Argentina to spur renewables development under new state-run model

Six Argentine provinces have joined their respective public generation companies into a cluster to develop renewable projects.

The initiative will be coordinated by a new agency, called Clúster Renovable Nacional (national energy cluster), which will include the provinces of San Juan, Catamarca and La Rioja in the center-north, central Mendoza, and Neuquén and Río Negro in Argentina’s center-south. All of them are attempting to develop renewable energy projects with support from the federal government.

Public sector players included in the deal are Parque Eólico Arauco (owned by La Rioja and Enarsa) and provincial power firms Epse (San Juan), Emesa (Mendoza), and Energía de Catamarca, Neuquén’s investment agency ADI, Río Negro’s wind developer Ersa, owned by state-run Invap, and Impsa, recently acquired by the Argentine state.

The productive development ministry said in a statement the project involved “fostering the development, construction and operation of renewable energy plants, which are key to care for the environment and broaden the electric power offer.” It added the initiative would be focused on national production of key parts to create a local “productive network.”

“This is an initiative that will create 2,250 jobs and more than 4,000 indirect ones, with an investment close to US$1bn, replacing imports, providing more work and output for a productive chain comprised of over 250 small and medium companies across the country,” said production minister Matías Kulfas.

Argentina saw fast development in renewables between 2016 and 2018, with a series of supply tenders called RenovAr. 

A lack of international financing options due to economic difficulties starting in 2018 and a lack of new tender rounds over the past three years led the sector to cool down significantly. 

Recently, the government offered an option for RenovAr contracts for projects abandoned due to lack of financing to be canceled through a one-time payment.

The current government’s proposal is vastly different, emphasizing local production and supply of parts and state-backed financing, where RenovAr focused on access to competitive financing via international markets.