Aurora’s framework decomposes regulated PPA economics into distinct elements including baseload supply value, technology-specific capture price risk, the cost of purchasing contracted but ungenerated energy, nodal price differentials, transmission and system costs, volume risk, and modulation factors. The consultancy identifies three critical nodes within contract structure: the bid node where generators submit proposals, the withdrawal node where distributors acquire energy to supply the contract, and the injection node where the plant physically delivers output to the grid. Differences between these points create economic exposure for suppliers.
The analysis concludes that modulation factors only partially compensate for differences between bid and withdrawal nodes and do not fully replicate intraday price evolution, particularly during peak solar generation hours. Aurora maintains that evaluating bids solely on average prices is insufficient; projections of nodal pricing, congestion, and transmission risk across the full contract term are necessary. This gap between modulation mechanisms and actual price patterns represents unhedged exposure that affects bid competitiveness.
Utilization risk emerges as another significant factor. Aurora data shows regulated contract utilization declined from 92% in 2015 to 58% in 2022, with material differences across zones and time blocks. For one reference contract analyzed, lower utilization represented approximately 20% of total PPA value. The consultancy’s model incorporates nodal and time-block demand projections to estimate this risk within each bid.
The National Energy Commission organizes regulated supply tenders. The current 2026/01 tender covers 2,835 GWh annually distributed across four geographic zones, structured in two contractual blocks and three time bands. The first block comprises 1,575 GWh annually under 15-year contracts starting in 2029, while the second totals 1,260 GWh annually, also for 15 years, from 2030.
Raúl Urtubia, Research Product Manager at Aurora Energy Research, noted that repeated wins by the same adjudicator may create the impression that results are predetermined, but the data demonstrates tight competition. The difference between winning and losing can depend on a fraction of price, volume allocation across zones, or indexation structure, according to Urtubia.
This article was curated and published as part of our South American energy market coverage.
