Whoever tenders by time blocks may pay for the evening at the midday price

In 2025, Chile tendered the energy for its regulated customers in 3 time blocks and awarded all 3 at USD 64.5/MWh.

The rules of tender 2025/01 separated night, from 23:00 to 07:59; solar, from 08:00 to 17:59; and evening peak, from 18:00 to 22:59. The Comisión Nacional de Energía (CNE) received 708 offers, 3.9 times the energy requested. It awarded 100% to 1 generator, at USD 64.5/MWh in each block, on the lowest present value of the offered prices and their indexation.

Price equality leaves open what the energy is worth in each time band. The supplier is exposed to the difference between that price and its supply cost, and capacity is paid separately.

We propose that, with a Capital Allocation Decision System, the buyer evaluate each offer before awarding. It would evaluate each offer by its total cost, its coverage in the hours the system requires, and the cost of replacing it if the contract ends early. The test would be whether that total cost is documented against the alternatives, even when a uniform price across time bands is chosen.

How will supply shortfalls under your contract be paid for?

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