Consultant: Renewable energy prices to stabilize

- Thursday, November 15, 2007

Consultant: Renewable energy prices to stabilize

The average price for power generated from non-conventional renewable energy projects will stabilize, roughly mirroring the price for coal-generated power, according to María Isabel González, CEO of energy consultancy Energética Consulting.

Most forms of non-conventional renewable energy can compete with conventional forms of power, González said at a renewable energy investment conference in Santiago. Chile needs an average of 400MW in new capacity each year to meet demand growth.

Calculating investment and fuel costs, González put the average long-term price for power generated by diesel-fueled thermo plants at US$0.30/kWh.

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Coal generation costs US$0.05-0.07/kWh. Power in Chile generated with Argentine gas costs US$0.05/KWh and hydro is US$0.03/KWh.

"The long-term price for power should stabilize around coal-based generation at US$0.07/kWh," González said.

Most non-conventional renewable energy can be competitive at this price level.

Mini-hydro plants can generate power at a long-term average price of US$0.03-0.10/kWh. Wind and biomass power can be generated from US$0.06-0.20/kWh and geothermal costs an average of US$0.04-0.05/kWh.

Only solar is too costly to remain competitive with conventional forms of power at US$0.20-0.40/KWh, although it could be competitive with diesel generation, according to González.