Source: Electricidad Magazine
The future of the price stabilization fund, the HVDC transmission project and electricity portability are some of the initiatives mentioned in the consultant’s monthly report.
The possible increase in tariffs due to the depletion of the PEC, tenders, ongoing tariff processes and the development of the HVDC transmission line are some of the challenges that the next government will have within the electricity sector, according to the monthly report of Systep Engineering .
According to the consultant, one of the priority issues is the “probable rate hikes for regulated customers due to the depletion of the rate stabilization fund, which was a mechanism defined by law 21.1856 approved in November 2019.”
“Currently there are more than 1,000 million USD owed to generating companies, being that such value cannot exceed the limit of 1,350 million. In addition, no more balances can be accumulated after the end of the first semester of 2023”, which is added to Law 21.340 that prohibits the cut of basic services until December 2021, so “we will have to see what position the future authority will take, considering that more than 275,000 million pesos are already owed to the distribution companies for this concept”.
“Another challenge to consider is to promote the development of the HVDC line, either, for example, being a mediator in the relations with the communities located in the places where the line will pass, promote further development of HVDC infrastructure, seek a new tender for the project in case the current one is out of the reserve price, etc.,” the document states, highlighting the importance of this work for the decarbonization process.
“Also, the next administration will have to determine whether to carry out or modify the conditions of the energy tender planned for next year. The current Executive Secretary of the CNE has indicated his intention to publish in the coming months the preliminary bases to initiate a bidding process of 7,500 GWh/year, with supply starting in 2027 and 2028, a process that would contemplate for the first time a quota reserved for storage,” the report states.
Also mentioned is the processing of the electricity portability bill and the priority assigned to it by the future administration, together with the timetable for the decarbonization of the electricity system, through the withdrawal of coal-fired power plants.
