Argentina to Create State-Owned Company to Take Control of Hydroelectric Plants Privatized In 1990s

Researched by Industrial Info Resources (Sugar Land, Texas)--The Argentine government's 2024 draft national budget includes the creation of a state company for the administration, operation and exploitation of hydroelectric plants that were privatized in the 1990s and whose concessions will expire in the coming years. In particular, it stipulates the creation of Energías Hidroeléctricas S.A.U., which would be controlled by the state-owned Energía Argentina S.A. (EASA).

Last June, the secretary of energy of the nation instructed EASA to take control of five hydroelectric projects when their concessions expire. The concessions of AES Generación Argentina's 1-gigawatt (GW) Alicurá Hydro; 1.2-GW El Chocón and 120-megawatt (MW) Arroyito plants, held by ENEL Generación, and the 420-MW Planicie Banderita, held by Orazul Energy, expired in August; while Central Puerto's 1.4-GW Piedra del Aguila hydro plant concession expires in December. However, the provinces of Río Negro and Neuquén, where the plants are located, claimed to have participation in the ownership of the plants, since although the generation assets are national, the water resources are provincial. Finally, it was decided to extend the concession contracts for up to 120 days.

With the creation of Energías Hidroeléctricas S.A.U., the state also would regain control of another 17 generation plants whose concession contracts expire between 2024 and 2029. These plants add up to a total installed capacity of 1.7 GW. These range from large plants such as the 516-MW Futaleufú plant in the province of Chubut, which is held by the Aluar Group, to small plants such as the 10.8-MW El Tunal plant, held by AES Generación. Thus, about 6 GW of hydroelectric generation capacity will pass into the hands of the state in less than 10 years.

Hydroelectric generation plays an important role in the Argentine electricity market, since with more than 10 GW of installed capacity it represents about 30% of the country's generation matrix. Here is also the 50% share that corresponds to the generation of two binational plants: the 3-GW Yacyretá plant that Argentina shares with Paraguay and the 1.9-GW Salto Grande plant that it shares with Uruguay. In the case of Yacyretá, due to lack of high-voltage transmission infrastructure, Paraguay historically used 15% of its participation and ceded 85% to Argentina; however, Paraguay made significant investments in 500-kilovolt lines and in recent days began to withdraw 100% of what corresponds to it.

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