Chile announces preliminary bidding rules for 5,400 GWh energy auction

26 May 2023
Chile announces preliminary bidding rules for 5,400 GWh energy auction

The Chilean National Energy Commission (CNE) has issued the details of its National and International Public Tender for the Supply of Energy and Electric Power 2023/01, which will address electricity supplies for regulated customers.

The CNE said in a statement that the planned auction will be for a total of 5,400 GWh, divided into two blocks of 1,800 GWh and 3,600 GWh each, to cover consumption from 2027 and 2028. The auction will include “important innovations” regarding the treatment of market risks and incentives for storage and non-variable renewable energies, noted the CNE. The innovations include “the segmentation of the bidding into three zonal blocks, an increase in the duration of supply contract to 20 years, the possibility of transferring the systemic costs of the short-term market, and the inclusion of a direct incentive for means of storage and generation with non-variable renewable energy sources,” it added.

Chilean Energy Minister Diego Pardow said that the division into three geographical zones will reduce risks for operators. He added that incorporating side payments for consumers helps operators mitigate risks and achieve greater flexibility in system operations. “The special consideration of flexible renewable energy sources allows us to work on strengthening the renewable energy storage pillar,” he explained.

CNE Executive Secretary Marco Antonio Mancilla said that the “measure is part of the mitigation of risks to suppliers that the initiative of the Ministry of Energy is considering and its main objective is to promote the portfolio of clean, efficient renewable generation projects and mitigate risks to which suppliers are exposed.”