CAMMESA (Argentine Wholesale Electricity Market Clearing Company) (Spanish: Compañía Administradora del Mercado Eléctrico Mayorista S.A.) is an Argentinian company which operates the

wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...

energy market of the country. It was created by Executive

Decree A decree is a law, legal proclamation, usually issued by a head of state, judge, monarch, royal figure, or other relevant Authority, authorities, according to certain procedures. These procedures are usually defined by the constitution, Legislativ ...

in 1992 to operate the Argentine Interconnection system, planning the power generation required and managing energy dispatch by generators, and for regulation of the

spot Spot or SPOT may refer to: Places * Spot, North Carolina, a community in the United States * The Spot, New South Wales, a locality in Sydney, Australia * South Pole Traverse, sometimes called the South Pole Overland Traverse People * Spot Coll ...

and term wholesale electric energy markets. Despite being a private enterprise, as the retail

electricity sector in Argentina The electricity sector in Argentina constitutes the third largest power market in Latin America. It relies mostly on thermal generation (60% of installed capacity) and hydropower generation (36%). The prevailing natural gas-fired thermal genera ...

faces heavy state regulation including low tariffs, the company has been dependent on public subsidies for years. Energy generation costs are not fully passed through to final customers. The spread between the generation cost and the fixed tariffs is covered by CAMMESA, which then makes the company dependent on public subsidies to compensate the generation companies. Also, starting from 2013, all

thermal power A thermal power station, also known as a thermal power plant, is a type of power station in which the heat energy generated from various fuel sources (e.g., coal, natural gas, nuclear fuel, etc.) is converted to electrical energy. The heat ...

generation companies are required to buy any required fuel through CAMMESA. This restriction was only lifted for a short period between November 2018 and December 2019, when it was last put in place again.

History

In 1992, Argentina became one of the first countries to implement a comprehensive reform of its electricity sector. In the midst of several public companies privatizations in Argentina, the Electric Energy Regime law (Law 24.065) was passed. Three public companies were split into 27 generation companies, 7 transmission companies and several distribution companies. In its 35th article, the Law mandates the creation of a National Cargoes Dispatch, to be created in the legal form of a

sociedad anónima The abbreviation S.A. or SA designates a type of limited company in certain countries, most of which have a Romance languages, Romance language as their official language and operate a derivative of the 1804, Napoleonic, civil law (legal syste ...

(a private enterprise). This was implemented with the 1192

decree A decree is a law, legal proclamation, usually issued by a head of state, judge, monarch, royal figure, or other relevant Authority, authorities, according to certain procedures. These procedures are usually defined by the constitution, Legislativ ...

, which created CAMMESA. The law also created the Wholesale Energy Market of Argentina (Mercado Eléctrico Mayorista - MEM). This reform was based in the privatizations made in the United Kingdom Energy Sector in the 1990s. It aimed for a greater transparency, bringing increased

competition Competition is a rivalry where two or more parties strive for a common goal which cannot be shared: where one's gain is the other's loss (an example of which is a zero-sum game). Competition can arise between entities such as organisms, indi ...

and investments. Since the 2001-2000 crisis and devaluation of

peso The peso is the monetary unit of several Hispanophone, Spanish-speaking countries in Latin America, as well as the Philippines. Originating in the Spanish Empire, the word translates to "weight". In most countries of the Americas, the symbol com ...

, the

faces heavy price regulations which froze all inflation-indexation mechanisms. The wholesale electricity price is fixed since that year using the

natural gas Natural gas (also fossil gas, methane gas, and gas) is a naturally occurring compound of gaseous hydrocarbons, primarily methane (95%), small amounts of higher alkanes, and traces of carbon dioxide and nitrogen, hydrogen sulfide and helium ...

variable power production cost (regardless different power plants using different fuels). This put CAMMESA in a difficult spot, since it had to pay the electricity generator companies Since 2013 the company has been centralizing all the fuel purchases for power generation, excepting a brief period between 2018 and 2019 when every power plant could, if they wanted, choose a different provider.

Ownership

CAMMESA is a private company. It is owned in an 80% by the different companies comprising the Wholesale Energy Market of Argentina (power generation and transport companies, as well as the Association of Large Energy Users), and the remaining 20% of shares are in the hands of the Argentine government. The board is composed by ten regular and ten alternate directors. Each shareholder (which are generation, transmission and distribution companies from the wholesale energy market, as well as large energy users) are entitled to appoint two regular and two alternate directors. The other directors are appointed by the government, one is the Secretary of Energy, and the last member is chosen with the assent of the private shareholders, but subject to the

veto A veto is a legal power to unilaterally stop an official action. In the most typical case, a president (government title), president or monarch vetoes a bill (law), bill to stop it from becoming statutory law, law. In many countries, veto powe ...

of the Secretary of Energy. In the event of a tie, these votes of the later two members are worth the double.

Operation

The company performs several tasks in the Argentinian energy sector, among which are: The dispatch of energy into the

Interconnection In telecommunications, interconnection is the physical linking of a carrier's network with equipment or facilities not belonging to that network. The term may refer to a connection between a carrier's facilities and the equipment belonging to its ...

, planning energy capacity needs and optimizing energy use, monitoring the operation of the wholesale term market, the exchange of electric power with other countries, and purchasing and administrating fuels for the wholesale market thermal generators.

RenovAr

In 2016, the 27.191 law created a stimulus programme for renewable energies. The act establishes a goals system for yearly renewable energies share in the

Energy mix The energy mix is a group of different primary energy, primary energy sources from which secondary energy for direct use - such as electricity - is produced. Energy mix refers to all direct uses of energy, such as transportation and housing, and ...

of Argentina to reach a 20% share in December 2025.{{Cite book, url=http://www.energia.gob.ar/contenidos/archivos/Reorganizacion/sintesis_balance/2019-12-09_Balance_de_Gestion_en_Energia_2016-2019_final_y_anexo_pub_.pdf, title=Balance de gestión en energía 2016—2019, publisher=Secretary of Energy of Argentina, year=2019, location=Buenos Aires, language=es-AR, trans-title=Report of Energy Administration in the 2016-2019 period To follow on these goals, the RenovAr (renovate) programme was creating, granting tax benefits and financing stimulus. It is run by CAMMESA on behalf of the Secretary of Energy. Several Rounds of public bids for renewable energy projects were held, in which companies present investment plans and the price of the energy output. The government establishes a maximum US$/MW/h price for each renewable technology, as well as output ranges desired.

Round 1

The first round was held on 2016. 59 projects were approved, for over 2400 MW power.

Round 2

The second round was held in August 2017, and approved 88 projects for 2042 MW power.

References

External links

Official Website
(in Spanish) Electric power companies of Argentina 1992 establishments in Argentina