New resolution of the Ministry of Environment and Sustainable Development
On November 14, 2022, Resolution 503/2022 of the Ministry of Environment and Sustainable Development (hereinafter, "Resolution 503" and "the Ministry", respectively) was published. This Resolution established the guidelines and minimum contents of the plans for the reconversion of the productive processes that use mercury.
I.- Legal Background
Prior to the entry into force of the Resolution, the regulation in Argentina was governed by: (i) the Minamata Convention on Mercury (the "Convention") and (ii) Resolution No. 299/2021.
The Convention regulates the use of mercury in production processes and the manufacture of mercury-added products and its exceptions and exemptions. In terms of exemptions, Argentina has two registered exemptions, for the production process of chlor-alkali and the manufacture of mercury thermometers.
Resolution No. 299/2021 established the guidelines for the management of elemental mercury, and its mixtures and compounds, as well as mercury-added products. This resolution established the procedure for requesting exemptions for the production process of chlor-alkali or the manufacture of mercury thermometers exclusively. It also established the need to submit a productive process reconversion plan as one of the requirements to obtain the exemption.
II.- Resolution No. 503/2022
Scope:
The Resolution seeks to establish the guidelines for the reconversion plans and to comply with the environmentally rational management of mercury, under the obligations arising from the Convention. Accordingly, it defines the " Reconversion Plan" as the schedule of activities to be carried out in an industrial establishment that uses mercury in its production or manufacturing process, aimed at the replacement and implementation of mercury-free technology.
For the drafting and filing of the Reconversion Plan, the following information must be included, at least:
- (a) Location of the facility.
- (b) Identification of the personnel involved and responsible for the conversion tasks.
- (c) Technical report and description of the technology currently used.
- (d) Technical report and description of the technology to be used for the reconversion.
- (e) Description of waste management, including storage, transportation, final disposal, treatment, labeling, and disposal.
- (f) Evaluation of environmental, social, and economic impacts.
- (g) Work schedule with a framework of all the stages of the proposed reclamation and the monitoring for its compliance, including the safety measures and contingency plans for the execution of the activities.
Enforcement Authority:
The Enforcement Authority of the Resolution is the Secretariat of Environmental Control and Monitoring of the Ministry of Environment and Sustainable Development. As enforcement authority, it may carry out inspections of industrial establishments and request the information and documentation it deems necessary to ensure compliance with the Resolution.
The National Directorate of Hazardous Substances and Waste is the competent authority to evaluate, approve and monitor compliance with the plans for the reconversion of production processes that use mercury.
Approval:
The Reconversion Plan must be submitted to the National Directorate of Hazardous Substances and Waste for approval. The Reconversion Plan will be approved together with the requested exemption according to Resolution MAyDS No. 299/21. Upon approval of the Reconversion Plan, a Certificate of Compliance of the Reconversion Plan under the Minamata Convention on Mercury will be issued, in accordance with the Resolution's Sec. 4.
The Resolution establishes as a prior condition for the approval of the Reclamation Plan that: (i) the Annual Environmental Certificate must be in force and (ii) the provisions of Law No. 24,051 and its Regulatory Decree 831 of April 23, 1993, and complementary regulations must be complied with.
Non-compliance:
In case of non-compliance with the obligations assumed in the Reconversion Plan, and once the term of the notice of compliance has expired, the approval of the reconversion plan will automatically expire thus generating the loss of the exemption regime and all the benefits obtained by the owner of the establishment due to its compliance with this regime.
The Resolution became effective as from 11/14/2022.
For further information or questions on these issues, please contact Dolores Reyes, Pablo Arrascaeta, and/or Marcos Moreno Hueyo.
Modifications to the Environmental Management System (EMS) regulations for agents of the Wholesale Electricity Market
On November 7, 2022, Resolution 558/2022 of the Ente Nacional Regulador de la Electricidad (hereinafter, "Resolution 558" and "ENRE", respectively) was published. The aim of this Resolution is to create new obligations related to environmental management for generating agents, self-generators, co-generators, transporters of electricity in high voltage, by trunk distribution, international interconnection, and distributors of electricity under federal jurisdiction of the Wholesale Electricity Market ("MEM"), all of them, hereinafter, the "Agents".
