RENEWABLE ENERGY IN ARGENTINA Opportunities, Challenges, Actions March, 2017 Juan J. Aranguren Minister of Energy and Mining
10-YEAR PROJECTION Planned Capital Investment in the Power Sector (in billion USD) Renewables 15.0 +10 GW 15 Bill USD Hydroelectricity 10.2 +3 GW Nuclear 6.0 +1 GW Thermoelectricity Transmission 4.8 5.0 +6 GW >5k km Demand 2015 135 TWh Demand 2025 170 TWh
% of the total power demand RENEWABLE ENERGY NATIONAL TARGETS 2018-2025 3 GW 10 GW Existing + Actions 2016 9 % RenovAr Round 1.0 1.1 GW 2.7% RenovAr Round 1.5 1.2 GW 3.0% Legacy Contracts (R202) 0.5 GW 1.5% Existing 0.8 GW 1.8% Note: Percentage of RE in total demand calculated using P75 generation estimates and 2018 projected demand.
RENEWABLE ENERGY IN ARGENTINA NATIONAL LEGAL FRAMEWORK FOR RENEWABLE ELECTRICITY
THE NEW REGULATORY FRAMEWORK Mandatory Targets 8% @ 2017-18 16% @ 2021 20% @ 2025 Resource Diversification Geographical and Technological New Utility-Scale RE Framework Law 27.191 Fiscal Incentives Applicable to IPPs and Local Manufacturers FODER Public Trust Fund for Guarantees and Financing
RENEWABLE ENERGY PROGRAM 2016-2025 Regulatory Framework Elements Law 27,191 Senate 4Q 14 (94% positive vote) Lower Chamber 4Q 15 (93% positive vote) Decrees 531 y 882 Presidential Decree 1S 16 Res. 71, 72, 123, 1/E y 136 Ministry of E&M 1S 16 Res. 252 Call for Tender 2S 16 RenovAr Round 1 + 1.5 CAMMESA 2S 16
Opt-Out Opt-Out RE MARKETS 3 Contracting Mechanisms PPAs Tenders (instructed by MINEM) 100% of the 300 kw-or-less demand and Large Users who do not opt-out. Price determined through Tenders 100% of RE Mandate Private PPAs for Large Users Large Users (>300 kw) who exercise their right to opt-out and purchase directly from IPPs and/or traders, or self-generate their mandated quota. Self Generation Annual Goals subject to penalties. Price and other T&Cs freely negotiated.
RENEWABLE ENERGY IN ARGENTINA RenovAr Program Round 1
RENOVAR ROUND 1 Objectives 1,000 MW 20-year Agreements Objectives Direct Investment 1.5 / 1.8 Billion USD First Step towards the fulfillment of the 8% goal 1.9% => 4.5% (2018) Expected Benefits New Jobs 5,000-8,000 Annual Savings on Imported Fuels for Power Generation US$ 300 million Emission Reductions 2 million ton CO2/year avoided (equivalent to ~ 900,000 cars)
GUARANTEE MECHANISM 2 Contracts 3 Levels of Guarantee CONTRACTS Power Purchase 1 Agreement Energy Sales 2 FODER Trust Adhesion Agreement Energy Payment and Early Termination Guarantees GUARANTEE 1 FODER Guarantee 2 Sovereign Guarantee 3 World Bank Guarantee Energy Payment Termination Payment 1 Termination Payment 2
LIQUIDITY GUARANTEE 1 Energy Payment Guarantee 7. FODER seeks repayment from CAMMESA after having made a Energy Guarantee Payment on its behalf Physical Flow PPA Payments 4. CAMMESA pays IPP on a monthly basis under PPA (#) IPP (Seller) 5. IPP Issues a claim to FODER for late or non-payment of Energy under PPA 6. FODER pays IPP under Energy Payment Guarantee 1. IPP Injects Renewable Electricity into National Grid Renewable Energy Trust Fund (FODER) Guarantees 8. Ministry of Energy & Mining funds FODER with new budget appropriation and/or by increasing the Guarantee Charge to eligible end users (*) CAMMESA (Off-taker) 2. CAMMESA bills end consumers on a monthly basis through DistCos or directly through large users Electricity End Consumers 3. Consumers pay on a monthly basis through DistCos or directly in case of major users (*) To replenish FODER so that it always holds 12 months worth of eligible PPA payments as liquid reserve (#) CAMMESA coordinates efforts with FODER on a monthly basis in order to ensure that all payments are covered in full on due date
