Solar takes at least 6% of Chile’s largest power auction with record low tariffs

In an auction without subsidies, solar developers have won 720 GWh of capacity in Chile’s largest-ever power auction. Endesa won about 47% of the tender with an offer not tied to specific projects, while Accion Energia said it will build 183 MW wind facility at La Arauncía. Although wind power dominated the auction, taking 5.8GWh of 12.4 GWh of power on offer from the Chile National Energy Commission (CNE), solar won 6% of the renewable energy on tender. All together renewable sources took more than half of the capacity. The median price at auction was US$47.6/MWh and US$29.1/MWh for solar at the Maria Elena plant. According to Carlos Finat, Executive Director of the Chilean Renewable Energy Association (ACERA), this was “unthinkable” 2-years ago and confirms that non-conventional renewable energy (NCRE) companies are now fixtures in the market.  Even more impressive is the fact that companies were competing under an auction where price was the deciding factor, with no subsidies. Energy Minister Maximo Pacheco said the auction was “a victory for Chile” – adding that the government has worked openly with the public to create sustainable policies. The winners of the auction must provide energy to consumers connected to the SIC and SING grids in North and Central regions for a period of 20 years, from 2021. Should the companies meet this requirements, Chile can now meet its 2025 renewables target of 20% at least 5 years early.

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