A Province-by-Province Look at the Regulatory Framework for the Distribution of Renewable Energy

09-09-2019

Following the enactment of National Law 27,424 of Distributed Generation, Decree No. 986/18, Resolution No. 314/18 of the Ministry of Energy, Provisions of the Undersecretary of Renewable Energies and Energy Efficiency No. 28/19, 48/19, 62/19, 83/19, and the provisions of Regulatory Entity (ENRE) No. 111/19 and 189/19, and General Resolution 4511 AFIP—which establish a general regulatory framework at the national level—we can take the current body of regulation and use it as a model to analyze the situation in each of the provinces. From there, there are those that have adhered to the national law, and those that have established their own regulatory frameworks.

The national regulatory framework is defined by the following factors:

Billing schemes.

Tax incentive structure.

Fiscal stability checks.

Technical requirements for measuring equipment.

Contracting conditions.

Invitation sent to municipalities.

Regulation of public buildings.

First we will look at the provinces that adhered to the national law.

THE CITY OF BUENOS AIRES (CABA) – The city of Buenos Aires has adopted all of the aforementioned national regulations. The jurisdiction has established its own set of financial incentives.

CATAMARCA – Currently in place is a local system of tax benefits by means of reduction in payments, bonuses, a dismissal of conditions deemed impossible, various methods of payment and emission of certificates for financial benefits that aim to sustain politics that promote and foment generation from renewable resources in a manner that’s sustainable.

Catamarca has also established technical requirements for measurement equipment and has invited municipalities to establish promotional benefits.

Regarding public buildings, it was decided that all public buildings under construction should consider using some type of generation that comes from renewable energy and conforms to the type of renewable energy coming from the area in which it is to be located. An environmental study that conforms to applicable regulations in the respective jurisdiction must also be carried out.

CHACO – They only adhere to the national law. There are no provincial rules for complying, except what is regulated in what is established in their regulations for distributed generation.

CHUBUT – Regarding national benefits, it is regulated by its own set of financial benefits. They also invite municipalities to adhere to the national regulations with the incorporation of financial benefits and public buildings. The provincial executive power (the governor) must carry out an evaluation of the technical feasibility of the installation of a grid coming from renewable sources in each of the locations that have isolated generation. This evaluation and technical report must be sent to the provincial legislative body and made available to the Cooperative Federation of the Province of Chubut for consideration.

CORDOBA – Being much more active, they adhere to the national law, regulate their own law of adhesion on a tax benefit bracket, and income coming from the injection of electricity into the grid is exempt from the gross income tax, which gives cheaper energy to small users and reduces the tax on large users.

Municipalities are also invited to adhere to the national regulations by incorporating the financial benefits. A strong financial push is present with subsidiary credits available through the provincial bank BANCOR.

LA RIOJA – A system of regulating technical equipment necessary for the connection from a local generator has been established; they have established a financing system for injecting into the grid and with regards to public buildings.

MENDOZA – Adhesion to the national law foresaw the possibility of creating a type of MATER for distribution, adopting advanced international regulations, and defining things in terms of market agents in renewable energy rather than electricity users—also the user / generating collective, to the concept of an entities that commercialize, store and generate virtually.

There is a set of technical conditions for sending electricity to the grid, in this case a tariff bracket, which regulates tariffs for sending energy to the grid.

The province has also created positions to advise the governor: a Work Committee made up of the Secretary of Public Services; Provincial Electric Regulatory Entity; Ministry of Economy, Infrastructure and Energy; those authorized for the public service of electricity distribution; universities; professors with a background in the subject; and the energy company SAPEM from Mendoza.

NEUQUÉN – The adhesion to the national law also included regulations on invoicing, taxing and financial incentives, technical requirements for measurement equipment, conditions for contracting, invitations sent to municipalities, and regulations involving public buildings.

SAN JUAN – Previous to the enactment of the provincial law that states adherence to the national regulations for distributed generation, the province laid out the “Guidelines for Matters with Impact on the Local Jurisdiction for the Regulations on the Promotion of Distributed Generation of Renewable Energy into the National Grid – National Law No. 27.424,” which are applied anyway. Also, the jurisdiction will define how installations distributed in buildings and public spaces are treated within the area of the province.

