LAW NO. 20,698 PROPITIATES THE EXPANSION OF THE ENERGY MATRIX, USING NON-CONVENTIONAL RENEWABLE SOURCES Having present that the National Congress has given its approval to the following bill initiated in a Motion of the Honorables Senators Mr Jaime Orpis Bouchon, Mrs Isabel Allende Bussi and Exxima Rincon González, and Mr José Antonio Gómez Urrutia and Mr Antonio Horvath Kiss. Bill: " Article 1.-Introduces, in the decree with force of law No. 4, of the Ministry of Economy, Development and Reconstruction, 2007, that fixes the recast, coordinated and systematized text of the decree with force of law No. 1, of the Ministry In 1982, which contains the General Law on Electrical Services, the following amendments: (1) In Article 150a: (a) Redeploy, in the first paragraph, "10%" by "20%". (b) In the sixth indent, the following final sentence shall be added: " The designated Peajes Directorates shall also keep a public record of all transfers and securities of non-conventional renewable energy certificates issued by that Address. "(2) Incorporate the following Article 150 ter:" Article 150 ter.-To comply with part of the obligation laid down in the first indent of the previous article, the Ministry of Energy shall carry out annual public tenders, for the provision of annual energy blocks from generation of non-conventional renewable energy. For these purposes, the Ministry of Energy shall make up to two tenders per year in the case of the aforementioned block not covered in its entirety. Each invitation to tender shall be made in order to give full coverage to that part of the obligation referred to in the first indent of the previous article, which is not covered by the injection of energy from non-conventional renewable energy projects. in operation, under construction or awarded power blocks, at the time of the start of the tendering process, in respect of the fee payable to the third year following that year, which shall be considered for the purposes of this Article as the year of commencement. However, the Ministry of Energy will not be obliged to carry out such tenders when the obligation indicated is met. The blocks awarded shall be intended to comply, in all or part, with the obligation referred to in the first indent of the previous Article, and therefore the electrical undertakings carrying out withdrawals from the system may prove their compliance by means of the certificates issued for the injection of energy tendered and effectively injected, in proportion to their withdrawals. Without prejudice to the above, if the blocks awarded do not cover in full the terms of the tendering procedure, or the invitation to tender is declared deserted, compliance with the obligation in respect of that block shall be deferred for the year after the start. The energy block to be tendered shall be indicated in the corresponding tendering bases, without being able to exceed the share of energy from non-conventional renewable energy generation means established in the law. For these purposes, the Ministry of Energy shall request the Commission to provide a technical report setting out the non-conventional renewable energy block to be tendered, and shall consider the final technical report of the current knot prices at the moment. publication of the relevant tendering bases. The period of validity of the tendered energy injections, the annual energy block to be tendered and the prices awarded shall be for ten consecutive years, counted from the date of the start of the injection of energy, as determined by the bases. (a) tender. The tender bases will be prepared by the Ministry of Energy. A Regulation shall lay down the minimum content of the tendering bases, which shall also lay down, inter alia, the criteria for the assessment of tenders and the selection of tenderers, the information to be requested from undertakings (a) the corresponding power and all other matters necessary for the proper implementation of this Article. Without prejudice to the foregoing, the basis for the first invitation to tender for each process shall be published within the first half of the relevant period and at least specify the conditions for competition, technical and commercial information. to deliver each participant, the guarantees, the time limits and the conditions to apply, the way in which the offers and the mechanisms to ensure compliance with their obligations are to be presented. Separate and independent tendering processes may be carried out for each electrical system with an installed capacity exceeding 200 megawatts for which the obligation referred to in the first subparagraph of the previous Article is to be fulfilled. All those projects which, at the time of publication of the bases, are not interconnected to the respective electrical system, may participate in the bidding processes. Proposers submitting tenders in the respective tendering processes shall indicate in their proposal the non-conventional renewable energy injection commitment they will make annually, indicating the monthly injection commitment for to comply with the said annual commitment. In addition, the proposers must, at the very least, comply with the following, in accordance with the provisions of the relevant bases: (i) Credit that the non-conventional renewable media projects of which they are the holders count with a favourable environmental rating resolution, if applicable, in accordance with the rules in force. (ii) Credit that the non-conventional renewable generation media projects of which they are holders, and which participate in the tender, have a subscribed capital, or have formal commitments of capital, equal or higher 20% of the total required for the construction and operation of the respective project. (iii) Credit that they are owners, users, tenants, dealers or holders of easements on the grounds on which they are located or build the means of generating non-conventional renewable energies, all or part of whose production is offered in the tender; that they have requested the respective concession, or that they have a contract of promise regarding the holding, use, enjoyment or disposition of the building that enables it to develop the project. (iv) Deliver a caution for the seriousness of the offer. (v) Deliver a course to ensure the effective