Increased hydro power generation and a newly commissioned solar power project has reduced the overall cost of electricity in El Salvador, the power regulator of the country – Siget recently stated.
Siget recently announced that the electricity tariff for the period 15 July to 15 October 2017 has fallen by 3.09% to $118.9/MWh. The price fall has come as a result of increased hydro power generation and operationalisation of a solar power project.
A 60 megawatt solar power project was commissioned by Neoen, a French independent power producer. The project was secured by the company in a competitive auction and sells electricity at a tariff of $0.1019/kWh which is 18% lower than the electricity tariff for the first quarter of this year. The project was secured in competitive auction held in 2014 and has been commissioned in partnership with a local conglomerate Almaval.
El Salvador has organised several competitive auctions for wind and solar power projects over the last couple of years. Earlier this year, it allocated four solar power projects with 120 megawatts of total capacity at tariffs between 4.955¢/kWh to 6.724¢/kWh. Successful project developers offered 36% to 53% discount compared to the ceiling tariff of 10.53¢/kWh set by the government.
The successful bidders – Tracia Network Corporation, Capella Solar, Sonsonate Energy and Asocio Ecosolar – shall signed power purchase agreements of duration 20 years and will be required to commission the projects in 2019.
Once these projects are commissioned the percentage of renewable energy in the country’s electricity mix will increased substantially. And given their low tariffs, the overall electricity price would also fall sharply.