Peru awards 185 MW of solar PV at US$48/MWh

Today Peru awarded 185 MW of solar PV projects at an average price of US$48 per megawatt-hour (MWh) in a renewable energy solicitation. Enel Green Power Peru and Enersur were awarded two PV projects with a total capacity of 185 MW at a price between $47.98-48.50/MWh in Peru’s fourth renewable energy solicitation, according to a press release by Peru’s Supervisory Agency for Energy and Mines (Osinergmin).

Bloomberg New Energy Finance Head of Solar Analysis Jenny Chase says that she has never seen a contract for power from solar PV this cheap in any nation that does not offer tax breaks. However, she also notes that these plants are not expected to be built until 2017, at which time she predicts that the global price to build utility-scale PV will fall to around $1.10 per watt.

Chase also says that as the tender is in U.S. dollars, there will be no currency risk. She further notes that it is likely that these projects will receive funding at favorable interest rates from development banks, but notes that even then this price is extremely low.

“It’s tight, but not impossible,” Chase told pv magazine.

Through the auction, Enel won a contract to supply 415 gigawatt-hours (GWh) annually at a price of $47.98/MWh, which it will cover with its 144 MW Rubí PV project. Enersur was awarded a contract to supply 108 GWh annually at a price of $48.50/MWh, which it plans to meet with its 40 MW Intipampa PV project.

Three wind projects were also awarded in the auction, with prices from $36.84-$37.83/MWh, as well as biomass and hydro projects. Nearly all of the supply available was awarded at 1,700 GWh of contracts.

Enel and Enersur will supply electricity under long-term power contracts. The auction rules state that developers which won contracts must begin delivering electricity by the end of 2018.

Among the companies which participated in the process and were not awarded projects were Fotowatio Renewable Ventures, Hanwha Q Cells Peru, Neoen and Solarpack Peru.

This is the third national solicitation under which PV projects have been awarded in Peru. Previous auctions awarded five PV projects with a total capacity of 96 MW, which are in operation today.

Translation and additional reporting by Christian Roselund. For the original article in Spanish, please see the pv magazine Latinoamérica website.