After much hype, the government launched RenovAR earlier this year, to promote investment in the country’s renewables sector. Zach Marzouk sat down with three industry experts to see how much of this talk would lead to a concrete greener path for the country’s energy sector.
September saw the first RenovAr auction, a programme launched by the Macri administration to encourage the development of more sources of renewable energy in Argentina. A second auction was held in November, and between them they attracted a large amount of investment in Argentina’s renewable energy sector.
In the first round of RenovAr 1141.5 MW were allocated in 29 projects with an average of US$61.3 per MWh. The second auction, RenovAr 1.5, saw the sale of 1281.5 MW sold in 30 new projects with an average of US$53.98 per MWh. The successful bidders have 120 days to sign the contracts and then 900 days to finish the construction of their projects.
The government has stated a goal of 8% of the country’s energy coming from renewables by the end of 2017, and 20% by 2025. It also hopes to use the renewable energy to try and combat the energy crisis in Argentina. But many, while lauding the plans on paper, have been been critical of the lack of formal planning to integrate the renewable energy into the country’s grid, and are skeptical of the 2017 target being met.
The Indy sat down with spoke to three experts on the subject to see what their thoughts were on the investment in renewable energy and Macri’s environmental discourse.
Enrique Konstantinidis, FARN
Enrique Konstantinidis is the Director of Climate change at the Foundation for Environment and Natural Resources (FARN) and has a positive outlook on the potential of renewable energy in Argentina.
“In everything that is related to sun and wind you cannot compare Argentina to many places in the world,” he said, adding that the country could easily place itself as one of the principal producers of renewables in Latin America.
If all that was auctioned in the recent bids is installed, he believes that confidence will grow that this is a profitable source of energy for a country like Argentina. However, he was quick to state that “renewable energy has to fight against a system of fossil fuels… and the system of subsidies and tariffs”, underscoring that a month before the first renewable energy auction, the government “launched an auction for the same amount of energy for thermal power stations, or stations which use fossil fuels.” So whilst there is growth in the renewable sector, the conventional fossil-fuel led energy sector is growing in parallel.
However, he praised the government’s “first steps” into the renewable sector, saying that the things achieved so far “need to be accompanied by many other political and economic laws” to ensure its steady growth as a reliable source of energy for the country.
Marcelo Álvarez, CADER
Marcelo Álvarez is the president of the Argentine Chamber of Renewable Energy (CADER) and shared his opinion on renewable energy in Argentina.
“There is a necessity to create renewable energy here in Argentina,” he said, but pointed out that there are two main problems: distribution and generation. “Distribution, because of under-investment in energy infrastructure, and generation, because this year Argentina has had an average demand of 33.5 GW and the nominal capacity is 31 GW.”
Álvarez believes that there is a need to cover the energy patches, and renewables can increasingly fill these gaps over the next ten years.
He hopes that the recent auction will bring the results which are needed for the development of solar and wind farms, allowing costs to be reduced across the sector, and encouraging more to be built. He also sees Argentina, in 3 or 4 years, reaching a high place in the alternative energy market behind Mexico and Brazil. “The challenge is to construct the farms on time and in the correct way.”
Sergio Federovisky, journalist
Sergio Federovisky is a well-known environmental journalist and biologist. He believes that Argentina could be a big competitor in renewable energy because it has the resources, capacity, and potential, but the “political decisions and public policies are not adequate.”
He highlighted that the energy matrix in Argentina has not been changed as no concrete action has been taken. “The government has a discourse more inclined – more favourable – towards renewable energy, but for the moment it is only a discourse,” pointing out that renewable energy “represent less than 1% of the installed capacity [of the Argentine energy matrix], which is practically nothing. In order to have an energy matrix where they will really have a presence you need to multiply it by at least 30.”
In order for that to happened Federovisky believes that more than just announcements are needed and that “there is a lack of policy created with targets with concrete projects to obtain those results.” He says that the current Argentine government has the discourse but it doesn’t have the concrete political tools to arrive at that change.
A greener tomorrow
The government will be holding Round 2 of the RenovAr programme next year in order to meet the targets laid out by Macri. The projects from the first two auctions are estimated to account for approximately 3% of the energy matrix when they are completed.
It remains to be seen whether or not the government will be able to sustain its enthusiasm for renewable energy, and if the necessary infrastructure changes to the matrix will accompany the government’s “green” discourse on the subject.