Corporate Renewable Energy Power Purchase Agreements

In 2015, Law No. 26,190 (as amended pursuant to Law No. 27,191 and its implementing regulations) established that Large Users — i.e., those whose average annual electricity demand is equal to or greater than 300kW— are required to source a minimum level of their electricity consumption from renewable sources, as per the relevant targets and dates, i.e. 8% by December 31, 2017 and 20% by December 31, 2025, in a sequential manner.

See New Renewable Energy Promotion Law and Regulation of the New Renewable Energy Promotion Law.

In 2016, the Government launched the RenovAr Program and so far, by means of Round 1 and Round 1.5, it has awarded 59 long-term PPAs for more than 2,400 MW. CAMMESA (the Government-administered company entrusted to manage the Wholesale Electricity Market) is the off-taker acting on behalf of Large Users and Distributors (“Joint Purchasing System”). At present, Round 2 of RenovAr Program is taking place, and a total amount of 1,200 MW of additional renewable capacity is expected to be awarded.

Corporate PPAs are not a new phenomenon in Argentina. To the contrary, the power regulatory framework in place since 1992 provides rules to encourage Large Users to enter into PPAs directly with power generators. However, PPA regulations in the past have only contemplated the existence of conventional sources (mostly thermal power stations).

Currently, by fostering renewable corporate PPAs, as well as co-generation and self-generation, the Government is trying to provide Large Users with an alternative to the Joint Purchasing System administered by CAMMESA.

The version in Spanish of the Regime is available at:
https://www.boletinoficial.gob.ar/#!DetalleNorma/169410/20170822

The following Regime’s features are worth considering, among others:

• marketing and administration charges applicable to Large Users that do not opt out of the Joint Purchasing System are established;
• as a general principle, generators and Large Users are authorized to negotiate the terms and conditions of their PPAs (establishing priorities, term, prices, etc.);
• a specific dispatch priority for the PPAs subject to the Regime is established within existing priority system for power from intermittent renewable resources;
• a public registry for renewable projects is created; and
• rules regarding RPS compliance are set out.