Chile’s power auction to support 2GW of renewables and storage projects

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A solar project from Sonnedix, which was awarded 39% of the total energy supply in the auction. Image: Sonnedix.

Sonnedix, Opdenergy and Canadian Solar were among the five successful bidders in Chile’s latest power auction, which took place yesterday (7 September) and will see the country support 2GW of renewables and storage installations.

Auctioning 2,310GWh per year to supply energy needs for a period of 15 years from 2026, the tender closed with average prices of US$23.78/MWh, 27% lower than the country’s auction in 2017.

With 29 companies submitting bids, the tender was eight times oversubscribed, according to Chile’s National Energy Commission (CNE), with the lowest bid coming in at US$13.32/MWh.

Results from the tender are expected to result in an investment of nearly US$2 billion in new infrastructure in Chile, said CNE executive secretary José Venegas.

Independent power producer (IPP) Sonnedix revealed it was awarded 39% of the total supply, representing 903GWh/year, that will allow it to build around 424MW solar PV projects and invest US$300 million. The company has previously expanded its position in Chile’s solar sector through a host of project acquisitions.

Another IPP, Spain’s Opdenergy, was awarded 819GWh/year, representing 35% of the total auction capacity. The company said it will generate the awarded energy with a portfolio of solar and wind projects of more than 600MW.

Canadian Solar posted the US$13.32/MWh price, according to local publication La Tercera, with this representing an all-time low bid for Chile’s power auctions.

Racó Energía was also successful in the tender, while Portuguese utility EDP said it was awarded a power purchase agreement to sell energy from a 120MW wind project that is expected to be operational by 2025.

CNE said projects supported by the tender will help lower household bills. “We are satisfied with this result because it allows us to guarantee a safe electricity supply at competitive prices for our customers in the future,” said Rodrigo Castillo, executive director of the Association of Electric Companies, which is Chile’s transmission and distribution trade body.

“The most important thing will be that these good results are reflected, as soon as possible, in the bills of Chilean households.”

Thanks to its renewables policies and commitment to phasing out coal, Chile was the highest-scoring market in BloombergNEF’s most recent Climatescope report, the research organisation’s annual survey of the energy transition in developing countries. The country has already met its 2025 clean energy mandate target of 20% of generation for utilities and is aiming for 60% of its power generation to come from clean sources by 2035.

Recent developments in Chile’s solar sector have seen developer Mainstream Renewable Power unveil plans for a 1GW renewables platform, while French utility Engie is aiming to develop 2GW of renewables in the country by 2025 as part of efforts of a transition away from coal generation.

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