Chile releases first power auction rules allowing battery storage

Chile’s National Energy Commission (CNE) has approved the preliminary terms for its 2026/01 power supply auction, the first such tender to explicitly allow energy storage systems to participate as standalone supply resources alongside generation assets.

While the auction is technology-neutral, the framework is expected to favor renewable energy projects, particularly solar paired with battery storage. Bids must be backed by generation or storage assets connected to the National Electric System (SEN), while coal, petroleum coke, diesel and No. 6 fuel oil are excluded as primary fuel sources.

The tender allows storage systems to serve as contracted supply resources, provided participants meet requirements related to energy withdrawals, backup capacity and short-term market participation. For hybrid renewable-plus-storage projects, energy generated by the power plant must be accounted for separately from energy discharged by the storage system.

The auction comprises two supply blocks:

• Block 1: 1,575 GWh/year, with supply running from Jan. 1, 2029, to Dec. 31, 2043.
• Block 2: 1,260 GWh/year, with supply running from Jan. 1, 2030, to Dec. 31, 2044.

The total contracted volume is 2,835 GWh/year under 15-year agreements.

A key feature of the auction is its time-of-day structure. Each block is divided into three delivery bands:

• Band A: 00:00–07:59 and 23:00–23:59
• Band B: 08:00–17:59
• Band C: 18:00–22:59

Band B, which aligns with peak solar production hours, accounts for the largest share of demand, totaling 700 GWh in Block 1 and 558 GWh in Block 2.

The structure also creates opportunities for battery storage, particularly in Band C, which covers evening peak demand and totals 389 GWh in Block 1 and 312 GWh in Block 2.

The tender includes a variable component equivalent to 5% of annual base demand to cover unexpected consumption increases, requiring bidders to account for flexibility alongside contracted supply obligations.

The CNE expects regulated electricity demand to continue growing over the study period, with demand forecast to increase from 32,863 GWh in 2029 to 41,789 GWh in 2037.

The preliminary schedule sets the auction launch for July 1, 2026. Bid submissions are due Dec. 4, 2026, with economic offers to be opened on Jan. 5, 2027, and awards scheduled for Jan. 13, 2027.

Bids must be submitted in USD/MWh. The reserve price will be set by the CNE and disclosed only when economic offers are opened. Offers above the ceiling price will be rejected.

From pv magazine LatAm