Electricity Coordinator rejects renewable energy company in insolvency to lease assets

The Electricity Coordinator made a key decision regarding the new chapter written a few days ago by Ibereólica Cabo Leones II (ICLII), one of the renewable energy companies that declared insolvency and surprised with the leasing of its assets, unleashing the debate in the industry.

According to letters issued this Monday afternoon, to which DF had access, the agency decided to reject Ibereólica Cabo Leones II's petition. This, because the company is suspended in the short term market, so in order to manage the request it must pay all debts and update the guarantee ticket to re-enter the market in question.

"It is not possible to process your request because it is necessary to have the background information that shows that both the replaced company (outgoing) and the replacement company (incoming) are authorized to participate in the short-term market," reads an excerpt from the letter addressed to ICLII and Enerbosch.

It should be recalled that Ibereólica Cabo Leones II (and GPG Solar Chile 2017 SpA, informed the Coordinator that last Monday they leased their assets to Enerbosch for two years. In the first case, the replacement will be with respect to the Cabo Leones II wind farm under the lease agreement signed on November 7 between ICLII (as lessor) and Enerbosch (as lessee). In the second case, Enerbosch will replace it as coordinator of the San Pedro photovoltaic farm.

Acciona's warning

The controversy over the lease of the assets to a third party had already raised the alarm in the industry. Two days later, in fact, Acciona sent a letter to the executive director of the Electricity Coordinator, Ernesto Huber, asking him to reject the requests.

The reason? According to the letter, since October 8 it has been suspended from participating in the short-term market and, therefore, "we understand that Ibereólica Cabo Leones II, through the figure of replacement, would try to avoid the economic consequences of its exclusion from the market and, in general, from all its current or future responsibilities and obligations, as coordinator and as partial or total owner of the Cabo Leones II wind farm and the San Pedro photovoltaic farm".

To which it adds that Ibereólica Cabo Leones II backed its contracts in the 2015/01 tender with the generation produced by the Cabo Leones II wind farm and the San Pedro photovoltaic farm, adding that "if the replacement request submitted by Ibereólica Cabo Leones II is accepted, the contracts with the distribution concessionaires will not be fulfilled by Ibereólica Cabo Leones II, which could trigger the early termination of the same".

"In view of the possible effects on other agents of the electricity market that the approval of the requested replacements could generate (...) both in the short-term market and with respect to all the generators that have supply contracts with the distribution concessionaires and that we will have to assume the higher costs of energy supply derived from the contractual breach of Ibereólica Cabo Leones II, which could also jeopardize the due compliance of the payment chain", Acciona states.