Argentina Renewable Energy Market - Growth, Trends, and Forecast (2020 - 2025)

The Argentina renewable energy market is expected to grow at a CAGR of more than 13% during the forecast period. Factors such as the Public Private Partnership (PPP) law, to regulate and encourage private investments in the critical sectors of the country’s economy, including 60 projects which are expected to be implemented under the PPP mode, primarily across major infrastructure and social sectors, including energy and transport are expected to drive the renewable energy market during the forecast period. However, due to fiscal deficit and lack of finance, the government could not invest sufficiently in the renewable sector, in order to increase domestic generation capacity. This, in turn, is expected to restrain the growth of the market studied.

Hydro energy segment is expected to be the largest segment, owing to significant increase in number of projects and being the second largest source of power generation in Argentina. It also has the largest installed capacity in comparison to wind and solar energy in 2019.

In June 2019, the Argentinian Finance Ministry’s Energy Secretary received 56 bids for the MiniRen or Round 3 of the RenovAr program. These bids represent a total of USD 520 million worth of investment, which is expected to be distributed in 14 provinces, hence creating ample opportunities for the renewable energy market players.

RenovAr program was initiated by the Argentina government to improve the share of renewable energy in its energy mix to 20% by 2025. Under the RenovAr program, regular public bidding processes were held, in which, different companies presented their investment plans. Hence, a major driver for the Argentina renewable energy market is expected to be the RenovAr program during the forecast period.

Key Market Trends

Hydro Energy to Dominate the Market

• Hydroelectric generation accounted for approximately 29% of the total power generated in Argentina, in 2019. The total electricity generated from hydroelectricity reached 39,671 GWh, representing an increase of 11.04% over the previous year.
• In 2018, Argentina’s President Mauricio Macri ruled in favour of constructing the USD 900 million 210-MW Portezuelo del Viento hydropower project on the Rio Grande in Malargue, south of the province of Mendoza, located in central Argentina. The facility is expected to help water management, tourism, and supply power to an estimated 743,167 residences, according to project specifications.
• Moreover, Argentina is in the midst of developing several hydro projects that have much larger capacity, compared to renewable projects in the RenovAr program. The government’s authorization to restart the construction of the Kirchner-Cepernic hydropower complex in Argentina supports hydropower capacity growth in the country.
• Hence, there are a number of hydropower plants in pipeline and planning stages in the country, which in turn are expected to promulgate the renewable energy market in Argentina.

RenovAr Program Dominating the Renewable Sector

• The RenovAr program has so far attracted strong investor interest, which led to significant oversubscription of the bidding rounds. Bidders compete to sign 20-year power purchase agreements (PPAs) with CAMMESA (Compañía Administradora del Mercado Mayorista Eléctrico), which acts as off-taker on behalf of distribution utilities and large, wholesale market users.
• Round 2.0 of the RenovAr program was launched in August 2017 with an objective to contract 1,200 MW, with quotas per region and technology. The tender drew strong investor interest and was more than seven times oversubscribed than Round 1.0.
• Moreover, 88 projects with a combined capacity of 2,043 MW were successful in second round. In November 2018, Argentina launched the third round of its RenovAr renewable energy auction program, aiming at a total of 400 MW of new installed capacity.
• Therefore, the government’s focus on increasing the renewable energy share in the energy mix of the country to 20% by 2020 is expected to be bolstered by RenovAr program.

Competitive Landscape

The Argentina renewable energy market is fragmented. Some of the key players are Pampa Energia SA, YPF Luz, Enel Green Power S.p.A., Genneia SA, and 360 Energy SA.

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