Verano Capital, an American project developer headquartered in Santiago, announced that the 47 MW solar project they initially developed was selected in Chile’s latest energy tender with a winning bid at $25.38/MWh, the lowest 24/7 block price combining solar and wind ever recorded in the history of energy tenders.
The winning bid was offered by a solar project which will be coupled with wind projects to offer a 24/7 supply over a 20-year period. Dylan Rudney, CEO of Verano Capital, who originally designed and developed the solar project before partnering with the fund who eventually took the project to bid, expressed his satisfaction with the results of the tender.
“It was an extremely competitive tender. Contracts were awarded at an average price of $32.50/MWh, which represents a 75% drop from the peak of $130/MWh reached in the 2013 tenders. These are the lowest renewable energy prices we have ever seen on a 24/7 energy auction anywhere in the world. This will be most directly beneficial to Chilean energy consumers, but it also underpins the changing trend in the energy industry, where conventional energy sources are no longer able to compete with increasingly low renewable energy costs,” said Rudney.
Verano Capital, whose core business is to offer turnkey development, EPC, O&M, and asset management services to investment funds, has ambitious growth plans going forward. Verano is the leader in the PMGD* development market in Chile, with five operating utility-scale projects and five more to be commissioned in 2017. In addition, the company has over twenty projects seeking equity under development, representing a 150 MW pipeline to be commissioned over the next 18 months.
Verano, which currently has offices in Chile, Argentina and the US, is set to expand to Colombia this year. It also submitted a project totalling 100 MW in Argentina’s upcoming renewable energy tender, whose results are awaited this month.
“Our plan is to continue to strengthen our position in the booming Latin American renewable energy sector. Our broad range of in-house capabilities enables us to deliver complete projects, from early stage development all the way through to operation and maintenance. This is a key advantage, especially when combined with the in-depth market knowledge we have acquired over the years,” Rudney concluded.
Background
*PMGD projects (from the Spanish acronym, Pequeños Medios de Generación Distribuida) refers to projects with an installed capacity up to 9 MW and a connection to the distribution grid. Under the PMGD regime, projects get automatic grid access with a no curtailment guarantee, transmission toll reductions, as well as access to the stabilized pricing scheme.
About Verano Capital
Verano Capital was founded in 2012 to address the need of early stage investment and development of renewable energy projects in Latin America. Verano’s international team, advisory board, and affiliated companies, combine to create an interdisciplinary team with deep experience in all aspects of renewable energy projects from design, to financing, to construction, to asset management. Verano’s current focus is the Latin American market, particularly in Chile and Argentina.