Argentina sets aside 300 MW for solar in its first auction

Yesterday, Argentinian President Mauricio Macri reinforced his commitment to renewable energy with the launch of the RenovAr program. One pillar of the program is the auction to acquire 1 GW from renewable energy sources, which is planned for June and which will be completed in September.

It was originally expected that wind would be the leading technology in this auction, and with 600 MW of capacity set aside, wind will be dominant. However solar PV has also been assigned 300 MW, while biomass is expected to deliver 65 MW, biogas 15 MW and small hydro 20 MW.

As the guidelines do not establish a reference price, it is assumed that it will be similar to the estimates provided by the Secretary of Energy, which assumes prices under US$100 per megawatt-hour (MWh).

One of the largest differences between the guidelines published and those which had been leaked until now is the the capacity which would be required of the installations and that they should be new construction. The published guidelines indicate that participating projects can be either new or existing generation. And while at first the criteria indicated that plants should be 10-40 MW in capacity, the request for proposals indicates that for both wind and solar, the minimum capacity is 1 MW and the maximum is 100 MW.

The term for execution of all of the projects is set at 730 days, which is in line with the previous requirement that these plans must be connected before the end of March 2018. Theres is an exception for PV projects with a point of connection to the 345 Kv Andes-Cobos line, which will have 900 days to begin supplying electricity to the grid.

Another point deals with the low degree of financial credibility which Argentina suffers from. The World Bank will guarantee obligations of renewable energy development bank FODER for contract payments to developers. In relation to this guarantee, Argentine regulators attached in an annex of the guidelines a letter or support from the World Bank.

The total amount of the World Bank guarantee will be assigned to the projects based on the contracted capacity at a rate of US$500,000 per megawatt. The cost of maintenance of the World Bank Guarantee will be assumed for each project based on the contracted capacity as well.

“We are one of the leading nations for the generation of solar and wind energy,” stated President Mauricio Macri in his auction presentation. “In addition to the estimated investment of around 2,000 dollars and the creation of up to 8,000 jobs, with this new capacity the Marci Administration aims to save 300 million dollars annually in reduced fuel imports for electricity generation, calculated at the current price of oil in the order of 50 dollars per barrel.”

“At the same time, our efforts will avoid the emission of nearly 2 million tons of CO2 to the atmosphere annually, which would be equivalent to the pollution from 900,000 vehicles.”

The price of the guarantee offered is to be paid in U.S. dollars, $50 per each megawatt of capacity offered and for a term of no less than 180 days, according to the regulations.

Translation by Christian Roselund. For the original in Spanish, please see the pv magazine Latinoamérica website.