August 17, 2016 / 3:57 PM / 2 years ago

European renewable companies score at record Chile power auction

SANTIAGO, Aug 17 (Reuters) - European renewable energy companies were among the biggest winners in a massive energy auction to supply Chile with power for two decades from the 2020s, the country’s energy ministry said on Wednesday.

Successful bidders included Spanish firms Ibereolica, Cox Energy and Acciona Energia, Italian utility Enel’s local arm Endesa Chile and private renewable energy developer Mainstream.

The average winning price was $47.6 per megawatt hour, well below original market expectations of around $80.

The auction to supply a total of 12,430 gigawatt hours annually for 20 years - Chile’s largest ever - had been competitive, thanks to aggressively low priced bids, mainly from renewables.

Wind power accounted for 40 percent of the winning bids, and solar around 10 to 12 percent, Energy Minister Maximo Pacheco said at a presentation of the results.

The price was some 40 percent below last year and over 60 percent lower than the average obtained in a 2013 auction, he added.

“The focus in this case was the price and it went beyond expectations,” said Pacheco.

“With these electricity prices, we are going to be more competitive and productive.”

It would also spur an estimated $3 billion in investment, he said, as more than half the infrastructure needed to supply the winning bids remains to be constructed.

Mainstream said in a separate statement that would include $1.65 billion for the building of seven wind energy plants by the company.

Demand for energy has risen rapidly in Chile, which has had among the highest power prices in Latin America and an energy-intensive mining industry that produces around a third of the world’s copper, much of it from remote desert areas.

It has practically no hydrocarbons of its own, but ample potential for renewable energy, which has been expanding quickly in recent years. (Reporting by Felipe Iturrieta and Rosalba O’Brien; Editing by Marguerita Choy)

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