On June 9, 2026, the National Energy Commission (CNE) approved the Preliminary Terms and Conditions for Supply Auction 2026/01, a regular long-term auction conducted pursuant to Article 131 of the General Electricity Services Law (LGSE). The auction is intended to cover the projected supply deficits of electricity distribution companies beginning in 2029.

As an immediate matter, it is important to note that, pursuant to Article 18 of the Auction Regulations, distribution companies have 15 business days from notification to submit comments on the Preliminary Terms and Conditions, while the formal public call for bids is scheduled for July 1, 2026.

1. Key Features

The auction covers two 15-year Supply Blocks: • Supply Block 1 (SB1): 1,575 GWh per year, from January 1, 2029 through December 31, 2043. • Supply Block 2 (SB2): 1,260 GWh per year, from January 1, 2030 through December 31, 2044. The total volume offered amounts to 2,835 GWh per year, divided into a Base Component and a Variable Component equal to 5% of the Base Component, designed to accommodate unforeseen increases in electricity demand.

Both Chilean and foreign legal entities may participate, either individually or through consortia, provided they demonstrate a credit rating of at least 5.0, in accordance with Annex 14. Coal, petroleum coke, diesel fuel, and No. 6 fuel oil may not be used as the primary fuel for the generation assets supporting the bids, thereby limiting the pool of eligible generation resources. The Terms and Conditions permit bids backed by New Generation Projects, subject to a detailed framework governing financial close, Notice to Proceed, back-up supply agreements (Annex 19), and Direct Agreements (Annex 20). Failure to complete such projects in a timely manner triggers the automatic partial assignment of the supply contract to the designated back-up generator.

With respect to the award mechanism, the auction consists of two stages. During the first stage, bids are selected based on the combination that minimizes the weighted average Levelized Price for the relevant Supply Block. If that combination does not fully satisfy the required supply, a second-stage auction is held among bidders that successfully passed the administrative evaluation. The Reserve Price will be established by the CNE through a confidential administrative resolution and will only be disclosed upon the opening of the financial bids.

2. Fechas clave

3. Final Remarks

The next 60 to 90 days will be critical for market participants. The principal opportunity to influence the regulatory framework is the 15-business-day period for submitting comments on the Preliminary Terms and Conditions. In addition, the period for bidder inquiries closes on August 28, 2026, and the final amendments to the Terms and Conditions are expected by October 2, 2026. Particular attention should be paid to the express exclusion of certain fossil fuels as eligible primary energy sources, the role of energy storage systems as eligible resources, the regulatory framework applicable to New Generation Projects and their qualification requirements under Annexes 18 through 20, and the detailed treatment of System Costs, which will be incorporated into the energy price through the applicable indexation formula.

Si requiere información adicional sobre esta materia, contactar a Francisco López (flopez@jdf.cl) o Eduardo Silva (esilva@jdf.cl).