Argentine provinces look to incentivize renewables

Bnamericas Published: Tuesday, May 26, 2020

Argentine provincial authorities are looking at several mechanisms to spur the growth of renewable generation despite severe macroeconomic challenges.

That was the key takeaway from a webinar organized by renewable lobby group Cader which brought together representatives from the provincial governments of Buenos Aires, Córdoba and Santa Fe.

Representatives agreed that financing matters were the principal roadblock for further development, as accessing affordable financing is extremely hard in the midst of Argentina’s attempt to restructure its foreign debt. The difficult economic situation has also meant provincial governments are not in a position to shoulder the needed investment, a problem exacerbated by the COVID-19 pandemic.

The tough financial situation is compounded by an unprecedented fall in power demand that has seen industrial consumption plummet by more than 30% compared to before lockdown measures.

According to Cader director Santiago Sajarov, Argentina has plentiful renewable resources. While it has great sun quality in the north and world-class wind quality in the south, agricultural activity helps the development of biomass and biogas, and access to mountain ranges with volcanic activity allows for geothermal development.

Sajarov pointed out the scalability of photovoltaic plants makes them especially suitable for deployment on a smaller scale. Since costs do not decrease substantially as the size of a plant increases, solar offers high competitiveness for small-sized projects. The fact regulation is advancing as more and more provinces adhere to the distributed generation framework means Cader sees smaller photovoltaic plants as having high potential until the macroeconomic situation stabilizes, paving the way for bigger projects.

According to Sergio Mansur, director of renewables in Córdoba, the province is looking into economic sectors, such as agriculture, where interested investors could be found. “We’re looking to seduce those sectors that have money today and bring them closer to renewable investment,” he said.

He added the province was considering adding a new regulation for projects that did not fit in the small distributed generation framework currently in place. Mansur said provincial authorities want to allow generation assets to be owned by a group of several small-scale investors in a consortium.

Meanwhile Jorge Caminos, from the ecosystem development and climate change department of Santa Fe, said the province’s challenges were twofold. First, it wants to provide a framework that can spur growth beyond solar parks, which have seen considerable development in the province, opening the door for new biomass and biogas projects.

Second, Santa Fe is looking to draft a new framework that can work for big industrial consumers interested in installing a renewable plant for self-consumption. Previous initiatives have been successful with residential consumers who want to generate their own energy, he said, but did not scale well to encompass larger-scale initiatives.

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