Resolution 558 also repealed numerous resolutions that established obligations related to environmental management and the submission of information.
i. The new obligations established by Resolution 558
Under Resolution 558, Agents must prepare, implement, and certify an Environmental Management System ("EMS") for the facilities under their responsibility. Likewise, the Agents' Environmental Plans must comply with the guidelines and requirements established in the resolution.
Failure to comply with the obligations set forth in Resolution 558 shall subject the Agents to the sanctions and penalties set forth in the respective Concession Agreements or in Article 77 of Law No. 24,065 (such as fines, disqualification, suspension, etc.), as applicable.
ii. Incorporation of alternative mechanisms for compliance with certain obligations derived from Resolution 558
Resolution 558 also establishes two alternative procedures, depending on the type of Agent involved, for compliance with certain obligations
Firstly, Resolution 558 provides an alternative procedure for the following agents (i) responsible for photovoltaic solar parks or solar thermoelectric power plants, whose facilities have an Environmental Complexity Level (hereinafter, "ECL") lower than 14.5 points; (ii) Agents responsible for wind farms, whose facilities have an ECL lower than 14.5 points; (iii) Agents responsible for thermal power plants with an installed capacity of less than or equal to 2 MW, consisting of a unit or combination of generation units equipped with internal combustion engines or gas turbines, which consume any type of fuel and whose facilities have an ECL of less than 14.5 points; (iv) Agents responsible for thermal power plants larger than 2 MW and less than or equal to 50 MW of installed power.
Secondly, Resolution 558 creates an alternative procedure for Agents responsible for hydroelectric exploitation of public watercourses when the normal power to be granted exceeds 500 kV.
iii. Additional remarks
As an additional aspect, Resolution 558 delegates to the head of the Public and Environmental Safety Area ("ASPA") of the ENRE the necessary powers for the effective implementation of this resolution.
For further information, please contact either Nicolás Eliaschev, María Eugenia Muñoz, Pablo Arrascaeta y/o Luciana Tapia Rattaro.
EOI request for renewable energy and storage infrastructure projects
On May 9th, 2022, Resolution 330/2022 (“Resolution 330”) was published in the Official Gazette. This resolution launched an EOI request for development of certain energy projects which include renewables and, for the first-time at the utility scale level, storage.
1. Context and importance
The goal stated by Resolution 330 is to contribute to improve sustainability and reliability in the electricity sector within the Paris Agreement and local renewable portfolio standards which further implies:
- A ratification of the commitment by the Republic of Argentina towards fighting climate change and the promoting renewables.
- The first-time that storage is considered as a technology solution at the utility scale level. While preliminary and too early in the process this has game-changing potential.
2. EOI scope
The EOI includes two main types of projects:
- Renewables
- Battery installation and/or other storage systems in renewable power plants and/or at transmission interconnection points or distribution networks that improve operational management and reduce forced generation.
The EOI does not require an interested party to be an existing player in the Argentine power market to submit a proposal.
3. Formalities
The EOI presentation must be filed digitally by June 30th, 2022. The presentation must be sent to an email to be timely informed by CAMMESA (the Argentinean ISO).
Also, the EOI must include the following information:
- Address, telephone, email, and contact person.
- Brief description of the interested party. Background in similar projects if any.
- Description of the preliminary project, including technology, capacity, location, interconnection point, biomass fuel (if applicable) and any other relevant information.
- Indicative cost and compensation.
For further information, please contact either Nicolás Eliaschev, Tomás Villaflor or Luciana Tapia Rattaro.
Expansion of Natural Gas Transport Capacity
On February 14th, 2022, Decree No. 76/2022 (“Decree 76”) was published in the Official Gazzette. The aim of the Decree is to regulate the “Transport.Ar National Production” Program (“Transport.Ar Program”) for the construction and expansion of several natural gas pipelines established by the Secretary of Energy through Resolution No. 67/2022 (“Resolution 67”).
Pursuant to its provisions, Decree 76:
- Entrusts the state-owned company Integración Energética Argentina S.A. (“IEASA”) to build and operate and new pipeline which would enable to expand of transport capacity from the Vaca Muerta reservoir.