TIERRA DEL FUEGO – Set financial benefits for taxes over local taxes and the province will evaluate the possibility of considering generated-distribution systems for electricity within its existing and future buildings.

TUCUMAN – Prior to adhering to the national law of distributed generation in January, 2019, Tucuman had already passed laws on renewable-based electricity and isolated generation.

It also proceeded to apply this regulation to residential users with connection possibilities of up to 150 kV in low voltage, and established a maximum quota of 4 MW for the entire province.

The regulatory framework in Tucuman is complete, as it provides the following: billing schemes, tax schemes and incentives, technical requirements for measurement equipment, contracting conditions, and financing through the bank Caja Popular de Ahorros de la Provincia.

Provinces that Have Adopted their Own Regulations for the Distribution of Renewable-Based Energy

BUENOS AIRES – Even though it is one of the provinces that pioneered regulations regarding renewable energy, a renewable-based distributed generating system below 5 MW must be property or associated with an electric utility under provincial or municipal concession. They constructed many solar parks by means of a specific financial fund (PROINGED) to solve issues related to voltage and other technical issues related to utilities.

It is also set as a priority that public buildings are able to generate renewable energy.

All of this even though the province does not have its own regulatory framework so that users can be consumers and generators at the same time.

CORRIENTES – The province copied the guidelines of the national law but didn’t adhere. If the law is not adhered to, the regulations will be stand-alone.

The province created a fee equal to the cost of 4 Kw/h according to the value of the corresponding tariff on small residential demands of more than 500 Kw/h bimonthly on the utility tariff table active at the time of billing. The fee goes to the fund for the generation of renewable energy.

ENTRE RIOS – A decree has been made that created incentives for small generators of renewable-based energy in projects under 50 kW.

Small users are allowed connections for low-levels of generation after a connection fee has been paid, and which should then be installed by a person or company that is suitable to comply with the technical requirements set by the provincial regulations.

Excess sent to the grid will be redistributed by the buy cost in the MEM increased by a percentage that represents the transport loss.

JUJUY - The province’s own regulations establish schemes for invoicing in which the user receives a basic tariff that is based on the seasonal price of the MEM for each kW/h that goes to the grid. If the user is part of a shared living situation, they can receive extra compensation or tariff breaks which is determined by the Application Authority, and cannot be more than 5 years.

A promotional plan for investment is in place for the acquisition and installation of equipment necessary for users to become generators. They is also a promotional plan for the creation and establishment of companies set to produce and assemble equipment designed for the distribution of electricity coming from renewable sources.

A tax system is in place that includes incentives lasting 10 years and promotes stability. There is also an invitation to the municipalities and municipal boards that gives adherence to the law; it also provides tax benefits that serve as promotion for the production of renewable energy.

LA PAMPA – The following are considered active participants in the matter: SAPEM, individuals and/or legal entities that are private or public, including electric cooperatives that make up the provincial grid that has been conceded for public service and electricity distribution, producers or generators of electric energy that come from renewable sources, which are categorized in the following manner:

Large Producers: Operating with 10+ MW installed

Medium Producers: Operating between 1 and 10 MW installed

Small Producers: Operating between 0.5 M

Micro Producers: Operating at less than 0.5 MW installed

Equipment manufacturers and providers and/or machine components that are related directly to the generation of renewable energy.

Operators of the provincial grid.

An investment scheme has been instituted than spans 10 years, and is made for the construction of new public works or expansions/improvements of previously existing structures that are destined for electricity production that comes from renewable energy.

Those that benefit from the scheme are the holders of investments and concessionaires of new ventures in the production of electricity from renewable sources when their electricity production is sent to the provincial grid, the MEM, used for its own consumption or production of goods and services by 3rd parties.

A tax reduction scheme is also set for 10 years than can be expanded to 15.

