Argentina Seeks To Unlock Delayed Wind Farms
Posted 06/08/2021 12:56
Argentina is easing conditions on wind energy developers to unlock projects held up by the country’s long-running economic crisis.
Under a ruling issued 3 August by Energy Secretary Dario Martinez, developers will be given more time to complete construction of their wind energy projects awarded power purchase agreements under the Renovar series of renewable energy tenders. They will also be given discounts and facilities to pay fines for late completion.
Argentina’s power market operator Cammesa awarded contracts to buy power from almost 4.5GW of renewable energy projects in 2016 and 2018 during the first two Renovar rounds, including almost 2.5GW of wind energy.
While 2.7GW has now been developed, most of the remaining capacity has been held up by a lack of financing after Argentina’s financial crisis increased risk premiums to unsustainable levels.
Under the latest ruling, projects that are more than 70% complete will be able to request a 360-day delay of their deadline to begin supplying electricity to the grid during which time the daily fines will be reduced by up to 70%.
Developers will also be able to pay off penalties for the late completion of renewables projects in up to 12 monthly interest-free quotas. Alternatively, they can pay the fines over four years with a 1.7% interest rate, although with the condition that the fines cannot exceed 40% of the project’s monthly revenue.
The reduction in the penalties is designed to make it possible for developers to find financing for their projects to complete construction.
“It’s good but I don’t know if it’s enough. We will have to see as this ruling is implemented,” Hector Ruiz, general manager of the Argentinean Chamber of Wind Energy explains.