New option to offset penalties imposed by CAMMESA under PPAs through investments in new renewable power generation projects

On November 1^st, 2023, the Secretary of Energy enacted Resolution 883/2023 (“Resolution 883”) which establishes the possibility of offsetting penalties imposed by the Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima (“CAMMESA“) through investments in new power generation projects from renewable energy sources.

The measure is intended for renewable energy generation projects that entered into Power Purchase Agreements with CAMMESA, including those under the RenovAr Program (Rounds 1, 1.5, 2 and 3), Resolution 202/2016 of the ex- Ministry of Energy and Mining, and Resolution 36/2023 of the Secretary of Energy that implemented the “RenMDI” call for proposals (the “Projects“).

Eligible penalties to be offset are related to non-compliance with: (i) Scheduled Commercial Operation Date; (ii) Contracted Energy Supply; and/or (iii) Declared National Component (CND), as well as other penalties that may be reported by CAMMESA to the Secretary of Energy and that could be offset under the scheme approved by Resolution 883.

Projects that have already been notified of penalties will have time until November 30 to adhere to this regime.

Commercial operation date of the new renewable power generation projects shall be accomplished within a 36-month term from the execution of an agreement with CAMMESA, period under which penalties will be suspended.

The price of the energy supplied by the new installed capacity will be established in twenty U.S. dollars per megawatt hour (US$ 20 MWh) and will be remunerated by CAMMESA according to the regime chosen by each Project owner, among the following alternatives: (i) one hundred percent (100%) of the generated energy for a period of sixty (60) months; or (ii) twenty percent (20%) of the generated energy for: (a) a period of one hundred and twenty (120) months, or (b) one hundred and eighty (180) months, having the possibility to use the eighty percent (80%) left for self-consumption or purchases under the Spot market.

If the Project’s owner does not comply with the proposed investment once the established term has expired, an additional interest of ten percent (10%) will be applied on the remaining amount of the penalty accrued at the time the request was issued.

For additional information please contact Nicolás Eliaschev, Daiana Perrone, Rocío Valdez and/or Victoria Barrueco.