Publisher: EE.SH / Wirtschaftsförderungsgesellschaft Nordfriesland mbH
PPAs, funds and tax certificates for the wind industry
- Argentina’s measures to support renewable energy projectsHusum (renewablepress) - The installation of 10 Gigawatt (GW) renewable energy capacity until 2025 is the target of Argentina’s current renewable energy plan called RENOVAR. The actual capacity installed is 1 GW, with many projects currently being installed. When the South American country developed a design to tender renewable energy projects in 2016, Dr. Ramiro Gomez Barinaga, lawyer at GB Abogados, was one of the counselors to the government. During the HUSUM Wind 2017 trade fair, Schleswig-Holstein’s renewable energy network agency EE.SH invited Barinaga to inform on the Argentinian market. This interview is freely available.
EE.SH: Mr. Barinaga, Argentina just opened the second round of 1,200 Megawatts for tenders in renewable energies after a total of 2,400 Megawatts were awarded to 59 projects in round 1 and the so-called round 1.5. What is the first step you recommend to companies interested in bidding?
Ramiro Gomez Barinaga: The first thing you need is a location for your project. So go there and find a trustworthy local partner who knows how to deal with permits and local authorities. Installing a wind farm in Argentina is nothing you can manage from abroad.
EE.SH: Is there a requirement to the local content when developing projects in Argentina?
Barinaga: No, it is not required, but highly recommended. If you cooperate with suppliers from Argentina, you get tax benefits in form of a tax certificate. There are for example turbine towers to be manufactured in Argentina, concrete as well as steel towers.
EE.SH: After being awarded, every project company needs to sign a Power Purchase Agreement (PPA). Why did the Argentinian government introduce this measure?
Barinaga: In order to give certainty to the projects. PPAs have the following characteristics: 20 year term, US-Dollar payments and foreign arbitration. Among other factors, this makes projects bankable. International financial corporations require long-term payments. Along with the PPAs, Argentina established FODER, a national fund to back up the PPA contract payments and saving Argentinian risks as non-convertibility and non-transferability risks through a put option right in before the projects.
EE.SH: What about the infrastructure in Argentina?
Barinaga: In the last 2 years, 65 infrastructure projects such as streets, ports and electric network have been tendered.
The 2nd round of RENOVAR tenders incorporates 550 MW wind energy and 450 MW solar energy as well as biomass, biogas and small hydro projects. The maximum prices based on the average prices in round 1 are 56 US-Dollar per Megawatt-hour (MWh) for wind and 57 USD per MWh for solar projects. The bid presentation is required until 19 of October 2017. The next round is expected for early 2018. Find more information at www.ee-sh.de.
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Husum, 19 September 2017
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Dr. Matthias Hüppauff
EE.SH - Netzwerkagentur Erneuerbare Energien Schleswig-Holstein
Wirtschaftsförderungsgesellschaft Nordfriesland mbH
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