The Electricity Regulation and Control Agency (ARCONEL) issued Regulation No. ARCONEL-005/25, which approves the Regulations to encourage generation with Non-Conventional Renewable Energy greater than 10 MW and less than or equal to 100 MW.
The regulation applies exclusively to projects that are not contemplated in the Electricity Master Plan (PME), that are not subject to public selection processes, or to projects located in the Galapagos electricity system.
Scope of application. – Private, popular and solidarity economy, and foreign state-owned companies that develop new generation plants with Non-Conventional Renewable Energy (NCRE).
Technical requirements. –
- Rated power between 10 MW and 100 MW.
- NCRE sources: solar, wind, geothermal, biomass, biogas and hydroelectric.
- Intermittent technologies (solar and wind) must incorporate battery storage systems (minimum 10% of the rated power, with 4 hours of charging/discharging).
Simplified procedures. – Projects that incorporate electrical energy storage systems and interconnection networks to the electricity grid (transmission) will have priority attention in order to obtain the enabling title.
The Preliminary Connection Feasibility (prior to the signing of the Enabling Title) and the Definitive Connection Feasibility (prior to the construction of the plant) must be obtained from the distribution company.
The Qualification Certificate must be obtained from the Ministry of Environment and Energy (MAE) and, subsequently, once the requirements established in the Qualification Certificate have been met, the Enabling Title (Concession Contract) must be signed.
Reversion of affected assets. – Upon termination of the Enabling Title, the assets that make up the generation plant will be reverted. In the event that the goods do not suit the national interest, the State reserves the right not to receive them.
Preferential prices. – Preferential prices are determined based on the Levelized Cost of Energy (LCOE).
- Solar photovoltaic: 8,036 ¢USD/kWh
- Wind: 7,174 ¢USD/kWh
- Geothermal: 14,662 ¢USD/kWh
- Biomass: 10,525 ¢USD/kWh
- Amazon Basin Hydroelectric Power Plant: 6,350 ¢USD/kWh
- Pacific Basin Hydroelectric Power Plant: 6,761 ¢USD/kWh
- Biogas: 9,250 ¢USD/kWh
NOTE. – The LCOE considers a transmission line (interconnection) of up to 25 km in length. In the event that a larger transmission line is required, a preliminary feasibility request for the design of the route will be submitted and, if authorized, ARCONEL will determine an adjusted preferential price.
Preferential term. – The preferential price will be in force by:
- Solar, Wind & Geothermal: 25 Years
- Hydroelectric: 30 years
- Biomass and biogas: 20 years
This bulletin contains a summary of legal developments of interest, and therefore cannot be considered as provided advice. If you have any questions, please contact the AVL Abogados team.
