Mainstream and Actis go to court over Chile tender

CHILE: Aela Energia, the joint venture formed by UK investment fund Actis and Irish renewables developer Mainstream, has gone to court in Chile to challenge the results of last month's major power tender after the firm missed out on contracts to supply 1,320GWh.

Chile is looking to increase its wind power capacity

To meet the demand, Aela was planning to invest $860 million over the next three years to build five new wind farms in Chile: Sarco (150MW), Alena (44MW), San Manuel (26MW), Cuel (33MW) and Aurora (84MW). The 15-year contracts were come into force from 2018.

However, although Aela submitted the lowest tariffs, its bids were disqualified over an administrative error (the documents were presented under the brand name Aela Energia rather than the legal nomenclature of Aela Negrete).

In the injunction presented before the Santiago Courtof Appeals earlier this month, Aela's lawyers accused the official responsible for the tender, Francisco Sanchez, of "illegal and arbitrary" action and exceeding the powers granted to him under the tender rules.

With Aela disqualified from the race, the contracts were picked up by French energy giant EDF, which is planning to build a 1,140MW gas-fired combined cycle plant in southern Chile.

The entry of a strong participant like EDF into Chile's highly-concentrated electricity market has been welcomed by the authorities. However, Aela said the decision would put up electricity bills for regulated clients in central Chile by around $11 million annually and increase atmospheric emissions.

Renewable companies, including Abengoa and Acciona of Spain, won almost 20% of the demand on offer in last month's tender after the government changed tenders rules to allow firms to offer electricity during certain periods of the day, thereby favouring solar and wind projects.

Speaking this month, the head of Chile's renewable energy association ACERA, Carlos Finat, said he expected renewable energy to make further gains at major tenders planned for later this year.