Argentina to authorize private PPAs between large power consumers and renewable energy producers

Argentina’s Ministry of Energy and Mines has published the draft of the new rules for private PPAs between large energy consumers and renewable energy power producers. The new regulation, named “Proyecto de Resolución de Mercado a Término de Energía Eléctrica de Fuentes Renovables”, implements the provisions established by the country’s renewable energy law (Ley N° 27.191) promulgated in 2015.

The law establishes that at least 8% of the power demand must be covered by renewables by 2018.

If introduced, the new provisions would represent an interesting change for the Argentinean electricity market, as the sale of renewable energy power is currently allowed only to the administrator of the wholesale electricity market Compañía Administradora del Mercado Eléctrico Mayorista (Cammesa).

The new contracts will have to be made by direct agreement between the large power consumer and the renewable energy producer or through joint purchase schemes managed by Cammesa.

The new possibilities offered by the new rules will add to those offered by the public auctions for renewable energy projects held by the Argentinean government.

In the two tenders held last year, the country’s Ministry of Energy and Mines selected 59 projects with a combined capacity of 2,423 MW. Overall, 916 MW of solar projects were awarded through the two bidding rounds.

Round 2 of the RenovAr program is expected to be launched by May of this year. Through this round, the Argentinean government expects to allocate around 1.5 GW and 2 GW of renewable energy generation capacity.

Currently, renewables represent 1.8% of the energy mix in Argentina. The country has set an objective of having renewables make up 20% of its energy mix by 2025.