Southern Cone watch: Uruguay power imports, Chile tender, Argentina bond

By importing electricity from Brazil, drought-hit Uruguay is reducing reliance on thermoelectric plants and so saving around US$800,000 a day, energy consultancy SEG Ingeniería said in a tweet.

Brazilian power – with prices ranging between US$60 and US$100/MWh – is substituting some local thermoelectric output, which can cost as much as around US$320/MWh.

Uruguay, along with other parts of the Southern Cone, is suffering from drought, impacting production from hydroelectric plants Río Negro and Salto Grande. Last month, production from the two plants accounted for 21% of generation, compared with a normal contribution of about 45%.     

State power generator UTE said that over the first five weeks or so of 2023, thermopower accounted for around 28% of generation and wind 39%. In years with normal rainfall, electricity from renewable sources (hydropower, wind, solar and biomass) accounts for around 97% of generation.

Normal rainfall patterns are expected to return in March or April, UTE said last week.

Underscoring the importance of energy integration, in 2021 Uruguay helped Brazil cope with a severe drought by ramping up exports. 

Uruguay exported US$222mn in electricity in 2022. Argentina was the main buyer, chiefly during the Southern Cone’s winter period.

ALSO READ: How and when Uruguay plans to expand its power generation park

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Chile’s grid coordinator CEN has advanced plans for a tender of voltage regulation services.

Officials have held two associated webinars for interested parties ahead of the launch, due for March, according to local media outlet Energía Estratégica

"We need to prepare the electric power grid for an operation with 100% renewable supply by the year 2030," Ernesto Huber, CEN’s executive director, said recently. Tendering out these kinds of services is expected to improve the grid's stability and robustness, he added, and help CEN manage the grid's increasing complexity. 

CEN has a transmission auction process underway and, in parallel, put forward US$391mn in new projects under its proposed 2023 expansion plan. CEN's proposal is the first step in a long process to incorporate new transmission projects in Chile. After energy regulator CNE receives a proposal, it asks the electric power industry to propose additional projects to add to the 2023 pipeline. After CNE issues a report, the projects can be tendered out for construction.

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Argentine private sector power generator Genneia sold US$73mn in green bonds.

Proceeds from the placement will be used to finance the 104MW first-phase construction of 162MW Buenos Aires province wind project La Elbita and 60MW San Juan province solar park Tocota III.

The projects are in the construction phase, Genneia said in a statement. 

Targeting the private power-purchase agreement (PPA) market, the first two phases of La Elibita, and Tocota III, have secured transmission priority dispatch capacity.

Genneia, Argentina’s biggest renewable energy player by output, is executing a US$350mn investment plan, after spending more than US$1.1bn in 2016-21.

With 784MW of wind and 160MW solar, the company accounts for 23% of Argentina’s installed wind capacity and 7.5% of its solar capacity. 

In related power sector news, mixed ownership power company YPF Luz also recently sold debt to finance a renewables project targeting the private PPA market, while private player Pampa Energía said it would invest US$500mn in a 300MW wind park in Buenos Aires province.

Projects conceived to supply large users under private PPAs are driving renewables growth in Argentina. Nevertheless, the government has announced a new auction of projects that will be awarded 15-year supply contracts with wholesale market administrator Cammesa, with a premium paid for those that can inject power during peak times.