SOLVENCY GUARENTEE (TERMINATION) 2 Termination Payment Guarantee via Treasury Bills 3 The World Bank 5. The FODER submits a claim for needed budget to the Ministry of Energy and Mining / Ministry of Finance and Treasury in exchange of the treasury bills, kept in guarantee MINEM / MINHYF Representatives of the National State CAMMESA (Offtaker) Renewable Energy Trust Fund (FODER) (Trustee: BICE) 4. Cause for Sale of Project occurs. IPP submits the claim for payment of the Project Put Price to the FODER 1. Cause for early termination occurs 2. IPP notifies CAMMESA IPP (Seller) 6. MINEM / MINHyF does not have the funds in full or at all 7. The FODER does not pay to the IPP the Project Sales Price or pays partially 10. IPP claims for the balance to the FODER Trustor 8. IPP submits the claim to the WB (*) 11. National State pays to the WB the amount due under the Indemnity Agreement 3. PPA is terminated, IPP is free to sell to thrid party or spot market 9. The WB pays the eligible amount to the IPP (*) (*) The FODER grants individuals and legal entities which have issued projects the irrevocable right to directly submit claims before the World Bank in certain cases and to receive payments from the World Bank.
BIDS GEOGRAPHICAL DISTRIBUTION (SEP. 5, 2016) Number of bids received: 123 6,343MW BIDS: 49 MW: 3,468 BIDS: 58 MW: 2,811 WIND SOLAR Provinces that participate: Buenos Aires, Chubut, Río Negro, Santa Cruz, Neuquén, La Rioja, La Pampa, Mendoza, Córdoba and Santa Fé Provinces that participate: Salta, San Juan, Jujuy, Catamarca, San Luis, La Rioja, Mendoza, Neuquén, La Pampa, Córdoba, Buenos Aires and Chaco BIDS: 11 MW: 53 BIO Provinces that participate: Entre Ríos, Corrientes, Córdoba, Tucumán, Santa Fé, Misiones and San Luis BIDS: 5 MW: 11 SMALL HYDRO Provinces that participate: Río Negro and Mendoza
PROJECTS AWARDED AT OFFERED PRICE (OCT. 14, 2016) Number of awarded projects: 29 Technology Projects MW GWh/year Province Wind 12 707 2,882 Buenos Aires, Chubut, Río Negro, Santa Cruz, Neuquén and La Rioja Solar 4 400 918 Salta and Jujuy Biogas 6 9 70 Santa Fe, San Luis and Córdoba Biomass 2 15 122 Corrientes and Misiones PAH 5 11 68 Río Negro and Mendoza Total 29 1,142 4,060 14 Province
Awarded Price (US$/MWh) ENAT / SEG / OTAMENDI / NUEVO CERRO DRAGÓN ROUND 1 - WIND PROJECTS AWARDED WIND 80 70 60 50 49.1 49.8 53.9 55.0 57.0 58.0 59.0 59.4 61.5 62.9 66.0 67.2 40 30 20 10 0 Vientos del Secano (50) García del Rió (10) Los Meandros (75) Villalonga (50) Cerro Alto (50) Corti (100) Garayalde (24.15) Kosten (24) La Castellana (99) Vientos Los Hércules (97.2) Chubut Arauco II Norte (28.35) (Etapa 1 y 2) (99.75) Note: Figure in parenthesis represents awarded power capacity in MW for each project.
Awarded Price (US$/MWh) ROUND 1 - SOLAR PV PROJECTS AWARDED Solar PV 80 70 60 50 40 30 20 10 0 59.0 60.0 60.0 60.0 P.S. La Puna (100) P.S. Cauchari 1 (100) P.S. Cauchari 2 (100) P.S. Cauchari 3 (100) Note: Figure in parenthesis represents awarded power capacity in MW for each project.
