Uruguay publishes tender for 99 MW solar power and changes PPA rules for investors

Uruguay's National Administration of Power Plants and Electrical Transmissions (UTE) launched public tender P104220/2026 to contract energy from three new photovoltaic plants that will add 99 MW of injection capacity , through 20-year purchase agreements.

The call will accept proposals until January 27, 2027 at 1 p.m. and includes three independent projects, of 33 MW each , distributed between Tacuarembó, Florida and the eastern part of the country.

The publication of the tender formalizes UTE's return to contracting solar energy from new private developers, after more than a decade in which photovoltaic expansion was mainly linked to the state-owned company's own projects.

But it also resolves one of the main unknowns that accompanied the preparation of the call: what remuneration model Uruguay would use to attract new investments without replicating the contracts of the first energy transformation.

As Energía Estratégica reported in August, the National Energy Directorate (DNE) was evaluating different alternatives , including availability payments, network services, and a different distribution of risks between the buyer and the developers.

“There are many things we wouldn’t repeat or that we would change. So, without a doubt, the contracts, even if they are PPAs, would be different,” Arianna Spinelli , National Director of Energy, had anticipated during the XII LATAM Renewables Congress.

The final document confirms the use of power purchase agreements , with remuneration expressed in USD/MWh and additional obligations to provide electricity services included within the offered price.

How the new contract scheme will work

One of the central aspects is the planned income structure for the awardees.

For the first 15 years , UTE will pay for the energy based on the price offered by each developer. In the remaining five years, the value will be calculated based on 40% of the awarded price , with the corresponding adjustments.

The update formulas will be annual and will consider US and Uruguayan price indicators, as well as the evolution of the exchange rate, although with different weightings depending on the contractual stage.

Unlike the fixed fee alternatives that had been considered during the preparation of the call for tenders, the tender specifications state that the monthly billing will depend on the contracted energy and the current price.

The state-owned company will also acquire, through this remuneration, the rights corresponding to firm power, auxiliary services, night voltage regulation and other attributes that may be recognized for the power plants.

“We are thinking about the development of generation with new contracts that somehow contemplate everything that renewable energy has in itself: energy and network services,” explained Andrea Cabrera , president of UTE, in July.

The contract also includes payment for energy that cannot be dispatched due to operational restrictions. In such cases, the unsupplied generation, determined according to ADME's procedures, will be remunerated at the same contractual price.

This coverage is one of the relevant elements for evaluating the revenues of projects in a system that will have to incorporate new renewable generation while expanding its transmission infrastructure.

What changes compared to previous solar contracts?

The new call introduces differences with respect to the photovoltaic contracting regime of 2013 , established by Decree 133/013.

That scheme contemplated contracts of between 20 and 30 years for the largest scale power plants and a maximum price equivalent to USD 91.5/MWh for projects available before June 1, 2014, expressed in constant January 2013 dollars.

The new call, on the other hand, establishes a uniform duration of 20 years and a competitive award for lower comparative price, with differentiated remuneration during the last five years.

Another change appears in the charges for using the electricity networks .

While the 2013 regime exempted generators from paying distribution and transmission tolls during the contractual term, the current agreement expressly stipulates that these costs will be the responsibility of the developer.

The financing of the connection works, meanwhile, was already an obligation of private entities under the previous regulations. The 2026 call for bids maintains this condition and specifies that the winning bidders will also assume the costs and compensation associated with easements and land encumbrances.

The new provisions will require bidders to consider both the revenue from electricity sales and the connection costs and technical requirements demanded during operation.

Three zones, guarantees and requirements for the successful bidders

The tender is divided into three items that can be awarded independently.

The first one corresponds to Tacuarembó , with connections enabled in Cuchilla Peralta A, Cuchilla Peralta B and Chamberlain, all at 150 kV.

The second one will be located in Florida , where nodes can be selected in Pintado A, Pintado B, Florida, Colonia Sánchez and Durazno, with alternatives in 30 kV and 150 kV depending on the installation.

The third project will be located in the East Zone , with points enabled in Carapé, San Carlos, La Plata and Rocha.

Each central unit must locate its connection point within a maximum radius of five kilometers from the selected node and have exclusive evacuation infrastructure.

The successful bidders will finance the necessary works and, once completed and accepted, will transfer the corresponding connection infrastructure to UTE at no additional cost. The transfer obligation does not include the entire photovoltaic plant.

Within 60 days of the final award, the state-owned company will deliver the specific preliminary connection project, which will specify the works corresponding to each facility.

To participate, companies must provide a bid maintenance guarantee of USD 300,000 per project , while the maximum period for enabling the plants will be 24 months from the signing of the contract.

In case of non-compliance, developers may request an extension of up to six months, subject to a penalty of USD 4125 per day per park.

Without batteries and with pending definitions on national participation

The tender specifies that the power plants must exclusively use photovoltaic technology, and therefore cannot incorporate storage systems, wind power generation, biomass or other sources .

However, they must have the capacity to provide reactive power control services, including the so-called Q at Night , which allows them to contribute to voltage regulation during nighttime hours.

In parallel, UTE is considering incorporating national component criteria for the investment, the final methodology of which will be published through a circular.

This point will be relevant in determining how the hiring of Uruguayan suppliers and workers will be promoted within an award scheme aimed at obtaining competitive prices.

As background, the 2013 regulations established a minimum of 20% national component in project investment. However, current documentation does not yet allow us to determine whether this threshold will continue or be replaced by another methodology .

The tender, within the expansion plan towards 2030

The 99 MW are part of a broader strategy with which Uruguay seeks to incorporate at least 500 MW of photovoltaic capacity during the five-year period , through a combination of state projects and private participation.

The need to increase generation capacity was highlighted by the Minister of Industry, Energy and Mining, Fernanda Cardona , who warned about the accumulated delay in the incorporation of new power plants.

“It is a strategic necessity for the country,” the official said, referring to the expansion goal.

Planning is also contingent upon the available electrical infrastructure. The third 500 kV transmission corridor, designed to strengthen the connection between the central and southern regions of the country, will be a key project for integrating additional generation capacity and supplying new energy needs.

In parallel, UTE continues to develop its own parks, such as Melo and Punta del Tigre, under investment and contracting schemes different from the PPAs planned for the three new private projects.

With the final conditions published, the next step will be up to the developers : how many companies will participate, what prices they will offer, and how they will incorporate the technical obligations and risks established by UTE into their financial models.

The opening in January 2027 will reveal the market's response to a contract that resumes private participation in Uruguayan solar development, but under different rules than those used during the first photovoltaic expansion.