After much talk about attracting investment, Argentina’s government has set a date for its first electricity auction. The call for bids is aimed at covering electricity use during peak demand, in particular during summer months, and seeks to attract between 400 and 1,000 MW of combined-cycle thermal power.
While the full technical specs will be not be available until May 9th, the Ministry of Energy has advanced the following details. Bids will be in dollars and will be targeted to specific periods, such as the summer 2016/17, winter 2017, etc.
Winners will be signing contracts for 5 to 10 years with Cammesa, the wholesale agent, who will also be responsible for providing the fuel. Under these contracts, generators will also be compensated for reserve capacity and for variable, non-fuel costs. Unit size cannot fall below 10MW per unit, and 50MW per bid, as the government is seeking to avoid having to buy very expensive peak power.
Because of the compressed schedule set forth by the government, with the first block of demand scheduled to begin next December, the expectation is that the auction will attract existing generators offering expansions to their plants, rather than new investors. Siemens, General Electric, and Mitsubishi are lined up to sell the equipment.0