Chile roundup: Transmission auction bids, subsidy bill

Chile’s grid coordinator CEN published bidding details corresponding to two transmission auctions underway.

Overall, CEN has launched four this year, the latest earlier this month.

Second transmission auction of 2024

Officials received 34 technical bids in the second transmission auction of 2024.

On offer are 15 newbuild projects and five expansions corresponding to the national and zonal systems, including substation and power flow-control system construction work.

Overall required outlay for the 20 projects is around US$325mn.

The process relates to decrees No. 58/2024 and No. 4/2024 and economic bids are due to be opened January 29.

Eight parties are competing for the work: Alupar Chile Inversiones, Celeo Redes Chile, Empresa de Transmisión Electrica Transemel, Engie Energía Chile, Ferrovial Power Infrastructure Chile, Interconexión Electrica, Sociedad de Transmisión Austral and Transelec. 

A CEN document with further details can be downloaded from the box at the top of the page.

First transmission auction of 2024

CEN published details of the economic bids presented in its first transmission auction of 2024.

The process corresponds to decrees No. 4/2024 and No. 200/2022 and transmission regulation article No. 157. It comprises projects being auctioned for the first time along with some that have previously been put on the auction block.

Total investment was originally estimated at US$224mn.

CEN listed 21 projects that qualified – some having several components – and their lowest corresponding bids. 

Among them is the biggest single-component project, which involves hanging a second circuit on 2x500kV power line Ancoa-Charrúa, with an offer of US$106mn placed by Elecnor Chile, above the US$60.2mn reference price.

The lowest qualifying bids were placed by Changshu Fengfan Power Equipment, Powerchina Agencia Chile, Andaluza de Montajes Eléctricos y Telefónicos Agencia en Chile, Sistema de Transmisión del Sur, Monlux Chile, Elecnor Chile, and Tucapel Energía.

Two bids were voided for exceeding the price ceiling and reserve margin, while six bids were voided because their associated administrative offers did not fully comply with auction rules.

Formal award decisions were due to be announced Friday afternoon. 

A CEN document with further details can be downloaded from the box at the top of the page.

Subsidy bill

To obtain political backing in congress, Chile’s government, local daily Diario Financiero reported, is open to potentially removing what has become a controversial funding pillar of its subsidy bill 

The draft legislation contains several cash-raising measures to finance a subsidy scheme to support vulnerable households impacted by the unfreezing of electricity rates.

The pillar that has drawn fire from some quarters of the power sector involves temporarily trimming the revenue of the country’s growing fleet of distributed power plants known as PMGDs, a proposal that sparked allegations of unilaterally changing the rules of the game. 

These plants, up to 9MW and chiefly solar PV, receive a stabilized price, itself considered a de facto subsidy, shouldered by bigger generators and impacting systemic costs. 

Public-private working groups have analyzed the PMGD remuneration regime.

In an associated legislative development, a lower house committee voted in favor of another funding pillar, which involves temporarily doubling the carbon tax on fixed emitters to US$10/t from US$5/t currently, impacting thermoelectric generators. Energy minister Diego Pardow said this would raise US$70mn a year for three years.

Another pillar involves using the increased VAT associated with the bigger electricity bills that have started landing on client doormats. 

The number of vulnerable households that have applied for the subsidy so far is less than expected, easing demand for multiple funding sources. 

The draft legislation continues in the committee phase in the lower house.