Argentina announces regional electricity market plans

Bnamericas Published: Friday, June 10, 2022

Argentina’s federal energy department is working to establish regional electricity markets in the country.

A central objective is generating power from renewable sources in the same geographic area where it will be consumed.

Cash-strapped Argentina has a goal of obtaining 20% of power from renewables by 2025. The goal is unlikely to be achieved as things stand, chiefly because of transmission restrictions hindering the addition of new capacity in the country’s northwest and southeast, which have the best renewable energy resources – vital to financial feasibility of projects. Demand for electricity from renewables is robust in the country, particularly from companies, such as exporters, with sustainability policies.

To achieve the 20% goal alone, about 2.6GW of new installed renewables capacity is needed, a generation sector chief told a seminar hosted Wednesday by local renewables chamber Cader to present a transmission sector report. And under 2040 renewables scenarios, about 40,000km of new lines is needed, which would more than double the current 36,000km.

According to a press release, federal energy chief Darío Martínez said: “The regional electricity markets are a great tool because they are going to contribute to this process of responding to stronger demand for electricity that our country needs …”

Officials have already announced associated initiatives. One is a call for expressions of interest in renewable energy generation and storage projects. Officials, who are mulling an eventual tender, are targeting parts of the country that rely the most on uneconomic power dispatches from diesel-fired plants.  

Under a related initiative, wholesale power market distribution agents and public distribution service providers can – to obtain power for their large users – enter into supply contracts directly with renewable energy generators.

A third initiative involves authorizing national or provincial public companies to enter into power-purchase agreements.

A successful and transparent renewable energy supply auction program, RenovAr – which spurred growth of the country's clean installed capacity – has ground to a halt.

ALSO READ: Could this solution unlock stalled Argentine renewables projects?

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