Snapshot: Argentina’s biggest generator and its growing footprint

Argentina’s Central Puerto is consolidating its position as the country’s biggest power generator by capacity.

The listed firm, with installed capacity of 7.17GW at end-2023, last month started work to convert to combined-cycle the Brigadier López gas turbine plant in Santa Fe province.

The project, being carried out by engineering firm Sacde, will ramp up the plant’s capacity to 432MW from 292MW by around the end of 2025. Sacde built the plant.

Capex for the project is estimated at US$150mn, Central Puerto’s 4Q23 results call was told.

The power station was transferred to Central Puerto by state energy company Energía Argentina – at the time known as IEASA – for US$326mn in 2019. Combined-cycle conversion components were purchased by Energía Argentina around six years ago.

At end-2023, Central Puerto had 5.23GW of thermoelectric capacity, 1.44GW of hydroelectric capacity, 374MW of wind and 195MW of solar PV.

NATIONWIDE CAPACITY 

Installed capacity in Argentina climbed 2% to 43.8GW in 2023, with thermoelectric assets accounting for 58%, hydropower 25%, renewables 13% and nuclear 4%.

The country saw 396MW wind and 280MW solar PV added to the grid, along with a net addition of 162MW thermoelectric capacity, as 735MW new combined-cycle capacity was partially offset by the decommissioning of gas turbine and diesel units.

TERCONF CAPACITY

Central Puerto has been awarded two projects at its Central Costanera power plant in Buenos Aires province, for a combined 516MW. 

This was part of regulated thermoelectric supply auction TerCONF, led by wholesale power market administrator Cammesa. Today the auction is in limbo, after the federal government put contract-signing on hold amid a planned electricity market restructuring.

Overall, 3.3GW in supply contracts were awarded.

“I think the government is analyzing in detail if they need all this capacity or not,” Central Puerto CEO Fernando Bonnet told the call.

“If you ask me, I don’t see the government awarding all that capacity; in fact, they want to go with a scheme of private [power purchase agreements] PPAs, trying to channel PPAs between distribution companies, users, generators, to promote that.”

Capacity is nevertheless needed in parts of the country and may be awarded under a different scheme. 

PAYMENT DELAYS

Amid delays in payments from offtaker Cammesa, Central Puerto is using short-term credit facilities to help cover outlay, Bonnet said.

Fellow generators have expressed concern over the situation, citing the impact on capex and working capital. The federal government is working to reduce subsidies, and this has impacted inflows into Cammesa.  

Generators need remuneration now, the call was told. 

Payments are expected to start to normalize from April. 

HYDROELECTRIC CONCESSIONS

Hydroelectric plants currently operated by the private sector, but whose concession contracts have technically expired, are expected to eventually transfer to Energía Argentina ahead of a fresh process to secure operators, the call was told.

Central Puerto’s 1.44GW Piedra del Águila hydroelectric plant in Neuqúen province is among them. 

Officials have introduced contract extensions while the transfer preparation process is underway and as the new government works on a planned electricity market overhaul.

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