In the past few months, certain regulations have been adopted by the Secretary of Energy (“SE”) dealing with renewables and natural gas transport.

Below is a brief summary of such resolutions.

1. New conditions for termination and amendment of PPA under the RenovAr Program

On December 27th, 2021, the SE issued the Resolution No. 1260/2021 (the “Resolution 1260”), which provide opportunities for projects companies to terminate or amend power purchase agreements executed under the RenovAr Program (“PPA”).

The goal of Resolution 1260 is, on one hand, to facilitate exit for projects which have not been built, in order to regain transmission capacity. This should enable additional transmission capacity to be freed-up for the corporate PPA market.

On the other hand, Resolution 1260 allows project companies to request an extension of three hundred and sixty-five days to reach the commercial operation date (“COD”), subject to the fulfilment of certain requirements (such as a reduction of both supply period and price).

2. Amendments to regulations in the Renewable Energy Term Market (Corporate PPA Market)

On January 21st, 2022, the SE issued Resolution No. 14/2022 (“Resolution 14”) which amends certain regulations applicable to the Renewable Energy Term Market established by Resolution No. 281/2017 as amended.

Essentially, Resolution 14:

  • Simplifies the tie-break mechanism for dispatch priority awarding by removing tie-break for commercial operation term, dispatch factor, tax benefits and toss. Resolution 14 adds the submission of a Magnification Factor successively until tie-break is reached as only requirement and proceeding.
  • Establishes restrictions for those projects which do not comply with the payment of dispatch priority maintenance charges or with terms proposed for COD.

This regulation is regarded as a way of further accelerating development in the corporate PPA market which currently has projects under commercial operation for nearly 900 MW and projects approved during 2021 for an additional 467 MW and a strong interest of large consumers in expanding electricity procurement needs from renewables.

3. Expansion of the Natural Gas Transport System

On February 9th, 2022, the SE enacted Resolution No. 67/2022 (“Resolution 67”), which creates the “Transport.Ar National Production” program (“Transport.Ar Program”) for the construction and expansion of several natural gas pipelines, including new facilities as well as upgrades of existing facilities.

Resolution 67 entrusts the state-owned company Integración Energética Argentina S.A. (“IEASA”) with the construction and expansion of the pipelines indicated therein, which may be executed by IEASA itself or awarded to other companies.

Strong priority is given to the construction of a new pipeline which would enable to significantly expand transport capacity from the Vaca Muerta reservoir.

Further details regarding construction and funding of this infrastructure are pending and expected to be known soon.

 

For further information, please contact either Nicolás Eliaschev or Tomás Villaflor.