ENVIRONMENT – Policy & Market


Policy & Market

The growth of the industrial, commercial, financial, governmental, municipal, and other sectors in Latin America leads to a growing and progressive demand of energy that requires the availability of a proper framework both in terms of Policies and regulations capable of sustainably help in managing this resource.

In 2005, Argentina created the National Strategic Plan for Wind Energy. The plan aimed to install 300MW of wind power in three years with 80% local component. Fiscal incentives were included in both Law 26190 and its predecessor Law 25019, which allowed for deferred tax payments and provided 15 years of “fiscal stability” to existing projects. Whereby, during that period, the overall fiscal burden of renewable energy projects cannot be increased by means of augmented, modified, new or additional taxes and fees. Decree 562/2009, which regulates Law 26190, provided for accelerated depreciation and for VAT refunds after 3 years. Federal laws on renewable energy invites provinces to adhere to the legislation and develop their own province-level incentives. For instance, Decree 562/2009 developing Law 26190 of 2006 invited provinces to adhere to Law 25019 and to establish provincial fiscal incentives such as exemptions from revenue tax, local and administrative fees and property taxes. [Source: IRENA International Renewable Energy Agency]

Uruguay has a comprehensive, long-term energy plan - the National Energy Policy 2005-2030 - with the overall objective to diversify the energy mix, reduce dependency from fossil fuels, improve energy efficiency and increase the use of endogenous resources, mostly renewables. The plan sets a target of 50% primary energy from renewable energy sources by 2015. This includes renewable energy for electricity generation, industrial and domestic heat, and transport. The 2008 National Energy Policy set a target 15% electricity from wind power, biomass residues and mini-hydro, which has been amply surpassed. Auctions have been the main instrument for the promotion of renewable electricity in Uruguay, whereby the government-owned national electric company (UTE) awards power purchase agreements (PPAs) to successful bidders. Law 16906 of 1998 on the promotion of investments provides the framework for fiscal incentives in Uruguay. Decree 354/009 provides income tax reductions for renewable electricity generation, renewable energy service providers and manufacturing of renewable energy equipment. [Source: IRENA International Renewable Energy Agency]

The regulatory framework in Guatemala is particularly related to the promotion and regulation of the activities within the electricity subsector:
- the General Electricity Law (Decree 93-96 of the Congress of the Republic of Guatemala) and its Regulation (Governmental Agreement 256-97 and its amendments);
- the Wholesale Market Manager Regulation (Governmental Agreement 299-98);
- the Governmental Agreement 110-2002;
- the Governmental Agreement 244-2003,
- the Law of Incentives for the Development of Renewable Energy Projects (Decree 52-2003 of the Congress of the Republic of Guatemala) and its Regulation (Governmental Agreement 211-2005;
- the ministerial accords issued by MEM;
- the norms and resolutions issued by the National Commission of Electrical Energy (CNEE, Spanish initials) and the Wholesale Market Manager (AMM, Spanish initials);
- the Law for the Protection and Improvement of the Environment, Decree 68-86.


The strength of synergy