- Regulates the Transport.Ar Program established by Resolution 67.
- Incorporates a trust fund -Argentine Gas Development Fund (“FONDESGAS”, for its acronym in Spanish)- to manage investments and raise debt to fund the works.
1. IEASA transport concession
Decree 76 grants a hydrocarbon transport concession to IEASA concerning a new natural gas pipeline to be built which would enable to significantly expand transport capacity from the Vaca Muerta reservoir (the “Pipeline”).
The concession is granted for a period of thirty-five (35) years, which may be extended according to current regulations.
Additionally, the rates related to the transport capacity agreed regarding the Pipeline will be determined by Gas Regulatory Authority (“ENARGAS” for its acronym in Spanish).
However, to achieve the construction of the gas pipeline expansion, the Decree also allows IEASA to execute any contract related to the transport capacity with producers or users. The rates of those contracts will not be regulated by ENARGAS.
2. Transport Capacity Priority
The Decree 76 awards priority for the resulting expanded transport capacity to the partially state-owned company Yacimientos Petrolíferos Fiscales S.A. (“YPF”).
Nonetheless, regarding the non-contracted transport capacity, IEASA must provide access to third parties.
3. Incorporation of FONDESGAS
To manage investments under the Transport.Ar Program, the Decree 76 creates the Argentine Gas Development Fund (FONDESGAS). The fund is entitled to issue debt instruments and participation certificates to fund the Pipeline construction.
For further information, please contact either Marcelo Tavarone, Nicolás Eliaschev, Tomás Villaflor or Luciana Tapia Rattaro.
Recent Developments in Renewables and Natural Gas in Argentina
In the past few months, certain regulations have been adopted by the Secretary of Energy (“SE”) dealing with renewables and natural gas transport.
Below is a brief summary of such resolutions.
1. New conditions for termination and amendment of PPA under the RenovAr Program
On December 27th, 2021, the SE issued the Resolution No. 1260/2021 (the “Resolution 1260”), which provide opportunities for projects companies to terminate or amend power purchase agreements executed under the RenovAr Program (“PPA”).
The goal of Resolution 1260 is, on one hand, to facilitate exit for projects which have not been built, in order to regain transmission capacity. This should enable additional transmission capacity to be freed-up for the corporate PPA market.
On the other hand, Resolution 1260 allows project companies to request an extension of three hundred and sixty-five days to reach the commercial operation date (“COD”), subject to the fulfilment of certain requirements (such as a reduction of both supply period and price).
2. Amendments to regulations in the Renewable Energy Term Market (Corporate PPA Market)
On January 21st, 2022, the SE issued Resolution No. 14/2022 (“Resolution 14”) which amends certain regulations applicable to the Renewable Energy Term Market established by Resolution No. 281/2017 as amended.
Essentially, Resolution 14:
- Simplifies the tie-break mechanism for dispatch priority awarding by removing tie-break for commercial operation term, dispatch factor, tax benefits and toss. Resolution 14 adds the submission of a Magnification Factor successively until tie-break is reached as only requirement and proceeding.
- Establishes restrictions for those projects which do not comply with the payment of dispatch priority maintenance charges or with terms proposed for COD.
This regulation is regarded as a way of further accelerating development in the corporate PPA market which currently has projects under commercial operation for nearly 900 MW and projects approved during 2021 for an additional 467 MW and a strong interest of large consumers in expanding electricity procurement needs from renewables.
3. Expansion of the Natural Gas Transport System
On February 9th, 2022, the SE enacted Resolution No. 67/2022 (“Resolution 67”), which creates the “Transport.Ar National Production” program (“Transport.Ar Program”) for the construction and expansion of several natural gas pipelines, including new facilities as well as upgrades of existing facilities.
Resolution 67 entrusts the state-owned company Integración Energética Argentina S.A. (“IEASA”) with the construction and expansion of the pipelines indicated therein, which may be executed by IEASA itself or awarded to other companies.
Strong priority is given to the construction of a new pipeline which would enable to significantly expand transport capacity from the Vaca Muerta reservoir.
Further details regarding construction and funding of this infrastructure are pending and expected to be known soon.
For further information, please contact either Nicolás Eliaschev or Tomás Villaflor.
