Chile’s National Energy Commission (CNE) has released the preliminary terms for its 2026/01 electricity supply tender, seeking 2,835 GWh of electricity per year through long-term contracts. This is a technology-neutral tender.
The Chilean Association for Renewable Energies, ACERA AG, which gathers more than 120 members including developers, generators and suppliers of products and services, has shared this briefing and recommendations with the readers of The Voice of Renewables.
Purpose
This briefing assesses the design of Chile’s 2026/01 regulated electricity supply tender from ACERA’s perspective, with particular attention to its implications for renewable energy developers, key innovations compared with previous procurement rounds, and the likely effects on competition and consumer electricity prices.
Reference document: Preliminary Tender Rules approved by CNE Exempt Resolution No. 292 of 9 June 2026.
Executive assessment: The tender framework strengthens project bankability, encourages competition based on hourly and locational pricing signals, and formally incorporates energy storage as an eligible source of contractual backing. However, it also significantly increases requirements relating to project backing, financial close, guarantees and contractual documentation. Unless carefully implemented, these provisions could favour established utilities and large integrated portfolios over smaller or independent renewable developers.
Executive Summary
ACERA regards Supply Tender 2026/01 as a return to long-term structural procurement within Chile’s regulated electricity market. The tender seeks to contract 2,835 GWh annually through two separate supply blocks:
- BS1: 1,575 GWh per year, with delivery between 2029 and 2043.
- BS2: 1,260 GWh per year, with delivery between 2030 and 2044.
Both supply blocks are divided across four geographical zones and three daily time periods:
- Block A: Overnight and early morning hours.
- Block B: Daytime hours.
- Block C: Evening peak demand hours.
The design improves price formation by recognising both hourly generation profiles and locational factors, while creating opportunities for hybrid renewable projects and battery energy storage systems (BESS). Storage is explicitly recognised as eligible contractual backing, reflecting the growing importance of flexibility within Chile’s evolving electricity system.
At the same time, bidders must demonstrate that contracted volumes are supported by eligible assets connected to the National Electric System (SEN) and authorised to participate in the short-term market. Assets primarily fuelled by coal, petcoke, diesel or fuel oil No. 6 cannot be used as backing resources.
Perhaps the most significant change lies in the tender’s financing requirements. Annex 18 introduces a considerably stricter project-finance framework, requiring bidders to demonstrate financial close and provide a valid, unconditional and current Notice to Proceed (NTP) issued to the principal EPC contractor at least 18 months before the contractual Maximum Date. While these requirements improve execution certainty, they also raise barriers to entry for greenfield developers.
Energy Volumes and Commercial Implications
The tender allocates energy across three daily demand periods. The daytime Block B accounts for 44.4% of contracted volumes, making it the largest segment of the procurement programme.
This structure naturally favours solar generation, which is most competitive during daylight hours. However, compliance obligations in Blocks A and C will require more diversified portfolios incorporating wind generation, energy storage, contractual backing arrangements, or carefully managed exposure to the spot market.
A further notable feature is the concentration of demand within Zone 2, which represents approximately 63.5% of total contracted energy. This makes transmission congestion and nodal price differentials key factors in bid strategy and project economics.
How the Tender Differs from Previous Procurement Rounds
Compared with earlier tenders, the 2026/01 process introduces a stronger investment signal and greater emphasis on long-term project delivery.
The 2025/02 tender was an exceptional short-term procurement mechanism designed to address an immediate supply gap. The 2025/01 process generated strong competition, attracting 708 bids and offering almost four times the required energy volume, ultimately resulting in contract awards at US$64.499/MWh.
The new tender differs in several important respects:
- Fifteen-year contract durations provide long-term revenue certainty.
- Supply commencement dates are staggered between 2029 and 2030.
- Storage is explicitly recognised as an eligible backing technology.
- More demanding financial and contractual requirements are imposed through the backing annexes.
The innovation therefore extends beyond hourly and zonal segmentation. The real change is the combination of long-duration contracts, storage integration and significantly more rigorous execution requirements.
Key Design Features and Competitive Implications
Long-Term Contracts
Fifteen-year contracts improve bankability and can lower financing costs by providing long-term revenue visibility. However, developers must now model a wider range of risks over extended periods, including:
- Indexation mechanisms.
- System costs.
- Curtailment risk.
- Transmission congestion.
- Backing availability.
- Capacity and reactive power obligations.
Hourly and Locational Segmentation
The tender rewards technologies according to when and where they can deliver value. While solar projects are naturally competitive in Block B, they face greater challenges in overnight and evening periods unless paired with storage or complementary generation resources.
Storage as Eligible Backing
The explicit inclusion of storage is a positive development for hybrid renewable projects and standalone BESS investments. Nevertheless, the rules require conservative assumptions, including a one-cycle-per-day operational model and separate accounting for energy originating from renewable generation and storage assets.
Restrictions on Fossil-Fuel Backing
ACERA welcomes the exclusion of backing arrangements based primarily on coal, petcoke, diesel and fuel oil No. 6. This aligns procurement policy with Chile’s broader decarbonisation strategy and supports continued growth in renewable generation.
