Market Reports on China presents the report, on “China Power Report”. The government's use of energy auctions for the regulated market, coupled with energy demand from miners located far from the main power network.
Chile's power market will be one of the most attractive and dynamic in Latin America over the next few years, owing to the country's stable business environment and investor-friendly regulations, a solid macroeconomic outlook and robust growth in power consumption. The government's use of energy auctions for the regulated market, coupled with energy demand from miners located far from the main power network, will create long-term business opportunities for power generators. Meanwhile, the need to expand Chile's power grid will drive demand for transmission and distribution infrastructure.
Latest Updates And Structural Trends
-Our view that the Chilean power market will be one of the most dynamic in Latin America over the coming years, as well as our bullish growth outlook for renewables in the country, was reinforced by the results of Chile's latest power auction. Finalised in August 2016, the auction saw 84 domestic and international firms compete for power purchase agreements, with contracted companies expected to start supplying power in 2021 and 2022. The average price per bid at the auction was USD47.59/MWh -significantly lower than the USD79.34/MWh registered at the previous auction. The government expects this to translate into lower electricity bills for household and businesses in Chile starting from 2021.
- Companies bidding with renewable energy projects obtained more than 50% of the 12.430 terawatt hours (TWh) that the government was looking to secure in order to satisfy the demand of clients of the SIC and SING central and northern power grids. As a result, we have upgraded our forecasts for renewables power capacity and generation, driven by a stronger than expected expansion of wind power. The rest of the power will be supplied by utility Endesa Chile, via existing power plants (currently undisclosed).
-Conversely, as new gas-fired power projects failed to win any contracts at the auction, we have downgraded our long-term forecast for Chile's gas-fired power generation growth, although we continue to expect gas to increase its share in the country's power mix over the coming decade. Competitively priced renewables capacity will represent a hurdle for the contracting of new natural gas-fired power plants in Chile's upcoming power auctions. In order to mitigate this problem and contributing to its longterm goal of boosting the role of natural gas in Chile's energy mix, the government could implement changes in future auctions to boost gas plants' competitiveness.
Table of Contents
Table: Headline Power Forecasts (Chile 2015-2021)
Table: Country Snapshot: Economic and Demographic Data (Chile 2015-2020)
Table: Country Snapshot: Economic and Demographic Data (Chile 2020-2025)
Table: Country Snapshot: Power Sector
Chile Forecast Scenario
Coal Generation And Capacity Forecast
Natural Gas Generation And Capacity Forecast
Related Reports:China Energy Market Report
About Author Bio: Sarah Davis is working with MarketReportsonChina which is a portal where you can access thousands of reports on China starting from Aeronautics to Zinc (A-Z). The website provides market reports on different sectors.
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