Amendments to Resolution No. 285/2018 of the former Ministry of Energy and Mining: COD Extension and reduction of penalties for RenovAr projects
On August 3rd, 2021, the Secretary of Energy issued Resolution No. 742/2021 (“Resolution 742”), which partially amended Resolution No. 285/2018 of the former Ministry of Energy and Mining (“Resolution 285”).
1. Main outlines of Resolution 285
Resolution 285, now modified by Resolution 742, allowed generators under RenovAr 1, 1.5 and 2 to defer Commercial Operation Date (“COD”) under their Power Purchase Agreement (“PPA”) for up to 180 days.
In addition, Resolution 285 also allowed generators to pay penalties for late COD in 12 or 48 monthly installments.
2. Context in which Resolutions 285 and 742 are enacted
Resolution 742 continues the path lay out by Resolution 285 as it is issued to allow the execution and operation of projects under RenovAr 1, 1.5, 2, 3, and Resolution No. 202/2016 of the former Ministry of Energy and Mining which have suffered delays in achieving COD.
Accordingly, Resolution 742 purported purpose is to enhance further investment in the renewable sector by providing certain relief to the projects comprised in said resolution.
Furthermore, both resolutions are issued under the scope of the Laws No. 26,191 and 27,191. Such laws aim to increase to twenty percent (20%) by 2025 the total domestic demand of renewable energy, by mandating that a portion of the country’s electricity consumption must be sourced from renewable energy.
3. Resolution 742 key takeaways
Key takeaways of Resolution 742 are:
- Option to extend the additional term provided by Resolution 285 to achieve COD in 360 days.
- Right to adhere to the terms of Resolution 285 (as amended by Resolution 742) at generator’s option.
- Reduction of penalties fines based on the progress of the project’s works or, in the case of projects that have already achieved COD, with a delay greater than 180 days, such reduction is of 70%.
- CAP to the penalties which may be offset from the PPA, amount which shall not exceed 40% of the monthly revenues.
Below is a comparison between the most significant aspects of Resolution 285 and Resolution 742.
Also, we detail certain maters introduced by the Resolution 742 which were not foreseen in Resolution 285.
Finally, we single out certain aspects of Resolution 742 which should be further clarified.
| Issue | Resolution 285 | Resolution 742 |
|---|---|---|
| Payment of penalties | Penalties payable in 12 or up to 48 equal, consecutive, monthly installments. In the latter, an annual interest rate of 1.7% is applied. | Penalties still can be paid in 12 or up to 48 equal, consecutive, monthly installments. However, in the latter, Resolution 742 caps the monthly penalty in an amount no greater than 40% of the monthly revenue under the PPA. The unpaid balance will be offset until the total is completed, under this methodology. The purpose of this clause is to ensure generation plants maintenance and to avoid a penalty deduction greater than the monthly remuneration. |
| Extension of COD | COD extension up to 180 days. | COD extension up to 360 days, if the following criteria is met: (i) evidences that the Project has been executed in a percentage equal or greater to seventy percent (70%) an increase of the Contract Performance Guarantee; or (ii) the compliance bond has been increased or is increased in 30%. |
| Additional changes | Resolution 285 provided that for the application of a daily penalty a rate of US$1,388/MW. Nonetheless, this fine could be reduced evidencing certain progress of the project. | Article 3 bis is incorporated, which establishes: (a) Projects that have achieved COD: Those that (x) reached COD, (y) with a delay of more than 180 days, and (z) that have not requested the application of Resolution 285, may postpone COD in 360 days. In this case, a reduction of penalties in 70% is foreseen. (b) Projects that have not reached COD: Those that (x) have not reached COD, (y) did not requested the application of Resolution 285, and (z) adhere to Resolution 742; must replace the compliance bond with a bank guarantee, payable upon demand, which shall also contemplate any prior increase which may be due. In this case, it is provided that, during the additional 360 days extension period of COD, the daily fine will be equivalent to the daily fine established in Clause 13.2. (a) or 13.1, accordingly. Such fine may be reduced based on the progress of the project. |
4. Other relevant matters
Generators adhering to Resolution 742 are required to waive any prior or future administrative, judicial, administrative, or arbitral claims against the National Government, the Secretary of Energy or CAMMESA in the Argentine Republic, whether in Argentina or abroad.
