Uruguay Plans 99 MW Solar Tender with 20-Year PPAs

Uruguay’s national electricity company, Administración Nacional de Usinas y Trasmisiones Eléctricas (UTE), will buy output from three privately built solar farms that together can inject 99 MW into the grid. Each farm is sized at 33 MW of injection capacity and will be sited in separate zones across the north, centre and east of the country.

How the procurement is organised

UTE outlined the preliminary conditions at a technical meeting in Montevideo together with the Ministry of Industry, Energy and Mining. The formal tender papers are set for release on 28 October 2026, and offers must be submitted by the last week of January 2027. The three projects are independent; a bidder may compete for one, two or all three, quoting a single price per project. UTE will judge each offer on price alone and can award all three contracts to the same developer.

Two‑stage payment formula

The contract spans 20 years but the revenue model changes after year 15. For the first 15 years the developer receives the bid price expressed in dollars per megawatt‑hour, adjusted each January. The indexation mixes a fixed component (60 %), the US producer price index (12 %) and Uruguay’s own producer price index combined with exchange‑rate movements (28 %). In the final five years the payment falls to 40 % of the original bid price, with indexation weighted 30 % to the US index and 70 % to the Uruguayan indicator adjusted for currency shifts. UTE also promises compensation at the contract price for any energy that cannot be delivered because of grid constraints.

Local content and workforce rules

At least 80 % of the labour force must be Uruguayan citizens or residents. Half of that domestic share has to be filled by women, workers over 50, or people under 24. A domestic‑goods score worth 65 points covers items such as construction‑site clothing and equipment; the final methodology awaits ministry approval.

Technical specs require reactive‑power capability, including a “Q at Night” function that lets the plants support voltage control after sunset. Battery storage is not permitted. Construction must finish within two years. A bid bond of US$300,000 per project is required, and performance guarantees are calculated as 1 % of projected annual revenue over half the contract term, assuming a 0.26 capacity factor; the execution guarantee is four times that amount.

This tender is part of a broader goal to add roughly 500 MW of solar capacity during the current five‑year period. UTE is also developing its own plants: a 30 MW site in Fray Bentos (about US$20 million), a 100 MW facility in Melo (over US$75 million, slated for 2028 start‑up), and a relocated project in Baygorria. For residential owners curious about the economics of solar, reading about how a solar panel system pays for itself can provide useful context.