Supply of electric energy from renewable sources

On October 15, 2009, Resolution No 712/2009 of the Energy Secretary (the “Resolution”) was published on the Official Gazette. This Resolution approved the contracts models (the “Contracts”) that must be celebrated between Compañía Administradora del Mercado Mayorista Eléctrico (“CAMMESA”) and the state-owned company Energía Argentina S.A. (“ENARSA”) for the electric energy supply coming from renewable sources that will be generated by the winners of ENARSA’s Tender No 1/09.

 

ENARSA’s Tender No 1/09 aims to contract up to 1015 MW of electric energy supply generated from renewable sources.
 
Also, the Resolution added Annex No 39 and replaced Annex No 40 on Proceedings for the Operation, Planning, the Charges Dispatch and the Prices Calculation (Procedimientos para la Operación, el Despacho de Cargas y el Cálculo de Precios - “The Proceedings”). The new Annex No 39 provides the guidelines for the generation of electric energy from renewable sources, excluded the wind and hydraulic power, while the new Annex No 40 provides these guidelines for wind power. These guidelines are issued in accordance with the Generation of Electric Energy from Renewable Sources Promotion Regime, created by Law No 26,190 and regulated by Decree No 532/2009 (see Marval News # 83) and with the Biofuel Regulation and Promotion Production Regime created by Law No 26,093 (see Marval News # 50) and regulated by Decree No 109/2007 (see Marval News # 58).
 

Regarding the Contracts, prior to their execution, ENARSA must fulfill some proceedings with the Energy Secretariat in order to obtain the approval of each offer for the generation of electric energy, which was intended to achieve a contract with CAMMESA.

Based on the assessment of the applications, the Energy Secretariat:

 

(i) will evaluate the convenience to contract the power generation availability and the linked electric energy,

 

(ii) will inform CAMMESA of those applications that were accepted, and

 

(iii) will send the draft of the contract’s text with its particular specifications. The main characteristics of the model for these Contracts are: 

 

a) The power supplied shall be generated only by the offered generators that result from requests for dispatch to CAMMESA and that were not forced by 
     generator’s request.

 

b) The term of the Contracts is 15 (fifteen) years, extendable for another 18 (eighteen) additional months, except in the cases of generation from biofuels.

 

c)  In the cases of electric energy generated from renewable sources different from biofuel, the Resolution does not provide a payment for power  availability. In these cases, the remuneration will be: a payment for the delivered electric energy, a management fee and a payment for some fixed  costs  (such as transport fees, expenses, taxes and others specifically foreseen). The price for the delivered electric energy will remain unvaried during all the term of the contract. 

 

d)  In the cases of electric energy from biofuels, the remuneration will cover both the power availability and the electric energy delivered. The price estimation for the delivered electric energy provides separate foresights for the variable generation cost (that will remain unvaried during the term of the contract) and for the cost of the fuel consumed per MWh (which cost may be reviewed from time to time by the Energy Secretariat). CAMMESA guarantees ENARSA an annual minimum purchase of delivered electric energy for an equivalent to 50% of the installed generating capacity. This guarantee is not foreseen for the cases of generation of electric energy from other sources. 

 

e) A bond is set to ensure the fulfillment of the obligations arising from the Contracts. This bond will be paid by CAMMESA, for up to a 20% limit of the future obligations assumed on each one of the Contracts.