Argentina’s No. 1 clean energy player on Mater changes: ‘We’d like to run the numbers’

Argentina's biggest renewables company Genneia is studying recently announced changes to the Mater term market – and potential opportunities. 

The government last week unveiled a series of measures, chiefly designed to tackle transmission congestion which has become a headwind to new clean energy projects targeting the private power-purchase agreement (PPA) space.

One change opens the door for Mater generators to invest in transmission expansion works and secure corresponding additional priority dispatch capacity for their power plants. 

Others are chiefly geared to leveraging existing infrastructure, such as by allowing new Mater projects that supply new industrial demand – and in turn impact electricity flow and free up space on lines – to potentially secure any corresponding capacity.

Mater generators typically compete, via a bidding process, for transmission priority dispatch capacity to ensure they can inject their clean energy into the grid and fulfil associated commitments. Spare capacity, particularly in areas with strong renewables resources, is running out and, in turn, stifling investment. 

On the impact of Mater changes, Genneia CFO Carlos Palazón told the company’s Q1 results call: “We’re currently analyzing that, it was published very recently … analyzing which are the potential incremental transmission that we can do at some point. We’d like to run the numbers and follow up later.”

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Argentina has a goal, established in law, of obtaining at least 20% of power from non-conventional renewables by the end of 2025. Last year, such plants covered 13.9% of demand. 

Mater has been driving growth of the country’s installed wind and solar capacity amid an absence of regulated power supply auctions – which have only recently resumed via RenMDI – but the lack of transmission capacity is whipping up headwinds. Demand for private PPAs from corporates is healthy, driven by factors including price and supply security, decarbonization drives and compliance with local renewables targets. 

Meanwhile, in terms of planned spending, Genneia pegged 2024 capex at US$40mn, down from an estimated US$235mn for this year.

Genneia is developing a US$350mn portfolio of three renewables projects, with the first – 78MW solar park Sierras de Ullum – already built. Wind project La Elbita (162MW, US$240mn) and solar farm Tocota III (60MW, US$50mn) are due online 4Q24 and 1Q24, respectively. 

Asked about reports of potential import restrictions and fallout on construction schedules, the company said delays had been experienced but these were linked to “additional paperwork” and had been built into forecasts.

Genneia's installed capacity stands at 1.31GW, with 363MW of this being thermal assets and 944MW renewables. Thermal, which has trended down from a peak of 642MW in 2017, is expected to remain unchanged.

Chiefly a wind player, in 2018 the company entered the solar segment with the launch of San Juan plants Ullum I, Ullum II and Ullum III, with combined installed capacity of 82MW.

In related news, fellow renewables generator YPF Luz said petrochemicals firm PR3 signed an agreement to purchase 28,200MWh/y, about 30% of its demand. The electricity will come from YPF’s maiden solar farm, the 100MW Zonda in San Juan province. PR3 offtake will correspond to 9.3MW of the capacity. Under the agreement, PR3 is also given priority to purchase any excess output up to the equivalent of 50% of its demand.

Zonda output is estimated at 305,000MWh/y. The third single biggest electricity consumer in Córdoba province, PR3 uses around 80,000MWh/y.

Also, Buenos Aires power transporter Transba, on behalf of renewables firm Luz de Tres Picos, sought grid access for the 101MW wind farm Mataco III and a certificate of public need and convenience for 33kV transformer station work. Construction of Mataco III got underway last year. 

Targeting Mater, both Zonda and Mataco III have secured priority dispatch capacity.