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.