Paneles solares instalados en Cauchari III, licensed under the Creative Commons Attribution-Share Alike 4.0 International license.

Cauchari Solar Initiative Giving Argentina a Boost into Clean Energy Future

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The largest solar project in South America is situated at over 13,000 feet above sea level in the far north of Argentina. In 2019, this project was inaugurated with over 1,000,000 solar panels generating power for 160,000 homes. At its onset, the project consisted of three individual PV fields, the Caurachi I, II, and III. With a new expansion, it will be able to provide electricity to 260,000 homes while also creating new jobs for local Argentinians.

The Cauchari Solar Plant is just the start for Argentina, which is starting to really shift to using more renewable energy sources. The electricity from the Cauchari solar project will be sold to Argentina’s electricity wholesale market administrator Compañía Administradora del Mercado Mayorista Eléctrico (CAMMESA) at a price of £46 per MWh under a 20-year power purchase agreement (PPA). As of 2020, the Cauchari project is set to expand by 200 MW, reaching a final installed capacity of 500 MW. The new projects, Cauchari IV and V, are hoping to find a cheaper MW/h rate than that currently being paid for Caurachi I, II, and III.

The financing of this project was done primarily by the Import and Export Bank of China, which provided 85% of the funds at a 3% annual interest rate over 15 years. While this makes the project highly affordable for Argentina, it stipulated that the Jujuy province, in which the project was built, must purchase 80% of the necessary materials from Chinese suppliers. The success of this project has continued to ingratiate China to Argentina. During the inauguration, the Argentinian president commended the governor of the province for the trust that he generated in Chinese investors, and laid the groundwork for future projects with his comments on Jujuy’s “almost infinite” solar generation capacity.

The success of this project demonstrates the power that clean energy adoption can have on rural communities and areas that were previously seen as unsuitable for any other application. The Argentine president at the time said, “It is only the beginning of what Jujeños are going to give to the rest of the country.” This project employed over 600 people, including people from the communities of native people in the area. Argentina was able to complete this project due to the low-interest loans of the Export–Import Bank of China, and they currently have a letter of intent with the Export–Import Bank of China for the expansion.

Despite the success of this project, and the fact that Argentina is considered an ideal location for PV development, the country produces almost none of its energy from PV. The energy mix from 2019 showed that Argentina used 89% fossil fuels, 3.9% hydroelectric, 2.8% nuclear, and the remaining encompassed all other sources of energy creation. For a country that was ranked 18th in PV position by Ernst and Young’s Renewable Energy Country Attractiveness Index, this is shocking. A report done by faculty at two of Argentina’s universities, as well as another solar expert, found that “there is a large gap between the vast solar resources and the magnitude of solar energy deployment in Argentina.” US investors with experience and interest in large-scale solar farms may find opportunity in the northern regions of Argentina.

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Otto Gunderson

Otto graduated from the University of Virginia class of 2022 with a degree in history. He has been involved in clean energy, specifically solar and circular economic practices, for four years now and has been writing about clean energy for 2 years. Due to a lack of writing on the clean energy transitions in South America and Africa, Otto decided to spend his 2023 traveling across these continents, interviewing clean energy entrepreneurs, researchers, and disruptors and publishing their stories.

Otto Gunderson has 31 posts and counting. See all posts by Otto Gunderson