RES licensing procedure revision plan troubling players

A new RES licensing model being worked on by the energy ministry, especially two aspects, one requiring letters of guarantee from investors even if they have previously obtained production certificates, and the other, offering licensing-procedure priority to investors who opt to negotiate and establish bilateral power purchase agreements (PPAs) with industrial consumers rather than secure fixed tariffs through RES auctions, are details troubling players.

Under current licensing rules, RES investors must submit letters of guarantee only when connection terms have been signed, in other words, at the very end of the procedure.

This order of things is saturating the market as players not fully committed to their investment plans are haphazardly submitting licensing applications and occupying capacity that is valuable for investors with serious intentions.

The energy ministry now intends to revise this procedure so that RES investors submit their letters of guarantee at the beginning of the licensing process.

Over the past few weeks, the energy ministry has examined the prospect of requiring investors, old and new, to forward letters of guarantee along with their producer certificate applications. This ministry plan, still lacking full clarity, has unsettled market players.

The ministry’s plan to offer favorable licensing procedure treatment to RES investors opting to negotiate PPAs with industrial consumers rather than seek fixed tariffs at auction has also raised concerns. The resulting monitoring effort to be needed could be complicated and uncertain, players and critics fear.