The world’s cheapest unsubsidised power plant is set to be built in Chile in the form of a 120MW solar farm, following the country’s energy auction last week.
Leading analyst firm Bloomberg New Energy Finance (BNEF) said one of the contracts secured during the auction went to Spain-based solar developer Solarpack Corp Tecnologica with a bid to sell power from a 120MW project at a price of $29.1/MWh.
The bid undercuts the previous record low bid which emerged earlier this year in a Dubai Electricity & Water Authority energy contract auction and saw an unnamed developer table a bid to deliver solar power at $29.9/MWh.
Writing on Twitter over the weekend, BNEF founder Michael Liebreich said the Chilean project meant solar power would deliver “cheapest unsubsidised electricity ever, anywhere, by any technology: $29.1/kWh”.
However, there are caveats to this story about the latest solar farm undercutting coal and other technologies for electricity production.
The deeper dive reveals that prices are low in this northern region because it’s not connected to the country’s main power grid, leaving the more populated centers in the central part of the country with little benefit.
“The fact that most of the demand is in the central grid, yet the best solar resource in the country resides in the Atacama desert in the north has caused players to consider a fundamentally different way in developing solar projects…A deeper knowledge of the transmission changes and knowledge of where projects will have to be located in order to successfully connect to the grid will also be a priority,” according to PV Insider, EcoWatch’s source.