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Solar Power Thrives In Chile, No Subsidies Needed
Solar very well may become the most economic choice world-wide. Seriously, no breaking your back to get at the coal and no billions of bucks going after oil finds. A winner.
Solar is now the cheapest source of electric power in Chile, according to a new report by Deutsche Bank.
In Chile’s most recent power auction, the bids from solar project developers came in at between $65 and $68 per megawatt hour (MWh) were considerably more competitive than bids made by coal plants, which were priced at $85 per MWh. Solar power projects were awarded the lion’s share of the 1,200 gigawatt hours (GWh) of electricity contracts sold.
Chile boasts one of the world’s biggest solar resources. High electricity prices and strong demand from Chile’s mining industry have driven demand growth for solar, especially large scale commercial or utility projects.
The total installed solar capacity in Chile increased from less than 4 MW in 2013 to more than 220 MW last year. Nearly 1 GW of solar is projected to be installed in Chile in 2015. Meanwhile, a total of about 8 GW of solar power projects have been approved for development in Chile. First Solar FSLR +1.89% and SunEdison are two of the biggest U.S. solar companies active in Chile.
In terms of power demand growth, per capita electricity consumption in Chile increased by about one third between 2000 and 2010. The total power demand growth in Chile has supported the surge in solar power over the past two years. In particular, Deutsche Bank attributes the recent surge in solar deployment to Chile’s electric-intensive mining industry.
The primary challenge to sustaining recent growth rates is Chile’s transmission grid. The solar resource potential – and the majority of installed solar capacity – is primarily located in the northern part of Chile. However, “all the best spaces for solar projects [in northern Chile] have generally been already taken,” said Vishal Shah, a solar market analyst at Deutsche Bank, in an interview with PV Tech.
Solar very well may become the most economic choice world-wide. Seriously, no breaking your back to get at the coal and no billions of bucks going after oil finds. A winner.