users of joint venture they will have to pay $5 billion in cost overruns and surpluses after the rejection of the state electricity company to the offers presented by the wind energy generating companies to provide electricity to Uruguay, according to the director by Open Town Hall (CA), Enrique Pees Boz.
The goal of the National Administration of Power Plants and State Electric Transmissions (UTE) was to replace the current contracts, signed between 2012 and 2018 with a duration between 20 and 30 years, for the purchase of energy, which establishes the acquisition of the energy generated at a fixed price.
There were 16 companies that presented themselves, but the board of directors of the state company was not convinced by any, despite the fact that the renegotiation would have meant a savings of 15 million dollars in a context in which the purchase of electricity will soon exceed 50% in the country.
Faced with this situation, Pées Boz prepared a report in which it indicated that the current contracts are ruinous for Uruguay and that they will end up affecting UTE if the renegotiation is not achieved.
What does the Cabildo Abierto denounce about UTE?
According to the director of UTE by Cabildo Abierto, the proposal of the Uruguayan Association of Private Electric Power Generators (Augpee) would result in a real increase of more than 15% in electricity rates in the country. This, due to the fact that the entity intends to supply directly to the large clients of UTE but without paying the corresponding amount for the use of the public transmission networks.
In this way, the state company would suffer a double prejudice: on the one hand, you would lose income from large customers; and, on the other, also the rates charged to the generators.
This was stated by Peéz Boz in his report, in which he also stated that the extra costs transferred in the rates in recent years they were 120 million dollars in solar energy and 760 million dollars in wind energy.
In this sense, the prices of solar energy that UTE currently pays are higher than 120 dollars per unit (MWh) and the commitments to pay are higher than 90 dollars per MWh for the private production of wind energy, when today technological evolution would allow buy them at $40 and $38, respectively.
The matter does not end there for the lobbyist director of the state company, but also points out that, during the next years of validity of the PPA contractsthe charges in the UTE invoices to its users will include 840 million dollars in compensation for investments to private companies. To this will be added 2,100 million dollars for overpricing in wind energy and another 612 million dollars for solar energy.
This means, according to Pées Boz, a cost to families and companies of 3,550 million dollars, at a rate of 240 million dollars annually. “A new conclusion: if not having to pay premiums and surpluses to the PPA Contracts, UTE could choose to reduce rates, double its annual investments or something in between,” he asserted.
That would add to the $1.23 billion lost in the 2015-2022 period.
Source: Ambito
