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The Energy Secretariat will publish in the first days of next week a resolution to cancel the contracts of the TerConf tender, which included projects for 3,340 MW for works estimated at US$ 4,000 million. Now, the government is forced to make a quick decision to expand the thermoelectric generation park.
The government will cancel a multimillion-dollar tender carried out by the previous government to expand the electricity generation sector. EconoJournal accessed Resolution 69884172, which is already in the Document Management System (GDE) waiting to be signed and published in the Official Gazette. This is the call for Thermal Generation Reliability Supply Contracts (TerConf), a tender launched in the last four months of 2023 to add 3,340 megawatts (MW) of power, which involved works for an investment of about US$ 4,000 million.
Although the projects were awarded, the administration of Secretary Eduardo Rodríguez Chirillo did not move forward with the implementation of the initiatives. For this reason, the tender was in a legal limbo, with no certainty about its continuity. Until now: despite the fact that in recent weeks private sources speculated about the possibility of relaunching the construction of the new plants, the government will finally cancel the tender.
It remains to be seen whether the decision will not entail some kind of legal risk for the State, given that the projects had already been awarded by resolution at the end of Flavia Royóns administration and some private companies had even begun to deposit to Cammesa, the company that manages the Wholesale Electricity Market (MEM), as a guarantee to ensure a future place in the energy dispatch.
In February, Rodríguez Chirillo had temporarily suspended the process of signing the contracts, which had been awarded in November, when Alberto Fernández left the government. The halt to the tender occurred because Javier Mileis government intends to move forward with a restructuring of the electricity sector .
The note accessed by this media, which bears the signature of the Undersecretary of Electric Energy, Damián Sanfilippo, will be officially published in the next few hours and states: “Resolutions Nos. 621/2023 and 961/2023 of the Energy Secretariat are hereby repealed. National and International Open Call “TerCONF”.
Resolution
This media also had access to the draft of a second resolution from the Energy Secretariat that formally cancels the tender and instructs Cammesa to “refund the amounts corresponding to the Payment Scheme provided for in Clause 22 (Guarantees) of the Terms and Conditions of the TerCONF Call, as an initial payment for the award and monthly payments for maintaining the award to the projects that had been awarded in a timely manner.”
The third article of the resolution, which will be published next week, establishes that Cammesa must also restore the Bid Maintenance Guarantee of the call for tenders. “The restoration will be subject to the presentation of a waiver by the company that owns the project to any administrative, judicial, extrajudicial or arbitration right, action or claim,” the text clarifies.
Not surprising
The suspension of the TerCONF tender is not surprising in the sector, as it was a possibility that had been circulating, according to what EconoJournal was able to find out from private sources. In any case, the State is now obliged to react quickly to expand the electricity generation sector as urgently as possible, considering above all that in the next 18 months if this does not happen, that is, if generation is not expanded, there will be supply problems in various nodes of the country.
In this context, the government must make a quick decision to ensure the expansion of the thermoelectric park. The Executive Branch is already exploring a scheme similar to that which exists in the Thermal Market for Renewable Energies (Mater), but for thermal generation.
Most electricity generation and distribution companies believe that the market is not mature at present due to the volatility that exists in the macroeconomic sphere and the high level of subsidies that the State still injects into the electricity sector, so that residential demand - through distributors - contracts energy produced in new generation projects.
It remains to be seen whether the major energy users, who are the ones that support the Maters operation, will also have the desire to allow the expansion of the generation market.
What was the TerCONF tender?
The TerCONF tender was launched in 2023 to expand the thermal generation fleet. The intention was to add 3,340 MW of power, 10% of the generation fleet currently installed. There was around US$ 4 billion of investment in works.
One of the objectives is to ensure long-term supply, with efficient generation and equipment modernization. Another goal of TerCONF was to reinforce critical nodes of the Argentine Interconnection System (SADI), especially in the Metropolitan Area of ??Buenos Aires (AMBA) and other regions where the operating conditions of the system need to be improved. The successful bidders had signed a PPA (Power Purchase Agreement) for supply with Cammesa. |
