    let me get this right: Chilean households will eventually be paying $US50/MWh, or AU7.5 cents per kWh. Hmmm.

    • Steve159

      that 7.5c is at source. I would imagine transmission costs to be added. Not sure if they’ve been stupid enough to privatize their electricity grid, if not, probably close to 15c / kWh, assuming grid costs are like ours, @ 48% of overall consumer pricing.

      Giles could probably detail costs to consumers.

      • Brunel

        We should be using Instagram to show how much people pay for each kWh of electricity.

      • neroden

        Nope, the $50/MWh estimate INCLUDES transmission costs. Read carefully! $21/MWh produciton cost.

        You can do it too, Australia! (Well, you can get close; your sunlight isn’t quite as good as Chile.)

        • Steve159

          It seems you’re correct — that households will be paying $50/MWh / in Au $ about 7c/kWh at current exchange rates.

          Seems low. I wonder if the existing $90 / MWh is what the consumer sees on their bill, or is only the energy cost, sans network fees, taxes etc.

  • Joe

    A beautiful vision that of Chile’s solarfarm at the top of the article. Chile are going ahead in leaps and bounds with solar. Solar with pumped hydro ( seawater ) is another area that Chile is going ahead with. Go well Chile.

  • Robert Comerford

    Seems to be a proactive government in Chile when it comes to power generation.

  • PacoBella

    This article makes me wonder what other countries that are transitioning to a renewable energy future are doing about “energy security”. Does anybody know if they are being forced to put in battery or pumped hydro storage at anything like the levels we are being told is necessary?

  • neroden

    Admittedly Chile has *great* sunlight. But still, these low prices mean we will have low prices everywhere else soon enough…

  • etniko

    When I was a kid I travelled to the desert in the north and I thought : “oh, there’s not much to do with those thousands of kilometres of just sand, desert and sun and sun and sun day after day. Is worthless land”… who knew.