Lowest Bid of $0.01332/kWh Reported in Chile’s Renewables Auction

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The National Energy Commission of Chile (CNE) held a 2.31 TWh/year renewable energy auction last week, in which the lowest bid was submitted for $0.01332/kWh for a solar PV project.

29 bidders took part in the bidding process, which was conducted by Empresas Eléctricas AG and by Enel, to provide electricity to the National Electric System from 2026 to 2041. The lowest bid was offered by Canadian Solar Libertador Solar Holding for a solar project, reported local daily La Tercera.

Several bids were submitted in the $0.021/kWh and $0.028/kWh range, and a bid of $0.0399/kWh for a concentrated solar power (CSP) project was also submitted, which is the lowest one for an energy auction at a global level till date. The bid relates to the 390 MW Likana Concentrated Solar Power (CSP) project, under development by EIG Global Energy Partners.

Early 2020, Chile was one of the first countries to officially submit an updated Paris Agreement target to the UNFCCC. The updated Nationally Determined Contribution (2020 NDC) involves greenhouse gas (GHG) emissions peaking by 2025 at the latest, and then a decrease to emit no more than 95 million tonnes of greenhouse gases by 2030. These medium-term emission pledges were made in the context of a long-term vision and goal of GHG neutrality by 2050.Within the new bidding law framework, CNE is responsible for designing, coordinating, and directing the public bidding process for this year. The objective of the bidding process is to help electricity distribution companies to have contracts for the long-term supply of electricity to their customers subject to price regulations.

The bidding terms consider reducing risks to encourage the participation of different energy suppliers, achieve competitive prices that benefit regulated customers and give more access to different types of energy, including storage.

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Companies which participated through bids included Acciona Energía Chile Holdings, Enel Generación Chile, Canadian Solar Libertador Solar Holding, Renovalia Chile Dos, Pacific Hydro Chile, etc.

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The supply tender consists of three units of hourly blocks N ° 1-A, N ° 1-B, and N ° 1-C, totaling 2,310 GWh, all for the electricity supply starting in 2026 and for 15 years.

According to energy commission CNE, Chile added 2.5 GW of new renewable capacity in the first half of 2021, compared to 1.5 GW in the entirety of 2020. Currently, 28% of Chile’s total power capacity. can be attributed to renewables.

The country’s main challenges in achieving its climate goals include transporting renewable electricity from where it is generated to where it is consumed, and to maximize the value of abundant cheap and clean electricity. Innovative technology-neutral auction design is playing an important role in accelerating the deployment of solar photovoltaic and onshore wind in Chile. The country is now advancing domestic electrical grid interconnections and green hydrogen as main solutions to accompany the growth of variable renewable energy electricity.