Financial Close and Notice to Proceed Requirements
The requirement to demonstrate financial close and provide an unconditional EPC Notice to Proceed significantly reduces the likelihood of speculative bidding. However, it also favours sponsors with established financing relationships, strong balance sheets and mature project development pipelines.
Principal Risks for Renewable Developers
Several aspects of the tender may present material challenges for renewable energy participants.
Financial Close and EPC Notice to Proceed
Developers must demonstrate, 18 months before the Maximum Date, that financing agreements are enforceable, conditions precedent have been satisfied or waived, initial funding has been disbursed and an unconditional EPC Notice to Proceed has been issued.
While this improves project certainty, it may disadvantage developers that lack access to sophisticated financing structures.
Back-Up Contracts and Partial Assignment
Under Annex 19, supplier default may trigger partial assignment of the supply contract to a back-up generator while preserving contracted volumes, pricing and indexation terms.
Although this protects continuity of supply, it creates the risk that project sponsors could lose part of an awarded power purchase agreement.
Direct Agreements for Existing Facilities
Projects relying on existing assets must secure direct agreements between facility owners, suppliers and the Mandated Distributor.
Failure to comply may affect bid guarantees, creating a potentially significant contractual bottleneck.
Performance Guarantees
The tender requires first-demand guarantees or insurance equivalent to UF 600 per GWh contracted during the final year of the supply period.
Because these guarantees do not limit additional liability claims, they may place substantial liquidity and collateral pressures on smaller developers.
Conservative Renewable and Storage Modelling
Renewable backing calculations must use P90 energy production assumptions, while storage modelling is restricted to one daily cycle and cannot rely on economic dispatch assumptions.
These requirements reduce the risk of overstating project capabilities but may undervalue the operational flexibility of modern storage systems.
Variable Demand Component
Each sub-block includes a 5% variable component designed to accommodate unexpected demand growth.
This could increase exposure to spot-market purchases during periods when physical generation does not fully align with contractual obligations.
Indexation and System Costs
While the tender allocates some risks through contractual mechanisms, it does not eliminate exposure to indexation and system cost volatility. Developers must therefore incorporate these factors into pricing strategies.
Congestion and Nodal Price Risk
The concentration of contracted volumes in Zone 2 heightens exposure to transmission constraints and locational price differentials. Developers will need sophisticated transmission modelling rather than relying solely on average levelised cost of energy (LCOE) assumptions.
Expected Impact on Competition and Consumer Prices
ACERA’s overall assessment is cautiously positive.
The tender could stimulate competition by enabling renewable and hybrid developers to build financeable portfolios supported by storage and diversified backing arrangements. Long-term contracts, storage eligibility and the exclusion of high-emission fuels all support Chile’s energy transition objectives.
However, there is also a risk that increasingly demanding financial and contractual requirements could favour incumbent utilities and large integrated players. The experience of the 2025/01 tender demonstrated that strong participation does not necessarily result in a diverse group of successful bidders.
For consumers, the outcome will depend on whether improved bankability and technology-specific competition outweigh the additional risk premiums associated with compliance requirements. Lower financing costs could ultimately reduce electricity prices, but these benefits may be offset if barriers to entry reduce competitive pressure.
ACERA’s Highlights
ACERA recommends that regulators:
- Maintain the long-term procurement signal needed to support investment in renewable generation and storage.
- Provide greater clarity regarding acceptable financial-close structures and documentation requirements.
- Reassess whether the unconditional NTP requirement is proportionate for projects facing regulatory or transmission-related delays outside developers’ control.
- Clarify the treatment of storage assets, including degradation, charging energy, availability assumptions, curtailment and system-service valuation.
- Consider mechanisms that preserve opportunities for new entrants while maintaining security of supply, including consortium structures, phased guarantees and project-substitution provisions.
- Ensure that treatment of system costs does not create misleading award-price signals that ultimately transfer volatility to consumers.
Conclusion
Supply Tender 2026/01 represents a significant opportunity to accelerate renewable energy and storage investment in Chile’s regulated electricity market. At the same time, it establishes a new benchmark for project maturity and execution capability.
Competitive pricing alone will no longer be sufficient. Successful bidders must demonstrate robust project backing, secure financing, contractual readiness and the ability to manage increasingly complex system risks.
The central challenge for regulators will be to strike an appropriate balance between safeguarding security of supply and preserving a competitive market capable of attracting new renewable investment and a diverse range of participants.
About ACERA
Led by seasoned industry expert, Ana Lia Rojas, ACERA, the Asociación Chilena de Energías Renovables y Almacenamiento, is Chile’s leading trade association representing renewable energy developers, energy storage providers and companies across the clean energy value chain.
The organisation plays a central role in shaping the country’s energy transition by engaging with regulators, policymakers and market participants on issues including renewable energy deployment, transmission infrastructure, electricity market design and energy storage integration. Its membership includes many of Chile’s largest solar, wind, battery storage and green hydrogen developers, giving it significant influence in industry discussions.
Through technical studies, policy recommendations and public advocacy, ACERA promotes regulatory frameworks that support investment, competition and decarbonisation while ensuring the reliable operation of Chile’s rapidly evolving electricity system.
In recent years, the association has become an increasingly prominent voice on topics such as transmission congestion, curtailment risks, storage market participation and the development of Chile’s green hydrogen economy.