If adhering to Resolution 742, generators shall manifest so in writing to CAMMESA and submit such waiver within 30 business days.
5. Matters which should be further clarified
The following matters are singled out which, from our perspective, are not entirely clear and should be further clarified.
Resolution 742 does not state whether the eventual reduction of the penalties fines up to 70% is for the entire fine accrued, or for the balance not yet accrued or unpaid.
Resolution 742 does not indicate whether the replacement of the compliance bond for a bank guarantee is for the projects covered by article 3 bis, second paragraph solely (projects without COD, which have not yet adhered to Resolution 285) or for all projects comprehended by Resolution 742.
Finally, in relation to the compliance bond increase, required by articles 3 a) (ii) and 3 b) to admit the extension of the COD, is not specified whether such increase should be for the original guarantee or for the replaced guarantee (bank guarantee).
For further information, please contact either Nicolás Eliaschev, Javier Constanzó, or Daiana Perrone.
New Pricing Scheme for Legacy Power Generators, Co-generators and Self-generators: Amendment to Resolution 31/2020 of the Secretary of Energy
On May 21st, 2021, the Secretary of Energy issued the Resolution No. 440/2021 (“Resolution 440”), which most relevant aspects are singled out below:
- Resolution No. 31/2020 (“Resolution 31”) is abrogated by Resolution 440, including the remuneration adjustment mechanism set forth in said Resolution 31.
- A new pricing scheme applicable to the Wholesale Electricity Market Generator Agents of Tierra del Fuego’s (WEMGATDF) is contemplated.
- WEM Agents included in Resolution 440 are required to waive any prior or future administrative claim against the National Government, the Secretary of Energy or CAMMESA, regarding the implementation of the remuneration adjustment mechanism provided in Resolution 31.
- Finally, CAMMESA is instructed to re-settle any economic transaction starting on February, 2021, thereof.
The purported aim of Resolution 440 is to mitigate the effects of the economic situation as a result of the economic crisis and COVID-19 pandemic, as a way to ensure the sustainability of the WEM under economically reasonable and efficient conditions.
Below is a summary of Resolution 440 most relevant aspects:
1. Scope of Resolution 440
A new remuneration mechanism for conventional and renewable generation, cogeneration and self-generation, operating without a PPA, has been approved, effective as of February 1st, 2021.
2. Changes in the remuneration conditions of the Generating Agents
Resolution 440 provides for a new remuneration scheme for the WEMGATDF and WEM Agents, with increases in around 29% when compared to repealed Resolution 31, with effects starting on February 2021.
Unlike abrogated Resolution 31, Resolution 440 does not include a remuneration adjustment mechanism.
3. Waiver under Resolution 440
WEM Agents included in Resolution 440 which choose to benefit from Resolution 440 are required to waive any prior or future administrative claim against the National Government, the Secretary of Energy or CAMMESA, regarding the implementation of the remuneration adjustment mechanism provided in Resolution 31.
Such waiver shall be submitted no later than June 21st, 2021.
For those WEM Agents which chose not to submit such waiver, they shall continue receiving the remuneration set forth in Resolution 31 and forfeit they right to receive the retroactive amounts provided in Resolution 440.
If such waiver is submitted later than June 21st, 2021, they shall receive the new remuneration set forth in Resolution 440 but will not be entitled to receive said retroactive amounts.
For further information, please contact either Nicolás Eliaschev or Javier Constanzó.
News in the Oil Upstream Sector: Argentina Fixes Local Crude Oil Reference Price
On May 19th, 2020, Decree No. 488/2020 (the “Decree”) has been issued by the National Executive, which fixes the local crude oil reference price locally produced and delivered (known as the Criollo or domestic barrel) at US$ 45 per barrel, with effects up to December 31st, 2020.
Furthermore, among other relevant matters, the Decree:
- Establishes a 0% rate for export duties if the international crude oil price is below US$ 45 per barrel.
- Foresees certain obligations for producing, trading and refining companies.
- Includes certain restrictions applicable for those companies in connection with the FX market.
- Limits the ability to import crude oil.
