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Energy Alert – October 2024

ALERT – ENERGY

By Resolution No. 173-2024-OS/CD dated October 08, 2024, the OSINERGMIN approved the new Technical Procedure of the COES No. 20 “Entry, Modification and Withdrawal of SEIN Facilities” (“New PR-20”) and modified numeral 5.2.1 of the Technical Procedure of the COES No. 46 “Guarantees and constitution of trusts for the Wholesale Electricity Market” (“PR-46”). The New PR-20 in force since October 09, 2024 will not be applicable to the approval processes of EPO*, EO**, integration and Commercial Operation that have been initiated before its entry into force. Likewise, it is established that EO approval applications initiated prior to this date will be governed by the approved EPO design.

The following are the main changes introduced by the new PR-20:

1. Power plants ≥ 50 MW connected to the SEIN must have Commercial Operation (num. 8.2.13).

2. New term for the scope document to prepare the EPO and EO (num. 9.5 and 10.6). It will be valid for 6 months, except in special cases.

3. New exception to the loss of validity of the EPO (num. 9.13.2). In cases where the project is not connected the year after the EPO is approved, the EPO will not be forfeited if the Project Manager obtained or initiated the procedure for approval of the EO within that period. In these cases, the validity of the EPO is extended for the same term of the EO.

4. New cause for loss of validity of the EPO due to technical unfeasibility (num. 9.13.5). When a System condition or future modification of the technical characteristics of the Connection Point approved in the EPO has been modified or is noticed, and the COES determines that this makes the connection of the project technically unfeasible.

5. Possibility of managing a new EPO with an existing EPO (num. 9.13). A new EPO can be managed only once without the original EPO losing its validity. The original EPO will remain valid for the period foreseen in its certificate, or will expire when the new EPO is approved. It will not be possible to extend the validity of an EPO or maintain two EPOs in force. The new EPO will not consider the facilities of the original EPO. In order to submit a third EPO, the current EPO must be waived and will be considered as a new project.

6. New provisions applicable to EPOs prepared by COES included in the preliminary drafts of the Transmission Plan (num. 9.14). Deadlines were established for the presentation and absolution of the observations of the Third Parties involved to the EPOs, as well as the obligation of the COES to support the observations that were not accepted. The EPOs will be valid for two years, and may be extended for two additional years. In cases of termination of the validity of items 9.13.3 (modification of technical characteristics) and 9.13.5 (technical unfeasibility of the project), it may be requested to maintain the validity of the EPO.

7. If the EPO is subject to any of the grounds for termination of the EPO, the EO will be rejected (num. 10.10). It is established that COES will reject the EO if the EPO of the project is in any of its grounds for termination of validity, without any exception or consideration whatsoever. Previously, the possibility of redoing electrical studies was allowed to demonstrate that the quality, reliability, safety and operation of the SEIN was not affected, for which the purchase of additional equipment could be arranged.

8. It is necessary to have a valid EPO and EO to start the SEIN integration process (num. 11.2). Note that according to num. 9.13.2, the validity of the EPO is extended if the EO is approved during said period.

9. The procedure to modify the Technical Data Sheets is regulated (num 11.7). In addition to establishing deadlines and requirements, specific assumptions are established in case of adding or changing operation modes.

10. The scope of the Approval Tests is specified (num. 11.9 and Annex 5). These tests are mandatory for plants with power ≥ 20 MW***, storage systems and FACTS equipment. Annex 5 establishes (i) the requirements of the consulting company that prepares the homologation tests, (ii) the cases in which the tests must be repeated or updated, (iii) the steps to coordinate the scheduling of the tests, (iv) the technical information that must be submitted for the performance of the tests, (v) the capacities that the measuring equipment to be used in the tests must have; and, (vi) who must be present during these tests.

11.The determination of the provisional cost applicable to thermoelectric facilities without information related to variable costs is modified ( 12.6).

12. The plants connected to the SEIN that did not require EPO or EO may request Commercial Operation (num. 12.9). Among the requirements to be submitted, it must be proven that the plant is electrically connected to the SEIN.

13. The commercial operation will not be concluded due to unavailability for three consecutive months in two new cases (num. 13.3). Up to a maximum period of 18 months, if the generator with a single unit or plant before the 3 months are completed, waives the income for power and constitutes guarantees according to PR-46; or, the unit or plant is under major maintenance approved in the Annual Intervention Program.

14. Regulation for Storage Systems – Battery Energy Storage Systems or BESS. The active energy storage systems will be part of the Commissioning Tests (num. 11.5), and must undergo the Approval Tests (num. 11.9 and Annex 5). The use of storage systems and BESS is incorporated to (i) emulate synthetic inertia; and, (ii) provide Frequency Regulation.

15. Non-Conventional Generation Plants must provide synthetic inertia (Third Transitory Complementary Provision; Annex 1, Chapter 4, num. 4.4.4). All plants (including solar and wind power plants) that enter into service or commercial operation as of January 1, 2028 must provide synthetic inertia, without exception. For this purpose, COES will submit a technical report by June 30, 2025 containing, among others, a proposal of the minimum nominal power contribution period.

16. The “Special Protection Scheme” for the control and/or disconnection of generation is incorporated as a definition (num. 6.10). It allows the automatic detection and control of abnormal operating conditions to avoid disturbances in the system. It is also established as a new design criterion that the conventional generation units that are prepared to participate in the Special Protection Scheme (Annex 1 num.4.3.1).

Finally, the modification of PR-46 indicates that the same rule of guarantees of the Distributing Participants and Large Free Users will be applied to the Generating Participants that (i) fail to pay for 2 consecutive or alternate months (without time limit when previously such failure was verified in periods of 36 months), (ii) in the case of num. 13.3.1 (exception to the conclusion of commercial operation).

*EPO: Pre-Operational Study.
**EOE: Operability Study.
***Exceptionally, COES may include plants with less power or other facilities to carry out homologation tests.