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Analysis of concession contracts for 22 hydroelectric dams located in 8 provinces begins


CE Noticias Financieras  

 

    (By Ignacio Ortiz) The future of 22 hydroelectric dams whose concession expiration date will start operating as from August 2023, after 30 years of private management, has already entered a stage of debate and definitions regarding the continuity in private hands or the return to state management, to which is added the claim of the provinces to have a greater interference in the matter.

    Official sources explained that the options initially under study are to extend the concessions of the current operators in case they are interested; to advance in new contracts with other private operators; or to recover the national State management lost after the privatization process carried out in the first years of the 90s.

    This definition is not minor, taking into account that although the hydroelectric power plants in the sector are adequately maintained, it is expected that the generating park will require important investments for life extension, capacity expansion and efficiency improvement.

    These investments would not include the maintenance of civil works, which are rigorously carried out by the Dam Safety Regulatory Agency (Orsep).

    To the set of options under analysis, in the last few months, several provinces have been demanding to be part of this new management of the dams, arguing that the 1994 Constitution granted the states the power over their natural resources, in this case the water of their rivers.

    The proposal is led, in particular, by the provinces of Neuquén and Río Negro, in whose territories are built the dams whose concessions begin to expire in August 2023, and which at the same time account for 67% of the electricity produced by the hydroelectric power plants.

    These are the Alicurá (1,000 Mw) hydroelectric complexes, currently operated by AES Argentina; El Chocón (1,200 Mw) and Arroyito (120 Mw), operated by Enel Generación; Planicie Banderita (450 Mw), operated by Oroazul Energy; and Piedra del Águila (1,400 Mw), operated by Central Puerto, all of them with concession expiration dates scheduled for the second half of next year.

    Under this agenda, the analysis of the Concessioned Hydroelectric Developments Work Team (Etahc) recently formed with representatives of the Secretariat of Energy, the Wholesale Electricity Market Administration Company (Cammesa), the National Electricity Regulatory Entity (Enre) and the company Energía Argentina (former Ieasa) began.

    Etahc will be in charge of the integral survey of the twenty-two hydroelectric exploitation concessions in the eight provinces, with a total installed power of 5.8 GW.

    As a whole, the national and binational hydroelectric developments, together with the small hydroelectric undertakings (PAH), contribute approximately 20% of the total generation in the Wholesale Electricity Market (MEM), with an installed power of more than 10.8 GW.

    Among the missions assigned to them, the Etahc must prepare a report detailing the status of each concession in its technical, economic, legal and environmental aspects, in view of the upcoming expiration of their respective contracts.

    At the beginning of the year, authorities of the provincial governments of Neuquén and Río Negro agreed to form their own commission to analyze and advance in proposals for action and to generate the appropriate legal-institutional instruments to present to the national government.

    The provinces are looking for alternative schemes to be implemented for the administration, operation, maintenance and exploitation of the hydroelectric plants located on the Limay and Neuquén rivers, taking into account water use regulations and environmental issues related to the resource.

    Both Patagonian provinces include in their claim the application of the so-called Comahue Tariff which, as the main energy generators of the country, would allow them an electricity consumption at differential prices, which could mean a reduction of between 15% and 40%.

    The possibility of the provinces having the management of the dams faces an important legal obstacle since the assets are registered under the ownership of the Nation.

    Industry experts consider that the only viable way for them to pass to the provinces would be through a donation by the National Government, which could only be done through a law passed by the National Congress that would endorse the release of these assets.

    The way in which the concessions that expire next year are resolved will set the way for what could also happen with Los Nihuiles I, II and III dams, whose contract expires in 2024, to which Agua del Toro, Los Reyunos, El Tigre, Río Hondo and Los Quiroga will be added later on.

    In June 2025 the contract for the Futeleufú dam expires; and in November those of Cabra Corral and El Tunal; in March 2026 that of Ullum; and in July the concession of El Cadillal, Escaba and Pueblo Viejo.

    Pichi Picún Leufú, in August 2029, is the last concession contract expiration date.

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