- Updates the values foreseen for penalties under the Hydrocarbon’s Law.
According to the Decree’s recitals, this measure is enacted in order to allow oil producing companies to cover operational costs and sustain the activities and/or production levels prevailing prior to the beginning of the epidemiological crisis, taking into account the current demand shrinkage caused by COVID-19. In addition, the Decree holds a special consideration to the strategic dimension of non-conventional hydrocarbons production in Vaca Muerta.
Below is a summary of the Decree’s most relevant aspects:
1. Domestic oil barrel price
The Decree is effective immediately and the domestic price set forth therein is valid until December 31st, 2020, unless as stated below.
Crude oil produced and delivered in the local market shall be invoiced by producing companies and paid by refining and trading companies considering the Medanito crude type oil price of US$ 45 per barrel (US$ 45/bbl) as reference. This price shall be adjusted concerning each crude type for quality and charging port, according to the usual practice in the local market, and shall also be applicable for payment of royalties to Provinces.
Should at any time the “ICE BRENT PRIMERA LÍNEA” price exceed US$ 45 per barrel for ten days in a row, the domestic price established by the Decree shall cease to be in effect.
2. Obligations of the producing companies
While the domestic price is in force, producing companies are compelled to:
- Sustain the activity and/or production levels registered during 2019, taking into consideration current local and international demand shrinkage, and always within the adequate and economic operation parameters established in article 31 of Law No. 17,319.
- Comply with the regional services contracts and maintain the employee payroll which was in place in December 31st, 2019.
3. FX restrictions
During the validity term of the domestic oil barrel price, the producing companies which benefit from such price, shall not be able to access the FX market for the structuring of foreign assets nor have the ability to operate in the blue chip swap market.
4. Refining and trading companies’ obligations
The refining and trading companies shall purchase the total crude oil demand to local producing companies, considering the crude quality required by the refining processes and in accordance with the price established in the Decree. For integrated companies, the purchase shall be held with 2019-standards if the crude acquisition exceeds their own production and the subsidiary ones.
Companies shall not be able to import products available in the local market.
5. Export duties for oil and derivatives
For the calculation of the rate applicable for export duties, the Executive Power sets the following “ICE Brent primera línea” values: a) Base Value (“VB” in Spanish): US$ 45 per barrel; b) Reference Value (“VR” in Spanish): US$ 60 per barrel; and c) International Price (“PI” in Spanish): the one published the last business day of every month by the Secretary of Energy, based on the last (5) “ICE Brent primer línea” prices” taken from the “Platts Crude Marketwire” with the “Future Settlements” heading.
For those purposes, the last business day of every week, the Secretary of Energy shall assess the monthly average prices and, if the difference between that price and the actual valid price were to exceed 15%, it shall establish a new price, which shall enter into force the following business day.
Accordingly, the Decree stipulates a 0% rate for duty exports when the International Price is equal or lower than the Base Value.
On the contrary, if the price is equal or higher compared to the Reference Value, the duty rate shall be set forth in 8%. Otherwise, if the International Price were to be higher than the Base Value and lower than the Reference one, the rate shall be determined through the following formula: Duty rate = {PI-VB/VR-VB} x 8%.
6. Taxes.
The increase on Liquid Fuel and Carbon Dioxide Taxes pursuant the updates corresponding to the first and second trimester of 2020 shall enter into force for unleaded and virgin oil, and gas oil as of October 1st, 2020.
7. Updates on fines values
Fines that may be imposed by the concession grantor under Law No. 17,319 have been updated, whereby the new fine values established are the following: minimum amount equivalent to the value of 22 m3 of the national crude oil in the local market and a maximum amount equivalent to 2.200 m3 of the same hydrocarbon for every breach.
8. Delegation of powers to the Secretary of Energy
The Executive Power has awarded the Secretary of Energy the authority to modify the crude oil prices foreseen in the Decree on a quarterly basis, as well as to periodically revise the extent of this measure pursuant the production volume and levels of activity and investment.
Likewise, the Secretary of Energy shall verify the non-realization of monopolistic conducts by every subject of the oil chain of production. To exercise this supervision authority, this public body shall consider objective standards of production and shall consider the consequences provoked by COVID-19 pandemic.
