Chile power auction: Intense competition expected to yield low bid pricing

After a four-year hiatus, Chilean authorities have organised a regulated electricity auction expected to be held this month for an annual volume of 2.2 TWh. According to the timeline in the auction documents, participants must submit their economic offers on 25 June for the 15-year contracts that will start in 2026. Amid a boom of renewable energy development in the country, long-term power contracts are an attractive opportunity for owners of either existing generators or greenfield assets to secure a stable revenue stream. However, since the amount of energy currently available in the market is 3.6 times bigger than the amount set to be auctioned, competition for these contracts will be fierce.