Argentina charts course for renewable energy.
Argentina, Latin America’s third largest power market with approximately 32,000 megawatts (MW) of installed capacity, faces the task of installing 7,000 MW, or 22.5% of its 2015 total capacity, in five years.
With the majority of Argentina’s current generation needs being met by costly imported fossil fuels, the nation has the economic incentive to begin exploiting its abundant renewable energy resources. This incentive translated into a new renewable energy law that requires that 8% of generation derive from renewable sources by 2018, and 20% by 2026.
Argentina’s Renewable Energy Law (27.191), signed by former President Cristina Fernández de Kirchner on October 15, 2015, strengthens prior legislation through tax exemptions and other mechanisms, and includes two new renewable promotion schemes with the most potential for impact: a new renewable energy fund (FODER), which will support renewable energy projects through financing programs and underwrite long term contracts by cosigning or providing guarantees for bankable power purchase agreements (PPAs); and renewable energy requirements for large energy users.
Driven by the need to wean itself off of expensive imported fuel, renewable portfolio standards (RPS) to achieve 8% renewable energy generation as a percent of national consumption were originally established in 2006. Renewable energy promotion through legislation, however, dates back to 1998, with the establishment of feed-in tariffs which allow customers to generate their own electricity using renewable technology and sell the electricity back to the grid.
Yet these and other similar initiatives have failed, partially as a result of market distortions including electricity price freezes and subsidies, which gave Argentina’s residential ratepayers some of the lowest rates globally (6.3 ¢ per kWh for residential users in 2014, compared to an average of 12.5 ¢ per kWh in the United States and 18.7 ¢ per kWh in neighboring Brazil). Artificial residential rates that represent just a fraction of the real cost of electricity have helped reduce the incentive for residential users to shift to distributed generation, limiting the likelihood of achieving the nation’s RPS.
Just 1% of electric generation in Argentina derived from wind and solar combined, compared to 63% from fossil fuels (mainly natural gas), 30% from hydroelectric sources, and 6% from its three nuclear power plants.
For Argentina, electric generation is at a crossroads. Electricity demand, which has doubled on a per capita basis since 1990 and increased at 5% annually for residential customers in the same period, is projected to continue to grow at a strong pace and necessitates a 7,000 MW of new generation capacity by 2021 to ensure reliability. The new 2015 legislation is designed to guarantee that renewable energy makes a significant contribution to new generating capacity. As such, the nation must promptly prove itself a viable option for renewable investment, a task it has not yet achieved.
At: http://oilprice.com/Energy/Energy-General/Argentina-Charts-Course-For-Renewable-Energy.html
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Besides hydroelectricity, which has been the country's second largest electricity source since the 1970s, the most developed type of renewable energy in Argentina is wind power.
Wind power capacity grew 10-fold from 2009 to 2014, to almost 300 MW. Global Wind Energy Council head Steve Sawyer recently described Argentina as having "the world’s best wind resources."
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