On Thursday September 24, Argentina’s Chamber of Deputies approved a new renewable energy law, which calls for the nation to get 8% of its electricity from renewables in 2017 and 20% in 2025.
One of the new measures introduced is the establishment of a fund for the development of renewable energy. This will be funded with at least 50% of the cash savings resulting from shifting from liquid fuels to renewables, which is estimated to be about US$41 billion by 2025.
The law also establishes an obligation for energy users whose demand exceeds 300 kW to follow the renewable energy obligation set by law. In this was, 1% of the energy consumed by large energy users must be renewable in the first month the law enters into force, to increase by 1% each month until it reaches 8% in 2017.
The measure is intended to involve large consumers of energy to renewable energy into the market directly or by building their own projects.
Among the promotional measures planned are an anticipated decrease of Value Added Tax (VAT) in the form of an exemption on import duties on capital goods and equipment until 2017, as well as various other taxes. The law also allows for the granting of a tax certificate for projects with a large portion of local content.
The law sets a limit for contract prices at $113/MWh. This price can be modified two years after the law takes effect, but only for new contracts.
Known as Gingle’s Law, in honor of the senator who introduced it, the legislation must now go through the regulatory process before taking effect.
Translation and additional reporting by Christian Roselund