For the buyer, the cheapest MWh and the cheapest critical hours may differ

Firmness mechanisms exist in the 7 countries reviewed. Contracting energy and covering critical hours should be evaluated together.

Those mechanisms — capacity, backup, replacement — vary from country to country. In Peru, in the May 2025 to April 2026 tariff, the reserve, capacity, and reliability charges add up to PEN 10.1 per kW per month. The renewable premium adds up to 7.1. Those charges pay for system backup, and their attribution to renewables remains unproven.

The processes reviewed compare indexed prices, consumer benefits, or joint capacity and energy costs. Their public documents did not show an integrated account of the cost of replacing the energy if the contract fails.

We propose that, with a Capital Allocation Decision System, the buyer evaluate contract, capacity, and replacement cost together according to its critical hours, within the current award criteria. The test would be whether the buyer documents the total cost and coverage of the chosen offer against the alternatives.

What does your contract cover when the resource is missing, and who pays for that hour?

The full Perspective, with its sources, is available on request.