Updating The Argentine Power Grid
Argentina’s clean energy potential is obvious, but the infrastructure roadblocks are delaying renewable growth. Despite having vast tracts of usable land for PV and wind farms, only 7% of Argentina’s power generation comes from wind, and only 1% from solar. A report by the New Climate Institute found that one of the primary reasons for this lack of renewable energy deployment is the current state of transmission infrastructure. The commitment that previous administrations have made to renewable energy growth has not been matched by a commitment to grid expansion. By addressing this problem, Argentina could dispel incorrect notions of the price of renewable energy, facilitate the creation of renewable projects in remote areas, and alleviate concerns for foreign investors.
Argentina’s power grid is already struggling to send significant amounts of renewable energy that are created in the north or south of the country to major power centers. Considering much of the PV potential is in the far north of the country and much of the large-scale wind potential is in the south, administrations will need to provide grid infrastructure to secure investments in these regions.
Unfortunately, Argentina has not matched its investment in renewable energy with an investment in grid infrastructure. A lack of maintenance and investment has resulted in a power grid that is not capable of transmitting large scale amounts of renewable energy. At the beginning of the Macri Administration, power outages prompted the government to declare an “electrical emergency.” While this focused on both increasing generation and improving distribution, it did not succeed in transmission grid expansion. This can be seen by the fact that no new transmission lines were built under the Macri administration. This is likely the result of replacing the government funded model with Public Private Partnerships. However, the economic instability in Argentina made it impractical for these partnerships to install major transmission lines.
The recurring belief within Argentina that renewables are a more expensive alternative to coal and natural gas is partly due to users associating grid expansion as a renewable energy expense. However, grid expansion is necessary to incorporate new power plants, regardless of whether they are renewable-based or gas-powered. Renewable energy grid expansion does often require additional expenses as they need more flexibility options and renewable energy often has to be transported from either the far north or far south of the country, compared to gas-fired plants that can be built close to load centers. However, this same report found that when analyzing full-system costs, renewable energy is less expensive over the long term. It will be extremely difficult for Argentina to reach its goals for renewable energy generation in 2025 without these updates to its power grid. As Fermín Koop, a Buenos Aires based clean energy reporter, found “Argentina needs to update their energy grids, as wind and solar resources are often far away from big cities, requiring energy to be moved across the country.”
Argentina saw significant distributed generation growth in 2021, including an increase of 111% in the number of user-generators registered and a 190% growth in installed power. This included the incorporation of more than 5,900 kW of power. 376 renewable energy generators were able to send their surplus energy into the grid, and they were compensated through the CCF Tax Credit Certificate.
Along with expanding distributed generation, Argentina is expanding the grid itself. This includes a transmission project in the Tucamán province with a budget of $62 million, a part of the development plan provided by the Inter-American Development Bank that is being used by Argentina to increase its grid capacity. This loan, which totaled $1.4 billion, will include projects in Entre Ríos, Catamarca, Santa Fe, La Pampa, and Tucumán.4In addition, the plan includes the expansion of the Crespo-Viale, El Bracho, and Villa Quinteres lines.
Learning from the faults of the Macri Administration should encourage the federal government to lead the expansion projects themselves, rather than rely on public private partnerships. By addressing the need for power grid expansion to accompany renewable growth, Argentina will make themselves a more attractive location for both investment and generation of renewable energy.
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