Bill to promote private initiative in the renewable energy transition

On September 30, 2024, the President of the Republic submitted the ” Law to Promote Private Initiative in the Renewable Energy Transition” bill (the “Bill”) to the Legislature. It is classified as urgent in economic matters and must be processed within 30 calendar days.

Below are the key points of the Bill:

  • The State will establish specific incentives for private investment projects in electricity generation using non-conventional renewable sources (e.g., solar, wind, geothermal, biomass, tidal, and small-scale hydroelectric). The Bill does not specify these incentives.
  • Electric distribution and commercialization companies can enter into long-term Power Purchase Agreements (PPA) with private generators, backed by State guarantees or trusts.
  • For priority projects outlined in the Master Electricity Plan (“PME”), the Ministry of Energy (“MEM”) will conduct public selection processes.
  • Private projects not included in the PME and under 100MW may be developed with prior MEM authorization. Private projects over 100MW will require public selection for delegation.
  • The State may grant special incentives to private investors for projects with a high-capacity factor and based on non-conventional renewable energy. The Bill does not specify these incentives.
  • Approval from the Ministry of Finance is necessary to provide incentives, such as exemptions, tax privileges, or state obligations that are not budgeted and affect the General State Budget.
  • Thermoelectric generators must present transition plans to clean technologies, including natural gas use, and develop hybrid projects combining thermal and renewable energy. The State will facilitate the granting of licenses for natural gas imports.
  • Private projects with a 10 MW limit, either in the permitting phase or in operation, may request permit reviews or power adjustments, respectively, to comply with the new limits of the Bill.

 

Carlos Torres, Senior Associate at CorralRosales
ctorres@corralrosales.com
+593 2 2567676

Mario Fernández, Associate at CorralRosales
mfernandez@corralrosales.com
+593 2 2544144

 

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DISCLAIMER: The previous text has been prepared for informational purposes. CorralRosales is not responsible for any loss or damage caused as a result of having acted or stopped acting based on the information contained in this document. Any additional determined situation requires the specific opinion and concept of the firm.

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