Chile rejigs tender rules to attract bids from renewables

CHILE: Chile's National Energy Commission (CNE) has unveiled new rules for electricity supply tenders, including renewables, in a bid to attract new investment from renewables developers.

El Arrayan, Chile’s largest wind project
El Arrayan, Chile’s largest wind project

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The plan is to hold tenders for 15-year contracts for an additional annual 13GWh of long-term supplies by the end of the year. The deals will begin in 2016 (1GWh), 2017 (1GWh), 2018 (6Wh) and 2019 (5GWh).

In a statement, the CNE said: "The new conditions were designed to open up the market, to incorporate all technologies, habilitate large and small generation projects, offer certainty and permit demand conditions to facilitate a diversified, competitive and secure supply."

In order to attract bids for renewable projects, including wind and solar, CNE said that the contracts to be tendered in 2016 and 2017 will be divided into three blocks according to the time of day, with one block running from 11pm to 8am, a second from 8am to 6pm, and a third at the time of peak demand between 6pm and 11pm.

"This will increase the competitiveness of alternative renewable energy against conventional sources during the tender processes," the organisation said.

The development of renewable energy has been hindered by the lack of a specific mechanism to allow intermittent technologies, such as solar and wind, to compete with conventional sources such as coal and hydropower.

"These blocks will be open to receive offers from any kind of technology, but a segmentation by time will facilitate the diversification of supply," the CNE said.

The new rules form part of president Michelle Bachelet's Energy Agenda, which aims to reduce electricity prices on Chile's main grid by 30% to around $105/MWh by the end of her four-year term in 2018.

The new contracts will include delay clauses for companies that are delayed for unavoidable reasons, to encourage new players in Chile's electricity markets to participate in the tender.

Interested parties will have until December 1st 2014 to present bids for the tenders.

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