Snapshot: Corporate demand driving Argentina wind power growth

Consolidating an existing trend, recent wind project announcements in Argentina are chiefly linked to private power purchase agreements or self-supply initiatives.

Multiple drivers have spurred interest in this type of investment, spanning price and supply security, corporate decarbonization, compliance with renewables targets and peso liquidity.

PAMPA ENERGÍA

The biggest project belongs to local electricity and hydrocarbons player Pampa Energía and involves the construction of a 300MW wind park in Buenos Aires costing US$500mn. 

The proposed plant, BNamericas has learned, will inject power into the 500kV transmission system and operate under term market Mater, where large users contract power directly from renewables generators. 

Some site preparation work could get underway in late March and private tenders are planned for project components. Pampa has secured transmission priority dispatch capacity.

The plant will be the company’s sixth wind farm and will ramp up its renewables portfolio to 687MW. 

YPF LUZ

Local generator YPF Luz issued US$150mn in debt to help bankroll its fourth wind farm, General Levalle, which is expected to cost US$260mn and have capacity of 155MW.

Planned for Córdoba province, General Levalle is also targeting Mater and has transmission priority dispatch capacity.  

The firm's current three wind plants have a combined installed capacity of 397MW.

GENNEIA 

Local generator Genneia, Argentina’s biggest renewables player by output, also issued debt recently – for US$73mn – to help finance construction of the 162MW La Elbita Buenos Aires province wind park, as well as 60MW San Juan province solar farm Tocota III.

In the construction phase, El Elbita will initially have 104MW of capacity. Genneia, with 784MW of wind assets, has secured transmission priority dispatch capacity for the project.

DOW-PCR

In related news, local press reported that global chemicals firm Dow agreed to purchase 9MW of wind capacity – to power operations in Buenos Aires province – from local oil, electricity and industrial firm PCR.

The target projects are Mataco III and Vivoratá, which both have transmission priority dispatch capacity. Construction work got underway last year.

TERNIUM

The local unit of Luxembourg-based steelmaker Ternium announced it would invest US$160mn in a 72MW Buenos Aires province wind farm, due to enter operations next year. 

The company told BNamericas that the plant would be built under the self-supply model and connected to a high-voltage line running across project land. Officials do not expect to generate surplus power.  

Ternium follows in the footsteps of primary aluminum producer Aluar, which in 2022 announced plans to expand its 165MW Puerto Madryn wind complex in Chubut province by 81MW. The plant helps power its electricity-hungry operations.

INSTALLED CAPACITY, HEADWINDS

Projects targeting Mater and self-supply schemes are driving growth of wind capacity in Argentina and an overall uptick in renewables generation.

But there are headwinds that could potentially impact the momentum.

Spare transmission capacity is limited in some renewables hubs and the macroeconomic and regulatory landscape – chiefly in the sphere of capital controls – is deemed unconducive to major outlay by some foreign players.

Indeed, companies driving growth are large local firms looking to dollarize their pesos, lawyer Juan Cruz Azzarri, a partner at law firm MHR Abogados, told local daily El Cronista. He added that a bright spot was foreign firms interested in investing in renewables to supply the mining industry but that a question mark hung over how many projects would actually materialize.  

Nevertheless, in terms of auctions for supply contracts with wholesale power market administrator Cammesa, a new process was recently launched, reigniting a segment that had been dormant for several years. A consultation period will be open until February 24 and offers will be received until March 15, with commercial offers being opened on May 10 and the projects announced on May 24. Supply contracts will be signed between May 29 and September 20.

Argentina has abundant land and enviable solar and wind resources. Installed wind capacity is about 3.3GW.

The country’s non-conventional renewable energy [NCRE] park and associated output is slowly expanding. 

According to data from Cammesa, 1.74TWh of electricity was generated by NCRE plants in December, up from 1.55TWh a year earlier, corresponding to 13.4% of total power output.

Wind accounted for 1.23TWh of NCRE production in December, up from 1.11TWh a year earlier.

Argentina has a legally established goal of generating 20% of power from NCREs by 2025.

Installed capacity in Argentina stands at 42.9GW, with thermoelectric plants accounting for 25.3GW, hydroelectric 10.8GW, NCREs 5.03GW and nuclear 1.76GW.