Chile power auction "best news in 10 years"

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Friday, December 12, 2014

Chile's power distributors awarded 85% of the blocks made available in their latest power supply call, transmission and distribution association Empresas Eléctricas said.

The auction, Chile's first to include blocks designed for non-conventional renewable energy (NCRE) producers, made available 13,000GWh/y and fetched average prices of around US$107/MWh, a 20% reduction from an auction that took place around the same time last year.

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The government has made it a goal to reduce average auction prices to US$100/MWh in 2018 from US$130/MWh in 2012-13 in order to cut consumer electricity prices.

"This is the best news that Chile's electric sector has had in the last 10 years," Empresas Eléctricas head Rodrigo Castillo was quoted as saying. "Many people said it was impossible today for Chile to aspire to prices below US$110/MWh."

Castillo highlighted that the two largest blocks, which totaled 5,040GWh/y and 3,800GWh/y respectively, were awarded to E-CL and Central El Campesino - two actors new to central grid SIC. E-CL is the main generator on the northern SING grid and El Campesino owns a combined cycle project planned for the SIC.

The blocks awarded to E-CL and El Campesino were priced at US$109.48/MWh and US$110.99/MWh, respectively.

NCRE companies comprised the rest of the bidders, who were awarded blocks ranging from 5GWh/y to 300GWh/y.

Other companies awarded blocks were: Empresa Eléctrica Carén, Empresa Eléctrica ERNC-1, Chungungo, Empresa Eléctrica ERNC-1, Energía Cerro El Morado, SPV P4, San Juan, Pelumpén, Santiago Solar, Acciona Energía Chile and Norvind.