Argentina PV Market New Opportunities. Marcelo Alvarez Argentina Renewable Energy Chamber

Transcription

1 Argentina PV Market New Opportunities Marcelo Alvarez Argentina Renewable Energy Chamber

2 SUMMARY State of the art of Argentina Electricity Matrix Renewable Energy Law Open Process: RenovAr -> PPAs Bids Demostration Projets of PV Distributed in Urban Areas: IRESUD I & II Distributed Renewable Energy Project law in National Congress Electrification by means of RE for rural dispersed population: PERMER Program (Financial support by WB) What s next?

3 NATIONAL ELECTRICAL SYSTEM STATUS Thermal Facilities with high downtime, low efficiency and high proportion of obsolete equipment burning any fuel inefficiently. The steam turbo (TV) park in our country has installed more than 2,000 MW with an age over 40 years since its installation, while more than 75% has exceeded its useful life. Distributed energy contracts very high cost Import of expensive fossil fuels, pre-paid and exempt from local taxes. The outflow of foreign exchange as a result of the import of fossil fuels is a major constraint to the growth of our economy.

4 THE IMMEDIATE FUTURE AND THEIR NEEDS The need to reduce foreign exchange outflow as a result of energy imports. Need to incorporate between 5000 and 7000 MW in the next four years. (Based on real GDP growth and replacement of thermal plants to be determined) Need to have immediately available additional power. The need to reduce the cost&price the current electric matrix. Need to generate more local jobs in the sector

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6 MW EVOLUTION OF INSTALLED CAPACITY Installed power Renovables NUC HI CC DI TG TV

7 NATIONAL RENEWABLE ENERGY LAW (27.191)

8 Improves and extends RE legal framework Sets mandatory RE targets to 2025 to all consumers and instructs the Ministry of Energy and Mines (MINEM) to set the necessary mechanisms to achieve the mandates Allows large consumers to source RE directly from IPPs, traders, utilities or self-consumption projects Introduces strong fiscal incentives to IPPs to reduce PPA prices Introduces important market and financial incentives for local supply chain building, however it does not set minimum local content rules Creates a sector specific trust fund (called FODER ) funded by public funds, specific consumer charges, and public offerings and which is designed to provide payment guarantees and project financing.

9 Incentive to Local Suppliers/Manufacturers FODER sector specific development credit line Import duties exception for equipment, parts and supplies Incentives to IPPs who purchase locally Larger integration of local content provides Priority Access to FODER project financing 20% Tax Credit on locally supplied CAPEX (subject to a minimum integration of 30% of project costs excluding civil works and others)

10 Argentina s Renewable Energy targets Law recently approved with high degree of support from all political parties Had >80% approval in both Senate and Lower Chamber of Congress Target of 20% of power demand in 2025 (from 8% in previous law, and 1.9% in 2015) * % of Power Consumed Capacity, GW Forecast ,0 10,0 8,0 6,0 4,0 2,0 0,0 1,9% 0,8 16% 12% 8% 3,6 18% 20% 6,3 7,1 7,9 8,6 9,410,110, Capacity Needed (GW) RE Target, % 30% 20% 10% 0% -10% -20% 10 * Estimated Additional Capacity. Source: AITPA based on Ministry of Energy and Mines MINEM June 2016

11 PPA BID OPEN PROCESS

12 Objectives & Benefits RenovAr 1 Public Call for Tenders MW worth of new Renewable Power Capacity => 1.500/2.000 million US$ direct investment Expected Benefits First Step towards the fulfillment of the 8% goal 1,8% => 4,5% New Jobs Annual Savings on Imported Fuels for Power Generation 300 million US$ Emission Control 2 million ton CO2/year (~ cars) 12 * Hydro projects up to 50MW are considered RE. MINEM June 2016

