Argentina deregulates electricity market to boost PPAs in private sector

Argentina’s energy department changed the regulatory framework of the electricity market with a focus on eliminating restrictions, continuing to reduce wholesale power market administrator Cammesa's participation in the sector and allow private parties to freely establish power purchase agreements (PPAs).

In addition, the deregulation of Javier Milei's government is aimed at incorporating new generation capacity through PPAs, decentralizing fuel management and creating incentives to promote more competition.

As established in resolution No. 21/2025, published in the official bulletin on Tuesday, the main modifications are:

(a) Boosting the market through private companies 

As of January 1, 2025, all holders of electricity generation projects from conventional thermal, hydroelectric and nuclear sources are exempt from continuing to maintain the suspension of entering into new contracts, as had been established in resolution 95/13 (article 9).

That is, large users, distributors and generators will be able to enter into supply contracts and manage them in accordance with the procedures for operation, dispatch of electricity and prices that are agreed under national regulations.

In the same vein, generators that invest in new plants will be able to market the available power and the generated energy within the framework of these new contracts between private parties, the Tavarone Rovelli Salim Miani law agency said in a statement.

(b) Allowing thermal generators that operate in the spot market without a PPA to manage their own fuel from March 2025

That is, the obligation of resolution 95 that only allowed generators to manage their fuel through Cammesa is eliminated.

Cammesa is 80% owned by companies in the wholesale energy market 20% by the energy department. It is in charge of purchasing fuel for thermal generators and acts as an intermediary for supply contracts for large users and distributors. 

(c) New energy costs 

The cost of unsupplied energy is set at US$1,500/MWh as of February 1, including an incremental percentage related to demand.

• Up to 5%: US$350/MWh
• Up to 10%: US$750/MWh
• More than 10%: US$1,500/MWh 

Complementary regulations are expected to be issued in the short and medium term.