The province invites the municipalities and development boards to comply with the law and to create (in their respective jurisdictions) their own legislation that is aimed at the promotion and production of electricity from renewable sources, which can be through tax exemptions or credits towards municipal fees.

MISIONES – Under their system, a user can give surpluses of electricity generated inside their personal grid that cannot be consumed at the supply/installation point where the client is signed up for a supply contract at that time.

The Ministry of Energy establishes the price that is to be paid for electricity generation, which must be in accordance with the sell price in the national electricity market for the corresponding type of energy generation and original when it is sent to the grid. Quantities and cost generated by the user under this “net balance system” are considered to be the supply cost of the distributor in order to calculate the corresponding tariff brackets for concession contracts.

If the user is interested in generation and has a chance for a carbon bond certificate from the “International Decontamination Mechanism to Reduce Polluting Environmental Emissions”, the benefits lie solely on the user who finances the generation and connection installation. The distributor must provide all information necessary to the user for processing the bonds and getting the paperwork squared away.

Provincial law provides no regulations on technical requirements for connections or measurements.

SALTA – One of the earlier regulations set establishes a net-balance billing system.

Users with a supply at low voltages cannot connect renewable-based electricity that has a nominal power higher than 100 kW or greater than 50 percent of the power installed at the low-to-mid transformation center (CT MT / BT) that feeds the low-tension network, i.e. the smaller of the two figures.

Connection of the installation to the grid can only be three-phase.

The technical requirements needed for users to connect to the grid are also established.

The user must pay an authorization fee as well as technical inspection charges.

SAN LUIS – Here we will define a few terms: Generator – that who generates electricity with the main goal of sending it to the grid and marketing it. Distributed generator – that who generates electricity without that being its main goal and sends it in its entirety to a distributor’s grid. Self-generator – that who produces electricity exclusively for personal use with no connection to the grid. Distributed self-generator – that who produces electricity primarily intended to meet their own needs and that can also be used to give to those that need surplus. Co-generator – that who uses aspects of their main production process to develop secondary generation of electricity.

The province has a system called P.I.E.R., which stands for the Renewable Energy Incentive Plan and is for projects related to the renewable energy sector and establishes their operation in the province. The project helps to provide more jobs and makes the provincial economy more productive.

A fee exists for the impact of the development of renewable energy, and is applicable to users with installed power of more than 5 kW, except for residential users with consumption of less that 150 kWh a month.

A fund has been created for the promotion of renewable energy. It will feed into the creation of infrastructure works for renewable energy made by the governor and the also go to the co-financing of research, study and/or the development of renewable-based projects.

The province invites its municipalities to state, in their respective jurisdictions, the legislation needed to promote the generation of renewable-based production.

The governing authority will work on collaboration with the private sector to try to meet the goals laid out in legislation.

SANTA FE – This province was a pioneer in the regulation of the distributed generation of renewable energy. It created the “Prosumer Plan.” It sets the tariff billing brackets. It regulates a system of prosumers for small users in relation to the other distributors, and another plan called “Maximum Production for Large Users” that have a medium voltage connection.

In the first case, what is sent to the grid may be up to 80% of the user’s consumption. Generation is incentivized by acknowledging the wholesale cost of electricity on the MEM plus VUIG, a Unit Incentive Value per Generation that changes from between $5 - $6.5 per kWh depending on what category the user falls into.

The maximum use that defines each category is as follows: Residential – up to 5 kW; Rural: up to 15 kW; Commercial: up to 15 kW; Industrial: up to 15 kW.

In the case of the latter—Large users: what is sent to the grid may be up to 80% of the user’s consumption. The program has a quota of 6400 Mwh/year. Generation is incentivized by acknowledging the wholesale cost of electricity on the MEM plus VUIG, a Unit Incentive Value per Generation that changes from between $0.50 - $1 per kWh depending on what category the user falls into.

The province has set regulations for technical aspects of grid connection.

Tax deductions/credits have been established and plan for future provincial housing plans and construction of public buildings. In the construction of school buildings, steps should be taken to incorporate the use of renewable energy.

Autor
Fuente