13 Requirements by Technology Wind Solar Biomass Biogas Mini Hydro Minimal Power Capacity Maximal Power Capacity Renewable resource measurement and/or availability Maximal Execution Term from PPA Signature (2) 1 MW 1 MW 1 MW 1 MW 0,5 MW 100 MW 100 MW 65 MW 15 MW 20 MW Minimum of 1 year worth of on-site resource measurement. Must provide an EPR certified by an Independent Consultant (1) Must provide an EPR certified by an Independent Consultant (1) Must provide certificate of source and sustainability of biomassic resource Must provide certificate of source and sustainability of biomassic resource Must provide certified EPR(1) and Energy Production Estimates 730 days 730 days 730 days 730 days 730 days (1) EPR or Energy Production Report means a briefing on the on site energy production capacity, which is to be certified by an Independent Consultant, who, in turn, must have a minimum of MW verifiable background experience on similar renewable energy projects (local or international). This report must be current (max. 3 months old) when the bids are submitted. (2) Except for Projects with interconnection points on the Andes-Cobos line (345 kv), which will have a term of 900 days from PPA signing. 13 MINEM June 2016

14 Extensive High Voltage Grid (>14k km) 1 HIGHEST SOLAR POTENTIAL NOA - CUYO 1 2 HIGHEST WIND POTENTIAL COMAHUE - PATAGONIA kv 330 kv 220 kv 150 kv 132 Kv 14 MINEM June 2016

15 Contents of Bid Submission Envelope A (Legal and Technical Project & Sponsor Information) General project description and technical details Bidders legal requirements Bidders financial and technical requirements Completed forms and details of requested applicable fiscal benefits Technical Project Requirements: (i) Project Memo, (ii) Site/Land Rights, (iii) EPR (iv) Technology used, (v) Environmental permits, (vi) License as Agente MEM, (vii) Access to transmission capacity, authorized by ENRE Envelope B (Economic Offer) Technology in which it competes Offered Price, expressed in US$ per MWh without VAT Offered Power Capacity (MW) Minimal Offered Power Capacity for partial award (MW) Guaranteed Energy (MWh/year) Minimum Guaranteed Energy (MWh/year) % Local Component (used as Tiebreaker) 15 MINEM June 2016

16 16 %20compartidos/Noticias/RenovAr/Mapa%20 Renovar.pdf

17 Programa de Formación de Líderes Energéticos 17

18 Programa de Formación de Líderes Energéticos 18

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22 Programa de Formación de Líderes Energéticos 22

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24 Demostration Projects IRESUD & IRESUD II Decentralized and distributed PV connected to the network

25 GENERAL OBJECTIVE: To promote the introduction into the country of technologies associated with interconnection to the power grid PV systems distributed in urban and peri-urban areas

26 Develop and promote promotion and regulation instruments Demonstrate the feasibility - Install and operate pilot systems *Public buildings *Housing (Federal Housing Plan) *Housing inside the country - Provide and sell electricity to the grid (on regulation) Develop in the country systems and components Install laboratories in C&T agencies Train human resources in organizations and companies

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28 NEXT STEPS Urban & Peri-Urban: - Several Law Projects presented at the National Congress *Feed in tariff vs net metering vs net billing. *Many provinces already have their own law for DRE (v.g. Salta, Santa Fe, Mendoza, San Juan among others) PERMER II: - Rural Dispersed population program by RE, mainly PV - 2 Million people without electricity service millón u$d Budget. Financial support by WB RenovAr 2: - Next round: Bid process starts Next August

29 THE ROLE OF CADER To help to accelerate adoption of RE to make the Process cheaper, quicker and more efficient As part of the upcoming auctions for PPAs: - Collaborate with the process *In future resolutions * In the geographical and technological distribution * In the evaluation methodology Mistakes to avoid: - Just concentrate demand at auctions, losing sight of the advantages of distributed energy model - Repeat voluntarist schemes - To lose time with unnecessary war between local & foreing manofacturers - Take a strict model of net billing with current rates - Not to include provinces in the process

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31 Regulatory Framework Acts # & % of Renewable Energy Goals Adapt and improve the regulatory framework in order to enhance the share of renewables in the country s power generation matrix. Establish national mandatory goals for 100% of the demand. Promote Technological and Geographical diversification in the sector s development. Create a Fiduciary Fund or Trust (FODER) to finance and guarantee investments. Introduce fiscal incentives for generation and local manufacturing projects Contracting Mechanisms Opt-Out Opt-Out PPAs Tender (Instructed by MINEM) Private PPAs with Major Users* Auto generation 100% of the 300 kw-or-less demand and Major Users who do not opt-out. Price determined thru Tenders Major Users >300 kw who exercise their right to opt-out. Annual Goals subject to penalties. Privately-negotiated Price and T&C 31 * With Private Generators, Power Distributors or Commercializers MINEM June 2016

