Lack of infra works hampers Argentina solar park start-up

Because the electricity regulator of Argentina’s San Juan province, EPRE, has not completed infrastructure to connect the 100MW Guañizuil II A solar plant to the grid, the entity cannot start generating power, a person close to the process, requesting anonymity, told BNamericas.

Construction for the park, a JV between Norway’s Scatec Solar and Equinor, finished mid year. Cold testing is completed, but not the hot tests necessary for the start of commercial operations, as works on a 500kV line and the expansion of the Rodeo Iglesia transformer station remain pending.

While registering progress of 95%, a completion date for these works has not been published due to mobility restrictions to stem the coronavirus pandemic.

“We cannot give a date, although we are close to finishing, because we have to bring technicians from abroad to set up the equipment and install some more things,” EPRE president Jorge Rivera Prudencio told BNamericas.

Originally, the entity hoped to start operations at the Rodeo Iglesia station by December 2019, but after several delays EPRE aimed for a June start-up.

However, this was not an immediate problem because adjustments with China’s Huawei and the US’ NEXTracker had to be made for the hot tests.

But EPRE had to paralyze works for a month because of the national quarantine imposed in March. And even after works resumed, faulty material, personnel mobilization and equipment import problems hampered progress.

The impact of the delay

While the start of commercial operations in June is stipulated in the contract with wholesale market administrator Cammesa, the contract also anticipates delays, protecting the JV from any fines. Still, the delays impact the local unit’s finances.

The JV already wanted to execute the mandatory take-or-pay purchase clause of energy the park was to generate from June, but could not do so because commercial operations haven’t started.

And Cammesa has dismissed demands for collecting the PPA price of US$41.76/MWh the unit obtained in the RenovAr 2.5 tender in 2017.

This lack of funds and Argentina's foreign exchange restrictions have made it impossible for the JV to repay the US$60mn Equinor loan which financed the park.

Scatec and Equinor bought the Guañizuil II A project from Portugal's Martifer and Chile's Lader in June 2018, which had obtained the contract in the RenovAr 2.5 auction.