Former Argentine energy ministers blast govt over project approvals

Monday, September 1, 2014

A group of eight former Argentine energy ministers published a document blasting the energy policies of President Cristina Fernández.

The document criticized national energy company Enarsa for what the eight consider to be overuse of an on-site power generation program known as GEED. Through GEED, Enarsa awards contracts for mobile power generation units.

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Enarsa has issued six GEED calls since 2007 and is planning a seventh, according to the document, which said that GEED accounts for 1.15GW of available capacity to date.

Enarsa now plans to incorporate another 1GW of GEED capacity through a selection process of "doubtful transparency," the former ministers said.

The document argued that GEED, originally implemented as a short-term solution to curb outages, has been "perverted." On-site generation is an expensive option that should only be used in emergencies, the eight said.

The letter also questioned two large-scale generation contracts recently awarded by Enarsa – the 1.74GW Néstor Kirchner-Jorge Cepernic hydro plant in Santa Cruz province and the 810MW Belgrano II combined cycle plant.

The document argued that the embattled hydro project's technical and financial feasibility is still unclear, specifically with regard to transmission planning to link the dam with Buenos Aires.

The former ministers urged the government to provide detailed studies and a technical justification for the project.

"I'm a firm believer in and defender of hydroelectricity," former energy minister and co-author of the document Jorge Lapeña told BNamericas in a phone interview. "But not just any hydro project. They've got to be viable technically, economically and in terms of financing."

The China Development Bank committed to financing the project, which the ministers said will end up costing more than US$5bn. Local daily La Nación reported last week that Argentina's ongoing debt troubles could make the country ineligible to receive the loan.

The document also accused Enarsa of awarding a turnkey contract for Belgrano II without first securing a supply of gas and of cronyism in giving the contract to local firm Electroingeniería, which the former ministers claimed has never had trouble obtaining the government's consent.

The same group of ex-ministers published a similar document in July criticizing the government's nuclear policy.