News from the Electric Wholesale Market: Gustavo Báez Explains Why Renewables Are the Technology of the Future

12-06-2018

This month saw the carrying out of the 2nd annual national “Cooperative Management Seminar” organized by the Argentine Federation for Electrical and Service Cooperation (FACE). This time it took place under the title of “Preparing ourselves for the challenges presented by new electric paradigms.”

One of the talks was given by Gustavo Báez, an engineer who works for CAMMESA, and who explained how the company controls the Argentine market.

The seminar began with a summary of “bids”, made up of thermoelectric generator, large hydrodams, nuclear energy, “and in this modern time—renewables,” he pointed out.

He also stated that “in emergency situations” energy is imported from neighboring countries. “Demand is on the other side of the equation, mostly by distributers that make up 80% of it. Large end-users that operate directly with the MEM (Electric Wholesale Market) and also exportation demand, which is called upon by neighbors in times of emergency,” he continued.

Regarding demand, he stated that the Argentine system is designed with hydro and natural gas at its base, with all other combustibles set down as “last resort resources.” This doesn’t include expensive forms of energy such as diesel and petrol which are “everyday combustibles.”

“These are real numbers,” he stated simply: “This account is made complete and comes from what was paid for generation divided by demand over the year.”

“Within this context we see the possibility to replace hydrocarbon consumption with renewables,” he emphasized. He concluded by saying, “that is how the RenovAr program appears.”

For this reason, the RenovAr tenders were carried out in Round 1/1.5, Round 2 and the resulting contracts via Resolution 202: 157 projects for 4966 MW at a price of 59.9 dollars per MWh. “It turns out that beyond what we saw, there was the possibility to replace hydrocarbons with renewables, which would be superior to what we were using before due to competitive prices,” he stated.

Baez mentioned that energy contracts at this price need 15% tacked on top for costs coming from government initiatives that are awarded to private companies (adjustment and incentive factor). Regardless, the prices stays at 65.43 dollars per MWh. It remains competitive.

Futures Market

In order to get everything under Law 27.191, which states that electricity produced must have 25% renewables by 2020, the norm establishes that large end-users must consume a certain amount of renewables and have the chance to purchase from the private sector through the futures market or by generating it themselves.

With the recent awarding for dispatch priority assigned by CAMMESA to generators that want to install plants utilizing renewables to commercialize to large end-users—816 MW will be incorporated into the system. These numbers show how private demand is placing bets on clean energy, above all because their prices represent better competition.

Autor
Guido Gubinelli
Fuente
Energía Estratégica