Awarded Price (US$/MWh) PATAGONIA ENERGÍA S.A. FAMILIA LUCENA BIOMASS CROP S.A. BIOMASS CROP S.A. MARTÍN ALFREDO NACARATO FERSI S.A. COOP. LIMITADA DE ELECTRICIDAD Y SERVICIOS ANEXO DE HUINCA RENANCÓ ROUND 1 - BIO AND SMALL HYDRO PROJECTS AWARDED 160 140 120 100 80 60 40 20 0 P.A.H. Canal Cacique Guaymallén - Salto 8 (1.2) P.A.H. Canal Cacique Guaymallén - Salto 6 (1.01) P.A.H. Dique Tiburcio Benegas (1.65) P.A.H. Triple Salto Unificado (0.51) P.A.H. Rio Escondido (7) C.T. Generación Biomasa Santa Rosa (12.5) C.T. Pincó Eco (2) C.T. Río Cuarto 1 (2) C.T. Río Cuarto 2 (1.2) C.T. Yanquetruz (1.2) C.T. San Pedro Verde (1.42) C.T. Huinca Renancó (1.62) C.T. Biogás Ricardone * (1.2) SMALL HYDRO BIOMASS BIOGAS *Awarded price, the rest of the Projects, having bidded a price over the maximum applicable for each technology agreed to cut down their offered price to this last value when invited to do so by CAMMESA. Note: Figure in parenthesis represents awarded power capacity in MW for each project.
ROUND 1 ECONOMIC IMPACT USD / MWh (Average) Savings in billon USD/ 1.000 MW 2015 150 NOMINAL ~5.5 2016 59 PV8 ~2.5
RENEWABLE ENERGY IN ARGENTINA RenovAr Program Round 1.5
ROUND 1.5 WIND QUOTA BUENOS AIRES 100 MW COMAHUE 100 MW PATAGONIA 100 MW REST OF THE COUNTRY 100 MW REGION Maximum Price 59.39 USD/MWh NUMBER OF PROJECTS CAPACITY (MW) Buenos Aires 8 680 Comahue 3 187 Rest of Country 3 193 Patagonia 5 497 TOTAL 19 1,557
ROUND 1.5 SOLAR PV QUOTA NOA 100 MW RESTO OF THE COUNTRY 100 MW REGION Maximum Price 59.75 USD/MWh NUMBER OF PROJECTS CAPACITY (MW) NOA 9 394 Rest of Country 19 531 TOTAL 28 (*) 925 (*) Bids SFV-03 and SFV-25 were discarded due to formal issues in their respective envelope B.
ROUND 1.5 TECHNOLOGY REGION NUMBER OF PROJECTS POWER CAPACITY (MW) MINIMUN PRICE (USD/MWh) OFFERED AVERAGE PRICE (USD/MWh) WIND Max. Price 59.39 USD/MWh BUENOS AIRES 8 680 46.00 53.73 COMAHUE 3 187 49.98 55.02 PATAGONIA 5 497 49.50 53.47 REST OF THE COUNTRY 3 1,993 55.00 56.91 WIND TOTAL 19 1,557 46.00 54.20 SOLAR Max. Price 59.75 USD/MWh NOA 9 394 51.93 56.58 REST OF THE COUNTRY 17 494 48.00 55.61 SOLAR TOTAL 26 888 48.00 56.04 Total 45 2,445 46.00 54.87
Precio Adjudicado (USD/MWh) GOLDEN PEAK LAT /SINOHYDRO CORP. / CELTA / VIENTOS DEL SUDESTE / COMPAÑIA GRAL DE PROYECTOS PETROQUIMICA COMODORO RIVADAVIA FACUNDO FRAVEGA / LUCIANO GONZÁLEZ LOBO SELENA PARTNERS SELENA PARTNERS ROUND 1.5: WIND PROJECTS AWARDED WIND 70,0 60,0 50,0 40,0 30,0 20,0 10,0 0,0 46.0 P.E. Pampa (100) 49.5 50.0 P.E. Del Bicentenario (100) P.E. La Banderita (37) Note: Figure in parenthesis represents awarded power capacity in MW for each project. 53.5 54.9 55.0 55.5 56.4 56.7 59.4 P.E. Loma blanca 6 (100) P.E. Pomona I (100) P.E. El Sosneado (50) P.E. Vientos de Necochea (38) P.E. Miramar (98) P.E. Arauco II (Etapa 3 y 4) (95) P.E. Achiras (48)
Awarded Price (US$/MWh) ROUND 1.5: SOLAR PV PROJECTS AWARDED SOLAR PV NOA REGION 60 50 40 30 20 10 51.9 53.4 53.7 56.3 56.4 0 P.S. SAUJIL (23) P.S. TINOGASTA (15) P.S. FIAMBALÁ (11) P.S. CAFAYATE (80) P.S. NONOGASTA (35) Note: Figure in parenthesis represents awarded power capacity in MW for each project.
