On October 16, 2025, the Electricity Regulation and Control Agency (“ARCONEL”) issued Regulation No. ARCONEL-005/25 (the “Regulation”), applicable to new Non-Conventional Renewable Energy Generation Plants (“CGRNC”) with a nominal capacity greater than 10 MW and less than or equal to 100 MW, which are not part of the Master Electricity Plan (“PME”) and are not subject to public selection processes.

The Regulation establishes the necessary provisions to:
(i) define the technical characteristics that new generation plants using Non-Conventional Renewable Energy (“ERNC”) sources must meet;
(ii) set out the requirements applicable to companies interested in their development, as well as the procedures for requesting, evaluating, and granting connection feasibility;
(iii) govern their development, operation, and dispatch;
(iv) determine the commercial treatment of the energy delivered by these plants; and
(v) establish the requirements related to generation information management.

1. Obligated Parties and Scope of Application

Companies that build, operate, and manage new Non-Conventional Renewable Energy (ERNC) generation projects within the specified capacity ranges; the Grid Operator to which the plants are connected; and the National Operator (“CENACE”) in its role of operational planning, dispatch, and settlement.

The Regulation does not apply to self-generators, distributed generation, self-supply projects, or projects operating in the Galápagos Islands.

2. Essential Requirements for CGRNC

In addition to the provisions already mentioned, CGRNC plants must:

• Connect in synchrony with the National Interconnected System (“SNI”) through a transmission system.
• In the case of intermittent sources (solar and wind), incorporate battery storage systems.
• Comply with the technical and operational standards established in the Operation Code, Connection Code, and the dispatch and operation regime of the SNI, as well as the real-time supervision and control requirements.

3. Administrative Authorizations

Interested companies must obtain from the Grid Operator a Preliminary Connection Feasibility Certificate, providing the requirements established in the regulation. Subsequently, they must request a Qualification Certificate from the Ministry of Environment and Energy (“MAE”).

Next, they must obtain the Enabling Title, following the simplified procedure set forth in the sectoral regulations. Finally, they must secure the Definitive Connection Feasibility Certificate.

The Grid Operator will receive applications for the Preliminary Connection Feasibility in chronological order until the remaining capacity in its network is fully allocated. Once that capacity is reached, additional applications will be recorded on a waiting list but will not be processed. Depending on whether the companies are related parties or not, there may be restrictions on the development of a CGRNC at the same connection point.

4. Capacity Increase and Subsequent Authorizations

Any capacity increase must undergo new feasibility procedures and remain within the range of >10 MW and ≤100 MW, with independent commercial metering for expansions of existing plants.

5. Construction, Connection Assets, and Supervision

The design, construction, installation, and financing of the plant, its interconnection line, and associated works are the exclusive responsibility of the company, in accordance with the Enabling Title and the standards of the Grid Operator. The equipment within the connection field must be transferred to the Grid Operator at no cost. The dedicated interconnection line will not be transferred.

6. Operation, Dispatch, and Maintenance

CENACE will dispatch CGRNC plants in accordance with the dispatch and operation regulations. CGRNC plants with storage systems must report in real time their active and reactive power, state of charge, and availability, and must comply with minimum efficiency and battery control parameters. ENACE may require minimum state of charge (SoC) reserves and define dispatch and recharge windows.

7. Commercial Regime: Preferential Price and Term

The Regulation establishes fixed preferential prices by technology, derived from the Total Levelized Cost of Energy (CNE), which will be paid during the preferential terms. These preferential terms range from 20 to 30 years, depending on the renewable energy technology.

8. Other provisions

ARCONEL, within a period of up to six (6) months from the issuance of the Regulation, will issue a regulation governing BESS and defining the ancillary services they may provide, including technical and commercial requirements and conditions.

CENACE must update its procedures based on the Regulation, applying the current regulations in those aspects that do not contravene the law, its regulations, and the Regulation.

For more information, contact us at the following emails:

• Rafael Valdivieso: rvaldivieso@bustamantefabara.com
• Gustavo Almeida: galmeida@bustamantefabara.com
• Bruno Pesantes: bpesantes@bustamantefabara.com