Bloomberg reports that Spain’s Solarpack Corp Tecnologica has won a contract at a recent energy auction to sell power from a 120 MW solar plant in the Atacama Desert in Chile at a price of $29.1/MWh. This is a new world-record low price for solar power, beating the $29.9/MWh winning bid for a solar park in Dubai earlier this year. Contracts worth a total of 12.4 TWh a year of energy were awarded in the tender, with renewable-energy developers winning more than half of this total. The lowest price for wind power awarded in the auction was $38.1/MWh, for natural gas $47/ MWh, coal $57/MWh, and hydro $60/MWh.

Carlos Finat, the president of Chile’s renewable-energy association, commented: “This is a strong warning sign that the energy business continues on the transition path to renewable power, and that companies should adapt quickly to this transition process”.

The Atacama Desert, the driest place on earth and one of the best locations for solar power, was always a likely location where groundbreaking prices could be expected. However, the level of this price is still a major breakthrough, and suggests that as technology improves further over time – key to the cost structure of this bid, according to Bloomberg, was the continuing fall in the cost of solar panels – there is scope for further significant cost reductions in other parts of the world even if they do not enjoy the same natural advantages.