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Wind Energy Development in Argentina

Argentina’s wind energy production is growing, but with such vast tracts of land available for wind energy creation there is capacity for more rapid expansion. Currently, Argentina has an estimated wind energy capacity of 300 GW and has a current installed capacity of 3.291 GW which is created by 900 wind turbines on 57 farms, capable of supplying energy for 2.7 million homes or 10% of total electricity within the country. While this is significant, Argentina’s lack of grid investment, halting of the RenovAr project, and the lack of confidence in large-scale investment is slowing what could be a rapid transition.

 

A 2018 report from the Global Wind Energy Council offers several reasons for optimism within Argentina’s wind energy sector. These include how the contracted renewable projects from 2018 were expected to cover more than half of the renewable mandate by 2020 and how large users are switching to renewable generation. However, the problems that were facing the Argentinian wind industry in 2018, such as limited grid infrastructure, financing concerns, and requirements for transport and construction are present 5 years later. Walter Lanosa, a wind energy expert who spent 9 years as the CEO of the largest renewable generation company in Argentina, mentioned several of these problems. Lanosa writes, “the biggest obstacle for energy (not only in wind power) is legal certainty in long-term agreements and businesses.” Argentina’s problems with stability mean limited access to investment and slower wind energy development.

 

 


 

 

 

 

 

Argentina’s wind energy distribution is divided into 3 segments including purchases through CAMMESA (Wholesale Electricity Market Administration Company), self-generation, and MATER (Renewable Energy Term Market). The RenovAr project proved successful during its first few rounds, which makes the lack of a fourth RenovAr disappointing. Currently, most wind energy developments are the result of power purchase agreements or self-supply initiatives. Reports have found that companies are interested in purchasing renewable energy and power purchase agreements (PPAs) have already been signed in Argentina. This is partly due to the ease of PPAs under MATER, which has resulted in more renewable projects being able to enter the grid. The reasons for these partnerships include “price and supply security, corporate decarbonization, compliance with renewable targets, and peso liquidity.”

 

Argentina does provide grid priority to renewable energy over conventional electricity and has open access to the power transmission system. However, the necessity of large-scale improvements to grid infrastructure means that this priority may not necessarily accomplish what was intended. Giving priority to renewable energy in the grid does not do much good if there are no high voltage transmission lines. In regard to grid infrastructure, Lanosa believes that a major obstacle is “the lack of electrical infrastructure in the regions with the greatest wind potential (south of Buenos Aires and Patagonia).”

 

There are plenty of large-scale wind farms that demonstrate the feasibility of wind generation in Argentina. One of these is the Los Teros Project, which is operating in Azul, Buenos Aires. The project is divided into two farms; Los Teros 1 has an installed capacity of 123 MW and Los Teros 2 has an installed capacity of 52 MW. In total, this project operates 45 turbines that can power 237,000 homes. An interview with head operators at the Los Teros Wind farm confirmed the importance of improving the electrical grid. They explained how the country has extraordinary renewable resources (wind in the South and solar in the North), comparable to Vaca Muerta in terms of their potential energy contribution, which today cannot reach 50% of the demand because it is in the AMBA area. Enabling greater transportation capacity from the areas where these resources are to where the demand is will enable the development of new renewable energy projects, benefiting industry and the Argentine economy. This was reiterated in conversation with Lanosa, who described the importance of government actions which “encourage private investment and create conditions of stability and legal certainty in the transport network and in sustainable electricity generation.”

 

 

 

 

 

 

 

 

 

 

 

Photo Provided by YPF Luz

Despite the current limitations of the wind energy sector, several large projects are underway. These include a 300 MW wind farm funded by Pampa Energy, which will provide large users with power directly from the source. GENNIEA, the large-scale power supplier mentioned above, is currently working on two wind farms, La Elbita in the Buenos Aires Province and Tacota III in San Juan Province. Dow Chemical has also entered the Argentinian wind sector with the purchase of 9 MW of Wind Energy from PCR. A significant reason for the growth in renewable generation is the MATER law, which states “all users of electrical energy in the Argentine Republic must contribute to meeting the objectives of coverage of annual consumption with electrical energy from a renewable source.” Certain large-scale energy consumers are obliged to self-generate or partner with a renewable energy generator. Large-scale energy consumers have turned to renewables as wind power, and certain solar sites, provide the cheapest and most competitive renewable sources. 

 

 

 

 

 

 

 

 

 

Photo Provided by YPF Luz

Argentina has plenty of reasons to be optimistic about the deployment of wind energy across the country. The Mater Law, the incentives for companies to partner with renewable generators, and the vast tracts of Argentina ideal for wind energy encourage private investment in renewable growth. However, the government must now use its resources to expand the electrical grid, stabilize the investment environment, and increase its commitment to renewables.

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