implementation of the project, according to the technical characteristics of the proposal presented. The award shall be made taking into account the volumes of energy offered and the unit prices associated with them, and the offers with lower prices shall be awarded. In the case of tenders at more than one injection point, the comparison between the prices offered shall be made by referring all the prices to a particular point in the system. To this end, the energy prices offered corrected by the energy penalty factors of the corresponding system, as set out in the most recent definitive technical report on NKs, shall be considered as being in force at the date of publication. of the basis of invitation to tender, or the mechanism to be established by the Regulation. However, a maximum price for energy equal to the average cost of long-term development of an efficient expansion project in the corresponding system, the current value of which is the current value, will be established in the relevant tendering bases. net is equal to zero. This shall be deemed to be the final technical report for the price of the knot and may be increased by up to 10%. Any proposer may be awarded the whole or a partial amount of the energy blocks he has offered. The energy price to be collected by those successful in the tendering process shall be the responsibility of each participant indicated in his proposal, and shall include both the value of the energy and the value of the certificate issued by the Corresponding tolls of energy from non-conventional renewable means of generation. Together with offering a price for the initial month, the proposers may include an indexing mechanism, which must conform to what the bases indicate. For these purposes, each Peajes Directorate will conduct a monthly liquidation of the injected unconventional renewable energy balance, considering the monthly average of the instantaneous marginal costs at the injection point and the price Cited. In case the balance sheet shows that the income from the injected energy, valued at the average marginal cost, is greater than the income from the injected energy valued at the quoted price, the electricity companies that make withdrawals from the system receive the difference, in proportion to their withdrawals, up to a maximum value of 0,4 UTM per MWh, the excess of that figure being perceived by the respective non-conventional renewable generator. On the other hand, if the income from the injected energy, valued at the monthly average of the marginal costs, is lower than the income from the injected energy valued at the quoted price, the electricity companies that make withdrawals from the The system shall pay the difference, in proportion to its withdrawals, up to a maximum value of 0,4 UTM per MWh. If the monthly energy actually injected by a proposer that has been awarded the tender is greater than or equal to the committed monthly block, the excess energy shall be valorised at the instantaneous marginal cost of each electrical system, in accordance with the provisions of the first paragraph of Article 119 of this Law. The successful bidder will receive an equal amount to the valorization of the block committed according to the conditions offered plus an amount corresponding to the surplus of energy, valued in the form indicated precedence. At the same time, the successful tenderer will receive the non-conventional renewable energy certificates issued by that Directorate corresponding to the injection of the above energy surplus. The monthly injected energy corresponding to blocks awarded and committed in any of the tenders referred to in this Article shall be used for the fulfilment of the obligation referred to in the first paragraph of the previous article. To this end, each month, this energy will be allocated to all the companies that make withdrawals, in proportion to the amounts of energy withdrawn in the month for each of them. The abovementioned energy valuations, as well as the determination of monetary transfers, shall be carried out by the appropriate Directorate of Peages. "3) Add the following Article 1717a:" Article 174 a.-The plans for expansion of The generation facilities of each medium system should consider non-conventional renewable generation media projects, which should be prioritized in relation to other primary energy sources considering an efficient expansion of the system. " Article 2.-Substitute the fourth paragraph of article 1 of the transitional article of Law No. 20,257, for the following: " However, the obligation referred to in the first subparagraph shall be 5% for the years 2010 to 2014, increasing by 0,5% per year from the year 2015. This progressive increase will be applied in such a way that the withdrawals affected by the obligation to the year 2015 will have to comply with 5.5%, those of the year 2016 with 6% and so on until the year 2024 the 10%, for the contracts concluded with after 31 August 2007 and before 1 July 2013. For contracts signed after 1 July 2013, the obligation referred to shall be 5% for 2013, with increases of 1% from 2014 to 12% for the year 2020, and increases of 1,5% from the year 2021 until the end of 2013. 18% the year 2024, and an increase of 2% to the year 2025 to reach 20% by the year 2025. The tendering mechanism shall apply for the year 2015. If the regulation is not in force for that period, the invitation to tender shall start to run from the following year and so on. For the period in which the tendering mechanism has not started to apply, the obligation shall be fully enforceable for the power undertakings which make withdrawals. ' Transitional Article.-Within 90 days of the publication of this law in the Official Journal, a regulation laying down the conditions of the tendering procedure laid down in Article 150b of the Treaty shall be laid down. General Law on Electrical Services, and the other rules necessary for its effective implementation. " And because I have had to approve and sanction it; therefore, promulgate and take effect as the Law of the Republic. Santiago, October 14, 2013.-SEBASTIAN PINERA ECHENIQUE, President of the Republic.-Jorge Bunster Bettele, Minister of Energy. What I transcribe to you for your knowledge.-Saluda Atté. to Ud., Chief of Staff Minister of Energy.