The Secretary of Energy has opened a new tender seeking companies to build new power generation facilities totaling 620 MW.

By Resolution No. 36/2023 (“Resolution 36”), issued by the Secretary of Energy on February 2, 2023, the main rules applicable to such tender (“RenMDI”) have been approved.

RenMDI follows Resolution No. 330/2022 of the Secretary of Energy (“Resolution 330”), that called for expressions of interest (“MDI”, for its Spanish acronym, Manifestaciones de Interés) in connection with infrastructure projects that would allow the incorporation of renewable generation and/or energy storage facilities interconnected to medium-voltage transmission and/or distribution facilities. For additional information regarding Resolution 330, please visit this article published on our website.

Under the MDI, according to Resolution 36, 491 proposals were received, totaling 14,400 MW.

Moreover, RenMDI intends to continue increasing the share of renewable energy in Argentina, as mandated by Law No. 26,190 (as amended by Law No. 27,191), and implemented through successive renewable tendering processes.

Below are the key takeaways of Resolution 36.

I. Executive summary

  1. RenMDI calls for interested parties to submit offers in order to enter a PPA with the Wholesale Market Administrator Company (“CAMMESA”), who will act as offtaker on behalf of the Distributors and Large Users of the Wholesale Electricity Market (“WEM”).
  2. Such PPA will have a tenor of 15 years as of commercial operation date (“COD”) and will be hard currency-denominated, payable in pesos at a customary exchange rate.
  3. RenMDI includes two lines: (i) Line 1 of renewable generation to replace forced generation, for biomass, solar photovoltaic, solar photovoltaic with storage and wind with storage (“Line 1”); and (ii) Line 2 of renewable generation to diversify the power matrix, for biogas, landfill biogas, Small Hydroelectric Developments (PAH) and biomass technologies (“Line 2”).
  4. The goal is to contract 500 MW for Line 1 and 120 MW for Line 2, thus totaling 620 MW.
  5. No payment guarantees and/or other type of guarantees from FODER are foreseen (as defined in section V).

II. Deadlines

Bidders may submit any requests for additional information or clarifications until February 24, 2023. In turn, March 1 is the date for CAMMESA to respond to any such requests.

March 15, 2023 is the deadline for bid submissions.

Selection of winners is scheduled for May 24, 2023 and the PPAs are expected to be entered no later than September 20, 2023.

III. Bidding Terms and Conditions – Most relevant Terms

Resolution 36 approves the Request for Proposals as Annex thereto (the “RfQ”), that foresees the terms and conditions to be complied by any bidder under the RenMDI.

Under the RfQ, as said before, two separate lines (please see above) are foreseen, with different technologies foreseen in each case.

Biomass projects submitted and not awarded under Line 1 will be added to the biomass projects submitted exclusively for Line 2.

Finally, bidders must submit, together with their bid, a bidding guarantee in accordance with the terms of the BTC.

IV. Terms of the PPA

The successful bidders will enter into a power purchase agreement with CAMMESA (“PPA”).

The PPA will have a term of 15 years following COD.

The price of the PPA will be fixed in U.S. dollars per Megawatt/hour and seasonality will be remunerated to encourage generation in periods of high demand.

V. Additional Matters – Differences with Prior Tenders

Power generation facilities awarded under the RenMDI will not have dispatch priority with respect to other renewable generation, self-generation or cogeneration facilities operating in the WEM in case of curtailment, except for those cases specifically provided in the RfQ.

Expansions of existing facilities (a) (A) under RenovAr 1, 1.5, 2 and 3, (B) Resolution No. 202/2016 of the former Ministry of Energy and Mining, and Resolutions No. 220/2007, 712/2000 and 108/2011 of the former Secretary of Energy, or (b) that have obtained dispatch priority in the corporate renewable term market, will not be eligible under the RenMDI.

In addition, and unlike other previous tenders, no payment guarantees by the Fund for the Development of Renewable Energies (“FODER”, for its Spanish acronym, Fondo para el Desarrollo de Energías Renovables) is foreseen for RenMDI projects.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, Daiana Perrone, María Eugenia Muñoz, Pablo Arrascaeta, Florencia Martínez, Luciana Tapia Rattaro and/or Rocío Valdez.