32 Act N Fiscal Incentives Exemption of Import Duties for all projects starting construction prior to 12/31/2017 Accelerated Fiscal Depreciation of applicable assets Advance VAT Reimbursement paid on pre-cod purchases Exemption of Minimum Presumed Income Tax Exemption of Dividend Tax (subject to re-investment in infrastructure) Extension of Income Tax Loss Carry Forwards to 10 years (standard 5) Tax deduction of all financial expenses Tax Credit on locally supplied CAPEX (transferable to third party) MINEM will evaluate and approve the Access of the Project to the Incentives Regime The Incentives are larger on the first stage as means of encouraging the Projects to expedite COD 32 MINEM June 2016

33 Renewable Energy Program Elements of the Regulatory Framework Act D.R. 531 Res. 71 y 72 RenovAr Round 1 Senate -> 4Q 14 Lower Chamber -> 4Q 15 Presidential Decree -> 1Q 16 Ministry of E&M-> 2Q 16 CAMMESA -> 2Q MINEM June 2016

34 Act N RE Sector Specific Trust Fund FODER Treasury Funds Public Offerings ANSES (Pension Fund) Multilaterals / Climate Funds Project Finance Account Long Term Project Loans Loan Guarantees Interest Rate Subsidies Equity Contributions Specific Charge to Consumers Payment Guarantee Account Payment Guarantee (for all tendered PPAs) Termination Payment 34 MINEM June 2016

35 Tendered PPAs - Cash Flows Diagram Sponsors Debt Financing (Lenders) National Treasury Public Offerings Pension Funds Funding Sovereign Guarantee Argentinian State (MHyFP) Dividends Equit y Loan Renewable Energy Project Company Loan Repayment Loans & Loan Guarantees Payment & Termination Guarantee to PPA Renewable Energy Trust Fund (FODER) Solvency Guarantee (under negotiation) Multilateral Banks Climate Funds Guarantee Charge Physical Flow PPA Renewable Electricity through National Grid Electricity End Consumers PPA Monthly Payment of Electricity Bills Payments Funding Guarantees Off-taker (CAMMESA) Monthly Billing to End Users through DistCos 35 MINEM June 2016

36 Claim Mechanism before the WB 5. The FODER submits the claim of budget line to the Ministry of Economy and Public Finances FODER (Trustee: BICE) Ministry of Economy and Public Finances (Trustor: FODER) Representative of the National State 6. The Ministry of Economy and Public Finances does not have the funds 1. Cause for termination or sale of the project 4. Individuals or legal entities which have issued a project submit the claim to the FODER 7. The FODER does not pay the Sales Prices of the Project 10. Individuals or legal entities which have issued a project claim for the balance 11. National State pays to the WB 36 CAMMESA 2. Individuals or legal entities which have issued a project submit the claim to CAMMESA 3. CAMMESA cannot pay Project 8. Individuals or legal entities which have issued a project submit the claim to the WB* 9. The WB pays the eligible amount to the Project* * 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. MINEM June 2016

37 Transmission Grid and Interconnection Capacity CORRIDOR LIMITING CAPACITY (*) MAIN INTERCONECTION NODES (Tension in kv) Max (MW)* kv 330 kv 220 kv 150 kv 132 kv NOA BUE-LITORAL-NEA CENTRO CUYO COMAHUE PATAGONIA 600 MW 400 MW La Rioja (132) 120 La Rioja Sur (132) 100 Villa Quinteros (132) 100 ET Cobos (345) 400 El Bracho (220) 200 Cañada de Gomez (132) 100 Rojas (132) 150 Puerto Mineral (132) 100 Villa Mercedes - Rio IV (132) 130 San Luis (132) 100 Cruz de Piedra (132) 100 Jachal - Punta de Rieles (132) 80 El Sosneado (132) 60 Cañada Honda (132) 100 ET Chocon (500) 300 Alicurá (132) 30 Puelches (132) 30 Bahia Blanca (132) 300 Santa Cruz Norte (132) 130 Rio Santa Cruz (132) 50 Puerto Madryn (132) 50 Futaleufú Madryn (330) *To be confirmed in definite version of bid documents. MINEM June 2016

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