Argentina restarts its renewable energy services industry with a policy review and ambitious goals towards 2025
Essential economic reform plans of Argentina’s new government under president-elect Mauricio Macri, with a major transformation of the electricity sector, are currently favouring a renewable energy services boom in Argentina. A total of 9 GW of new green capacity is expected to be introduced to the electricity mix by 2025.
Since the new Administration has come to power in late 2015, the Renewable Energy Market in Argentina got strongly pushed and has already attracted a lot of interest among international project developers and investors. Although the previous government had already set in place renewable energy targets and a legal framework with the aim to promote renewable energy development in Argentina, the current share of renewable energy sources in the country’s energy mix amounts only to 1.8%.
In October 2015 a new bill No. 27.191 was introduced and sets today together with Decree 531, released in March 2016, the support scheme which is causing tremendous interest in the market. Although the market still has to struggle with a weak peso, high inflation levels and low growth rates as heritage from the past, against the new political background and Argentina’s ambitious target of generating 8% of the country electricity from renewable energy sources by 2017 and 20% by 2025, a strong development of the green power industry during the coming months and years can be expected.
Part of the Macri’s administration strategy in order to support this transition is the renewable energy auction programme “RenovAr” which will be carried out in several phases. Argentina’s wholesale power market administrator CAMMESA released on May 18, 2016, the draft tender documents for the first phase (RenovAr Ronda 1), which is currently undergoing a period of consultation and aims to procure a total of 1 GW of which wind energy, as the dominating technology, is accounting for 600 MW of the capacity tendered, solar PV for 300 MW and smaller shares may be allocated to biomass (65 MW), small hydro (20 MW) and biogas (15 MW).
While official tender documents are expected to be published by July 1, 2016, the winners of the first tender will be announced in September this year, with PPAs set to be signed by October 28, 2016. According to draft tender documents, project developers will have to present a Yield Assessment Report (Reporte de Producción de Energía, RPE) to be considered eligible, elaborated and certified by an independent consultant who must declare to have minimum 1,000 MW experience in the conduction of similar studies in the local or international market. This Yield Assessment Report should not date back more than three months from the date of presentation of the bidding proposal.
Vector Cuatro entered the Americas’ renewable energy markets first in 2011 as independent consultant in the US and several countries in Latin America.
Given the strong growth of renewables in those markets in the following years, the Firm finally opened in 2013 its office in Mexico as a regional hub from which it manages all its operations in the continent, always supported by the Madrid headquarters. However, given the strong activity of the group and arising interest of the industry in the Southern cone, Vector Cuatro is currently opening a new office in Santiago de Chile to cover South America at closer range.
The services rendered by the Firm both for solar PV as well as for onshore wind projects have been adapted to the great variety of clients and always aiming to best respond specific needs of each of them, in accordance to local characteristics.