Chile awarded a contract to sell solar power for $29.10 per megawatt hour (MWh), a record global low, in the country’s largest-power auction. “Solar power delivers cheapest unsubsidised electricity ever, anywhere, by any technology,” BNEF Chair Michael Liebreich said on Twitter
Chile accepted a bid from Spanish developer Solarpack Corp Tecnologica for 120 megawatts of solar at the price of $29.10 per megawatt-hour (2.91 cents per kilowatt-hour or kwh), reports Think Progress. This trumps the 2.99 cents/kwh bid Dubai received for 800 megawatts back in May.
Wow 🙂 Just keeps getting cheaper – The price of solar power in Chile hit a record low. https://t.co/GE67y5phDR pic.twitter.com/cBLQ4FF0Rz
— 350 Africa (@350Africa) 24 August 2016
“This is the lowest price ever seen, for any renewable technology,” an analyst told Bloomberg.
“With this auction, we can confirm that we are on the right path” in terms of energy policy, Chile’s President Michelle Bachelet told reporters Thursday. “This is good news for Chileans’ pockets, for the environment and also for the economy.”
Observers believe the record low price of solar energy could be an indication of future trends, with the price of coal power being twice as high as solar power. The auction is “a strong warning sign that the energy business continues on the transition path to renewable power and that companies should adapt quickly to this transition process,” Carlos Finat, head of the Chilean Renewable Energies Association (ACERA) told Bloomberg.
According to reports, the low price is likely a result of a combination of factors, including the rapid fall in the price of solar technology and the ideal location of the 120 MW solar plant. In fact, Chile’s Atacama desert is “the region with the highest solar radiation on the planet,” according to the Inter-American Development Bank. Earlier this year, “spot prices reached zero in parts of the country on 113 days through April,” forcing the country to give electricity away for free.
Wow. Chile is producing so much solar energy that it’s giving electricity away for freehttps://t.co/i4yNqvu97N pic.twitter.com/YucBodlpEP
— Climate Reality (@ClimateReality) 12 June 2016
Since 2013, solar power fed into Chile’s central grid, has quadrupled in capacity. Total installed capacity exceeds 1,000 megawatts – the most in South America. However, Chile’s solar power mission does not stop there. An additional 2,000 megawatts is already under construction and there are over 11,000 megawatts that are “RCA Approved.”
“Chile has the world’s highest solar radiation, 3,000 kilometers of coast and large rivers, so it has the conditions to increase renewable energy sources,” Energy Minister Maximo Pacheco said.
However, Chile is not the only country stepping up its solar and renewable energy efforts. Since 2000, the amount of electricity generated from solar technology has doubled seven times over. It is therefore hoped that this trend will continue to accelerate, leading the way to a future powered entirely by renewable sources.
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This article is really strange in my opinion as here in Australia, solar power (without subsidies) is by far the most expensive of all the energy sources.
I’d like someone to explain to me why free sunlight energy in one country can be very cost effective yet in another country be very expensive.
Please correct me if I am wrong but my understanding is that it is simple economics, which is to say supply and demand. Perhaps if Australia had more willing patrons then the production of equipment able to harness solar energy would increase leading to a general increase of solar resourcefulness.(this is mere speculation and is not to be taken 100% seriously)