Renewable generators win big in Chile supply tender

Chile's national energy commission CNE awarded 100% of the blocks on offer in a tender for the supply of electric energy to regulated market consumers.

Prices for the 20-year supply contracts awarded averaged US$79.34/MWh, transmission and distribution association Empresas Eléctricas said in a statement, down 27% from a similar auction at the end of 2014.

All of the blocks were awarded to non-conventional renewable energy generators, who bid lower than conventional giants AES Gener, Endesa Chile and Colbún.

The blocks correspond to different time periods during the day, in order to accommodate the intermittent nature of wind and solar energy, and add up to 1,200GWh/y.

Supply contracts will take effect in January 2017, and last until December 2036.

The 2014-18 energy agenda of President Michelle Bachelet mandated a 25% reduction in prices awarded in regulated market tenders compared to 2013, in order to lower end prices paid by residential consumers.

The prices awarded in the latest tender were down 40% from 2013.

Due to the results of the 2014 and 2015 tenders, Chileans will see their electricity bills reduced by 7-10% over the medium term, CNE head Andrés Romero said.

The tender was the first to be carried out under a set of power auction reforms approved by legislators last year. Under the reforms, CNE designs and administers the tenders, rather than the power distributors.

A larger tender for the supply of 13,750GWh/y is scheduled for April 2016.

The following companies were awarded contracts:

Aela Generación, consortium Abengoa Chile-Abengoa Solar Chile-Abengoa Solar, Ibereólica Cabo Leones I, SBC II and Amunche Solar.

Update: Click here for more details on the tender results.