This GT alert highlights news and updates on renewable energy in Latin America.
The Mexico City government has announced an upcoming call for the second phase of the Central Market solar project, estimated to be the largest solar project installed in a city (36,000 solar modules generating 25 GWh per year). The content of the call will be published on the website of the Federal Electricity Commission on March 28 and the offers will be reviewed on May 2. The award is expected to take place a week later and the signing of the contract is expected to take place on May 16, 2022.
The first phase was awarded to Fortius Electromecánica, SA de CV for an amount of 25,101,077.06 pesos.
Puerto Rico is accelerating in the race to zero emissions. The Office of Energy will issue six Requests for Proposals (RFPs) for renewables and storage, with the goal of decarbonizing its electric grid by 2050.
The “Tranche 1” project was launched in 2021, and several standard contracts were examined in the first half of January 2022, with 15 proposals for a total of 732.72 MW of photovoltaic capacity, and three for 220 MW of solar capacity. energy storage. Further projects for 130 MW of solar power and 445 MW of battery storage capacity may soon be added to this process.
In 2022, the second part of the project, “Tranche 2 and Tranche 3”, was announced, for which Acción Group was appointed independent project coordinator.
On January 28, 2022, the Minister of Energy and Mines Eduardo Gonzalez Toro confirmed that two new renewable energy public auctions would be held in 2022 for a total of 2,000 MW.
The national electricity coordinator said only one solar PV project – of 9 MW – started operations in January 2022, the lowest value reported in the last year, apart from three registered 8 MW projects. in March 2021.
However, the registration of Small Distributed Energy Generation (PGMD, for its abbreviation in Spanish) continues to increase. To date, 1679 MW are in operation, of which 71% (1186 MW) is solar photovoltaic, followed by 16% thermal (275 MW), 10% hydroelectric (164 MW) and 3% wind (54 MW).
The national electrical coordinator assures that eight PMGDs for 44.4 MW of solar photovoltaic already have a start of operation date (COD) letter and should start soon. There are 20 additional projects, totaling 90 MW, which have started commissioning and are in the process of obtaining their COD.
Argentina announced the completion of the construction of the 1.2 MW El Alamito solar park, which will be expanded to 6 MW in the near future. Once the first stage is completed (according to the contract, it should be completed on May 4), the Neuquén Investment Agency is expected to launch new tenders for the second phase of the photovoltaic plant, with a capacity of up to 3-4MW.
In addition, Argentine business leaders propose using the PMGD model (limit up to 9 MW of power) or the Brazilian regulation on distributed generation (up to 5 MW) as a basis to continue promoting renewable energy. in the country. Their reasoning includes the fact that in 2021, the target set by national regulations has not been met, nor has it reached the minimum of 16% from sustainable sources of total electricity consumption (it has only exceeded 12 %). The stated target of the 2017 National Energy and Climate Change Plan to have 14,563 user-generators by 2021 has also not been met.
Given that neighboring countries such as Chile and Brazil, which have implemented the proposed scheme, have achieved results in recent years, the private sector in Argentina wishes to engage with the government to modify its current model in order to obtain better results and achieve the objectives set out in the National Energy and Climate Change Plan.
Gabriel Pinetta, TechnoHydro’s commercial director in the region, sees the Guatemalan market as fertile ground for investment in new power plants.
Guatemalan distributors are expected to unveil preliminary groundwork in the coming months. For now, they estimate that at least 50% of electricity needs will be allocated to renewable energies under contracts of up to 15 years.
According to the terms of reference of the call for tenders, issued by the National Electricity Commission, it is expected that the contract will be awarded to both “new” and “in operation” plants, with the capacity to Allocate 50% to 100% of the total power required for renewable power plants, as long as the total cost of purchasing power and energy is minimized.
In this sense, investments in hydroelectric technology are positioning themselves as a favorite among local entrepreneurs, even if they have faced challenges in the region given the fragile legal certainty of each country, social conflicts and additional variables.
On February 8, 2022, the Inter-American Development Bank (IDB) announced the approval of a line of financing for Banco de Comercio Exterior de Colombia (Bancóldex) of 175 billion Colombian pesos (approximately $45 million). It will also provide $3.5 million in co-funding and $1.5 million in non-repayable funding from the Clean Technology Fund.
This line of finance aims to provide lines of credit with longer tenors, ranging from 15 to 20 years with lower interest rates, ideal for financing renewable energy projects, including solar and wind, small hydro, biomass and green hydrogen, as well as associated transmission lines. It will also allow the financing of electric mobility, such as mass or integrated public transport systems, private transport services, individual passenger transport and freight transport.
It was announced that the Bancóldex line of financing will allow the financing of projects focused on battery storage, energy efficiency, among others.
As established by the IDB, the loan is aligned with Vision 2025, the IDB Group’s roadmap for recovery and inclusive growth in Latin America and the Caribbean, in four fundamental areas: digital economy, productivity , gender and inclusion, and climate change.
On February 8, 2022, the Colombian government announced that new call auctions would be released when deemed relevant, without specifying a date.
Brazil continues its growth in renewable energy, surpassing 13.5 GW of installed capacity between the distributed and centralized generation segments in January 2022. While only 116 MW entered service in January, it is estimated that the next calls to develop could increase capacity.
Brazil’s A4/2022 new energy auction is set to take place on May 27, with 1,263 solar projects for 51,824 MW of supply, which could significantly increase the country’s PV capacity in the coming years. The operational deadline is January 1, 2026.
Also, on February 10, 2022, the Brazilian National Electric Energy Agency (ANEEL) will open public consultation number 03/2022.
The Dominican Republic currently has 1,378 MW of renewable installed capacity out of a total of 5,000 MW of power plants of different technologies that distribute to the national interconnected electricity system. According to the records of the National Energy Commission (CNE), in 2021 the country has signed several PPA contracts with about ten companies that will develop wind and solar projects with a capacity of 550 MW. The potential for expanding production with these technologies would be even higher, as there are approximately 22 projects currently in the process of receiving corresponding concessions.
The Dominican Republic aims to cover 25% of electricity demand by renewable energies, in accordance with the provisions of Law 57-07 of Chapter IV (special regime for electricity production). To achieve this objective, the government proposes that these investments be made by the private sector, so that the state does not incur capital expenditure to build new projects.
In 2021, the CNE recommended the granting of enabling titles and the signing of definitive concession contracts for the construction, installation, operation and commissioning of renewable projects totaling 563.6 MW.
As a result, the signatory companies should start work on the parks, mainly solar (513.6 MW), in 2022. However, given the increase in consumption, to reach the target of 25% by 2025 , more renewable power plants should be built. operational. Therefore, new tenders are expected in the Dominican Republic.
In 2021 and so far in 2022, several Latin American countries have made efforts to implement new renewable energy projects. Some of them are in the process of building new solar and wind projects, while others have set up financing schemes in collaboration with national banks to support these projects.
For reference, below is a table describing the countries with the largest renewable energy generation capacity (in megawatts) in Latin America and the Caribbean in 2020, published by Statista.
©2022 Greenberg Traurig, LLP. All rights reserved. National Law Review, Volume XII, Number 62