Chile to contract 2 GWh of power in upcoming electricity auction

Chile’s upcoming power auction will be held in December and not, as previously announced, in October, and through it the Chilean government intends to contract 2 GWh of power. These are the most important aspects of the auction that were highlighted in a meeting held on Monday at the Chilean Embassy in Berlin, Germany.

At the meeting, the head of the National Commission for Energy of Chile (CNE) Andrés Rodrigo presented the 2017 auction together with the managing director of the Chilean Energy Federation, Rodrigo Castillo, and Rainer Schröer of the German development agency Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

The auction Licitación de Suministro 2017/01, as the auction held last year, will include time of day-specific supply blocks for solar power projects. Power plants selected in the auction must begin delivering power to the local electricity suppliers in January 2024. Projects that encounter problems with environmental permits, however, could be granted a two-year delay.

Rodrigo Castillo explained to pv magazine that it is not important that the bids for solar projects will be lower than last year’s lowest bid, which was $29/MWh, but that these will be lower than the average price registered for solar projects in the 2016 auction, which were around $40/MWh.

As in the previous auctions, the maximum price for the auction will remain hidden. According to Castillo, however, bids usually do not exceed the ceiling price set by the CNE.

Andrés Romero, on the other hand, provided more details on the auctions for the period 2018-2020. In 2018, the Chilean government hopes to contract 1.6 GWh of power generation . Projects selected in this auction must also come online in January 2024. Through the auctions planned for 2019 and 2020, the CNE expects to release contracts for 8.8 GWh and 4.1 GWh respectively.

All projects selected in the upcoming auctions will be granted a 20-year PPA.

Romero also stressed that the auction prices have dropped considerably over the past few years from $131.4/MWh in 2012 to $79.3/MWh in 2015, and again to $47.6/MWh in 2016.

In the 2016 electrical supply tender, renewable energy projects were awarded more than half of the quota. The average price in the contest of $47.6 per MWh was the lowest in an auction of this type in Chile. Several PV projects were winners, including a Solarpack project, which put forth a price of $29.1 per MWh.