The Chilean National Energy Commission (CNE) has announced its plan to auction 2.31 TWh of renewable energy capacity in May 2021. The auction will also include the option of deploying storage systems. The final bidding terms will be issued in December 2020. CNE has stated that the preliminary terms and conditions of the tender will introduce some changes to reduce some risks in order to encourage the participation of bidders to ensure competitive prices.
Interested national and international power generators can submit proposals for the projects that can start generating clean energy starting from 2026 for a period of 15 years. Electricity generated will be procured by electricity distribution companies under long term contracts with the winners to supply this power to residential consumers and small and medium enterprises (SME).
According to the preliminary bidding terms published by the CNE, the selected projects must start delivering power to the Sistema Interconectado Central and Sistema Interconectado del Norte Grande electricity networks on January 1, 2026. These plants will supply electricity under 15-year power purchase agreements for 2026-2040.
The auction was originally planned to be held in June 2020 and to contract around 5.6 TWh, but it was then postponed due to the ongoing Covid-19 crisis. In July 2020, the Ministry of National Assets selected eight companies to develop over 2.6 GW renewable energy on federal land with Solarcentury winning largest chunk of 1.04 GW.
Prior to that, the Chilean government allocated 2.2 TWh in renewable energy auction held in early November 2017. In this procurement process, the lowest electricity price bid – $21.48 per MWh – was submitted by the Enel Generación Chile subsidiary of the Italian energy giant. The final average electricity price was $32.50 per MWh.