Add olive oil to a sauce pan over medium heat, then add onions and cook for 2-3 minutes. Add garlic and continue to cook for 2-3 minutes or until garlic starts to get golden. Add tomatoes, piquillo peppers, salt, chipotle powder, sugar and paprika and bring to a low boil, then reduce to a simmer. Simmer for 20 minutes, then using an immersion blender, pulse to smooth out the sauce (I don’t want it completely smooth.) You may also use a regular blender or food processor for this. Set sauce aside until meatballs are ready to put in pan.