An interview made by the Law Journal of Universidad San Andres (Revista Jurídica de la Universidad de San Andrés) to our partner Nicolás Eliaschev including further analysis and opinion about the Decree can be accessed by clicking or tapping here (in Spanish).
For further information, please contact Nicolás Eliaschev and/or Javier Constanzó.
In the following link, you can access the Firm’s statement on COVID-19.
For information concerning COVID-19 legal implications, please refer here.
COVID-19: Standards for Electricity Distribution
On May 16th, 2020, Resolution No. 35/2020 (the “Resolution”) was published in the Official Gazzette, in which the Electricity Regulatory Authority–in Spanish Ente Nacional Regulador de la Electricidad–(“ENRE”) authorizes certain EDENOR and EDESUR users reached by the mandatory isolation measures established by Decree No. 297/2020 (as amended) to either suspend payments or make partial payments on account of the contracted capacity through supply agreements; or otherwise, to terminate the contract or require an amendment.
1. Benefited users and periods comprised
EDENOR and EDESUR users belonging to categories T2, T3 and Toll (i.e. medium to large users) whose power demand was reduced in 50% or more as a result of isolation measures, may resort to the alternatives provided in the Resolution for payments accrued since March 20th, 2020 and pending subsequent periods.
2. Benefit’s extension and payment facilities
For users which have opted to whether suspend or make partial down payments, this benefit will terminate when the demand recovery reaches 70% of its contracted capacity. In addition, users who resort to this option shall pay debt accrued pursuant to criteria to be determined by ENRE.
3. Distribution companies’ obligations
Distribution companies shall communicate to users the extent of the different options authorized and refer a weekly report to ENRE with the contractual suspensions, modifications and/or terminations based on the Resolution.
For further information, please contact Nicolás Eliaschev and/or Javier Constanzó.
In the following link, you can access the Firm’s statement on COVID-19.
For information concerning COVID-19 legal implications, please refer here.
Renewables and Distributed Generation: Between Promises and Reality During COVID-19 Times
As the worldwide oil prices volatility show, the energy industry has not been left unaffected by the global crisis caused by COVID-19 pandemic.
During these hard times, it is worthwhile to wonder about the present and the future of the Argentinian electricity sector and the potential to turn the crisis into an opportunity.
In the attached report, we argue that price volatility of energy commodities and the current and future presence of health and environmental disruptive threats, advice to keep betting for diversification of the electricity mix as the best path to ensure security and continuity for long-term power supply.
Under this context, the report summarizes the main aspects of laws and regulations targeting renewable distributed generation which have shown strong consensus in the country as we further claim that fostering renewable distributed generation such as our current policy does, seems convenient under existing circumstances.
The report also includes preliminary remarks regarding the following issues:
1. Short-term relevant needs of the electricity sector
- Preservation of payment cash flow and short and mid-term economic and financial sustainability of all industry players.
- Termination of emergency under Law 27,741 during the legal period provided thereof and operation of the electricity sector under the rules of Law 24,065.
- Short-term focus for renewables
- Possibility of extending commercial operation dates and intermediate milestones in power purchase agreements corresponding to projects under structuring and/or advanced construction affected by the health crisis and measures adopted consequently either in Argentina or abroad.
- Assessing on a-case-to-case basis opt-outs and/or voluntary renegotiation of power purchase agreements for projects with no activity prior to March 12, 2020 (date under which the health crisis was declared), using uniform and non-discriminatory approaches.
- Long-term decisions
- Definition of transmission infrastructure expansion structure and planning for deployment for additional capacity of renewables for complying with the goal of 20% of consumption for 2025.
- Technical and financial evaluation of expanding such consumption target beyond 2025.
- Continuity of the electricity mix diversification, evaluating the role of efficient thermal, nuclear and hydropower technologies.
- Assessment of new technologies to strengthen the system and supplement the development of Distributed Generation, including power storage, smart metering, demand management and electric mobility.
- Assessment of opportunities to boost regional integration and cooperation for spot and long-term exchanges of natural gas destined to power generation and, power itself, with nearby countries.
In the following link, you can access the Firm’s statement on COVID-19.
For information concerning COVID-19 legal implications, please refer here.