Awarded Price (US$/MWh) Colway 08 Industrial S.L. / ILDEFONSO GUILLERMO CLAVIJO / FERNANDO ÁNGEL MARESCA QUAATRO PARTICIPACOES S.A. ROUND 1.5: SOLAR PV PROJECTS AWARDED SOLAR PV NOA REGION 60 50 40 30 20 10 0 48.0 P.S. ANCHORIS (21) 52.0 53.0 53.7 54.1 55.0 55.0 55.0 55.0 55.2 56.5 56.7 57.6 58.9 59.2 P.S. PASIP (1) P.S. P.S. ULLUM SARMIENTO N1 (25) (35) P.S. IGLESIA - GUAÑIZULI (80) P.S. LAVALLE (18) Note: Figure in parenthesis represents awarded power capacity in MW for each project. P.S. LUJAN DE CUYO (22) P.S. LA PAZ (14) P.S. P.S. ULLUM GENERAL N2 (25) ALVEAR (18) P.S. ULLUM 4 (14) P.S. LA CUMBRE (22) P.S. ULLUM3 (32) P.S. CALDENES DEL OESTE (25) P.S. LAS LOMITAS (2)
ROUND 1.5 - AWARDED PROJECTS TECHNOLOGY NUMBER OF PROJECTS AWARDED POWER CAPACITY (MW) AVERAGE AWARDED PRICE (US$/MWh) ANNUAL ENERGY PRODUCTION (GWh/YEAR) WIND 10 765.4 53.34 3,037 SOLAR 20 516.2 54.94 1,274 Total 30 1,281.5 53.98 4,311
RENOVAR SUMMARY - 59 awarded projects (22 wind projects, 24 solar projects, 2 biomass projects, 6 biogas projects, 5 small hydro projects) - 17 participating provinces - 12 to 30 month term to set the Commercial Operation Date - 2,423 MW of new capacity - 9 TWh/year of renewable energy - 20,000 new jobs - 4 billion dollars from private investment - 4 millions of homes with electricity - 5 millions of tons of CO2 in savings, equal to 2 millions of cars Compliance of the first target set forth in Act 27,191 (8 % of the country s total energy from renewable sources by 2018)
IN PROGRESS ITEMS OF THE NATIONAL AND INTERNATIONAL OPEN CALL FOR TENDERS PPAs signatures Trust Adhesion Agreements within the framework of RenvAr Program and Resolution 202 passed by the Ministry of Energy and Mining Detailed regulation on PPAs between Large Users and IPPs Regulation on distributed generation of renewable energy (national act) and on low power solar thermal energy (national act) COMPLETED BY (Estimate) Round 1: May 2017 Round 1.5: May 2017 First semester 2017 Second semester 2017 RenovAr Round 2 Second semester 2017
Undersecretariat of Renewable Energy Ministry of Energy and Mining Argentine Republic Paseo Colón 189 Piso 9 Tel. (+54-11) 4349-8033/8186 privadarenovables@minem.gob.ar Documents available at: www.cammesa.com.ar and www.minem.gob.ar