Argentina's Solar, Wind Projects Bounce Back

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Researched by Industrial Info Resources (Sugar Land, Texas)--In July 2016, Argentina's wholesale electricity market operator, CAMMESA, launched the first auction of the RenovAr Program. This started a boom in the development of renewable projects and long-term power-purchase agreements (PPAs) for the construction of more than 5 gigawatts (GW) of new renewable capacity.

The projects were awarded after four auction rounds were held between 2016 and 2018. Then, in 2018, a financial and economic crisis arose, creating major difficulties for developers who were seeking international financing. As a result, 91 awarded projects couldn't move forward, blocking the development of more than 1.5 GW of transmission capacity.

The lack of financing alternatives for these PPAs, without the payment of large fines and penalties, extended the situation, causing a halt in the development of new projects.

In December 2021, Argentina's secretary of energy released Resolution 1260/21, which allowed developers with RenovAr's PPAs to either terminate their contracts and pay a lower termination penalty, or ask for an extension of the original development schedule. In September, CAMMESA approved the cancellation of 30 projects, amounting to 778 megawatts (MW) of transmission capacity.

It is expected that most of this newly available capacity will be used for the development of renewable projects under the Renewable Energies Spot Market (MATER) program. This program was established in 2017 as a mechanism to regulate private PPAs between renewable energy producers and large users of the wholesale electricity market. Under this program, quarterly auctions are held.

The MATER program replaced RenovAr as the main driver to stimulate renewable projects. According to CAMMESA, between 2018 and 2020 only 26 MW were awarded; in 2021, this number climbed to 690 MW and then jumped to 1.3 GW during the three auctions held so far in 2022.

Industrial Info's Global Market Intelligence (GMI) Power Project Database reflects this trend. There were 92 new solar and wind projects tracked in 2016, when the RenovAr program started. New solar and wind projects then decreased steadily through 2019 and then plummeted to one in 2020. Then, in 2021, the number of projects started to climb again, reaching 12 in 2021, and then jumped to 43 new projects between January and mid-November 2022.

Click on the image at right for a graph showing new solar and wind projects in Argentina from 2016 to 2022.

Industrial Info's GMI Power Project Database accounts for 118 active solar and wind projects in Argentina, adding up to more than US$8.9 billion in planned investments; US$7.36 billion are still in the planning phase, while US$953.6 million are in the engineering phase and US$627.6 million are under construction. Subscribers can click here for a list of detailed project reports.

These figures could grow significantly in the short term, since the secretary of energy recently announced a coming PPA auction for new renewable energy before the end of 2022. In May, CAMMESA released a public call for private companies to present proposals for renewable projects in specific geographic areas to reduce thermal generation (specially, low-efficiency forced generation during peak hours) and stimulate renewable project development. When the process was closed in July, 491 projects were submitted with a total capacity of 14.4 GW; but, given the requirements of having a capacity less than 90 MW and using 55-65% of domestic components and services, only 303 projects representing 4.25 GW will be able to participate in the announced auction.

Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking more than 200,000 current and future projects worth $17.8 Trillion (USD).