Chile’s auction concludes with average price of $32.5/MWh

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Chile's Energy Ministry has confirmed that the lowest bid in its 2017 power auction was $21.48/MWh, with an average price of $32.5 MWh. As previously reported by Reuters, Enel submitted the lowest bid of $21.48 MWh for one of the blocks in dispute. The second-lowest bid was from GPG Solar Chile, a unit of Spanish power and gas utility Gas Natural Fenosa, which offered $24.80/MWh for the same block.

Although 2,200 GWh of capacity was contracted in the auction, the submitted bids reached a volume that was nine times higher, for a total of 20,700 GWh. “100% of the energy we allocate today is renewable, clean energy, which is equivalent to approximately 600 MW of installed capacity in new renewable projects, through which we hope to attract close to $1 billion dollars in investment in new infrastructure for the country,” said Andrés Romero, executive secretary of the National Energy Commission (CNE).

The average price in the 2016 auction was $47.6/MWh, with 12,430 GWh contracted per year. In the 2015 tender, which was the first of its kind in Chile, the average price was $79.3/MWh, with 1,200 GWh contracted per year.

“The goal set by President Bachelet was to lower energy prices by 25%. Today we can say with great calm, transparency and joy, we have managed to lower the price of energy by 75% in the last three years,” said Minister of Energy Andrés Rebolledo.

Under the last two auctions, time blocks were allocated to allow for more solar plants. Projects that were selected in the auction will start delivering power on January 1, 2024, with power to be supplied until December 31, 2043. The power will be sold to customers of the Central and Northern Large Interconnected Systems (SIC and SING).

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