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Wind energy dominated Chile's largest-ever tender for the supply of electricity to distributors, a process that concluded Wednesday at a ceremony in capital Santiago.
Bids from generators seeking to obtain 20-year PPAs starting in 2021 averaged US$47.6/MWh, down 63% from an auction in 2013, when prices reached US$130/MWh amid scarce competition.
A total of 84 firms submitted bids this time for the supply of 85,000GWh/y, nearly seven times the 12,340GWh/y placed on offer by national energy commission CNE.
Winners included Ireland's Mainstream Renewable Power, which will supply 3,366GWh/y through the construction of seven wind farms totaling 986MW and requiring US$1.65bn of investment; German renewables firm WPD, whose Chile portfolio includes the Malleco, Negrete and Santa Fe wind farms; Spain's Acciona, which will meet its 506GWh/y commitment through construction of the 183MW San Gabriel wind farm in central-southern Araucanía region; fellow Spanish firm Ibereólica, which is developing the multiphase Cabo Leones wind project in northern Atacama region; and Endesa Chile, the country's largest power generator with over 6.3GW of installed hydropower, thermal and wind capacity in operation.
Bids submitted by Mainstream averaged US$40.7/MWh.
"You can see from today that [Chilean authorities] run a very transparent system," Mainstream's general manager for Chile, Bart Doyle, told BNamericas at the event.
Doyle cited reforms to Chile's power auction process - namely a five-year grace period between the awarding of PPAs and their entrance into effect - as crucial to allowing Mainstream to bid successfully.
"It's very unusual to have four to five years to build a project out," Doyle said, "which we do in this case."
A previous tender in late 2015, through which Mainstream won contracts to supply 768Wh/y through its Aela Energía joint venture with private equity firm Actis, only allowed 14 months for the 170MW Sarco and 129MW Aurora wind projects to come online.
Winners in the latest auction also included SolarPack, which submitted a bid of US$29.1/MWh for its Granja Solar PV solar project, and Gas Natural Fenosa subsidiary GPC, which will supply 850GWh/y through the Inca de Varas I and Inca de Varas II PV solar plants and the Cabo Leones II wind farm. The latter project is a joint-venture with Ibereólica.
Chile-based Besalco Energías Renovables also obtained a supply contract.
"We're convinced that this auction marks a before and after in our system," said CNE head Andrés Romero, who presided over the event along with energy minister Máximo Pacheco.
This story was updated on August 19 to provide additional details about Gas Natural Fenosa's projects.