'We'll renew our commitment to renewables in 2017'
Argentina quickly emerged as a global renewables hotspot last year and under-secretary Sebastián Kind says the momentum will be maintained in 2017
After moving swiftly to spur investment in utility-scale renewables through two hugely oversubscribed and successful tenders last year, Argentina’s President Mauricio Macri has decreed as the “year of renewable energy”.
In the article below, published in English exclusively by Recharge, renewable energy under-secretary, Sebastián Kind hails the big advances made in 2016, which he says have guaranteed 9% of renewable energy supply by 2018 – surpassing the country’s 8% target.
As well as the continuation of utility scale tenders – the next is expected to be announced by the end of the first quarter of 2017 – Kind said the government will focus on expansion of the transmission network and the start of a non-regulated market, as well as training those working in the sector.
"The return of the country to the international markets and the structure of a long term programme allowed for large-scale development of the renewable energy market in Argentina.
This fact was proved by the enactment of Act No 27191 – Renewable Energy Legal Framework – by the end of 2015. The subsequent decrees 531/2016 and 882/2016 were necessary to regulate this act in order to reach the 20% target of renewable energy generation by 2025.
The Under-secretariat of Renewable Energies has taken concrete measures to comply with this act and to promote the diversification of our energy mix. The RenovAr Program was the first measure to purchase renewable energy on a long term basis.
The RenovAr Program links agreements and guarantees by means of the public trust fund called Fund for the Development of Renewable Energies (FODER) a financial and trust tool which makes this programme attractive for national and international investors. Furthermore, the World Bank has provided exceptional support for the creation of a specific guarantee fund.
As a result, the offered capacity of bids received exceeded [by] six times the amount to be awarded in Round 1. In addition, the offered prices have turned Argentina into one of the most attractive markets in the world to develop renewable energies.
The call for tenders carried out in September within the framework of Round 1 of the RenovAr Program in order to award 1GW received 123 bids accounting for 6.3GW, corresponding to five technologies spread over 20 provinces.
The success of this call led the government to immediately launch the next (Round 1.5) for those projects which had not been awarded. Round 1.5 call for tenders and the awarding process was carried out in October. Fifty-nine projects were awarded for 2,423 MW in both rounds. The average price offered was US$57.44/MWh.
Once the projects become operational, they will produce 8.3 TWh/year of energy (equivalent to 5.7% of the electric power mix planned by 2018). This energy will be added to the energy generated by renewable energy projects under current commercial operation, and to the energy generated by projects up and running. This will represent 9% of the national power mix in the next few years.
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The application for a chair at the International Renewable Energy Agency (IRENA) Council, and the recent approval of the biggest loan in history to a single country member of the Green Climate Fund, explain the global success of RenovAr.
On the other hand, the second stage of the Renewable Energies Project for Rural Areas (PERMER) with a US$250m budget has been launched, to provide renewable energy to 350,000 inhabitants living in vulnerable communities and with no access to electric power in the next four years.
We are taking actions by means of the Probiomass Program (together with the Ministry of Agroindustry) so as to encourage thermal and electric power generation from biomass.
Additionally, we are working on the design of a promotion programme, and on [proposals] which will allow for the development of solar thermal energy.
Together with the Ministry of Science and Technology, we have created the National Center for Energy Efficiency and Renewable Energy (CENEREE) to develop nationwide technological knowledge.
During 2016, we analysed the necessary issues to promote Distributed Generation so as to make suggestions to a Bill which takes into consideration technical standards and a training programme for professional installers.
A renewable energy training plan for professionals was designed together with the National Institute of Technical Education (INET) under the Ministry of Education. Twenty-four professional training centres all over the country will carry out such training plan.
Our greatest wish is to achieve these goals in 2017. We also envisage our active participation in the IRENA Council on behalf of Argentina and the region.
"We envisage our active participation in the IRENA Council on behalf of Argentina and the region"
We renew our commitment before the world to promote the strengthening of this sector. We consider that the private market should be regulated so as to promote the purchase of renewable energy between large users and generation agents.
As far as the RenovAr programme is concerned, we will manage the execution of the projects awarded and we will outline future rounds.
In order to comply with the targets set forth in the Act, the Undersecretariat of Renewable Energies will work on the planning of the grid expansion to include future renewable energy generation volumes.
In this way, we have achieved great results. We look forward to continuing this path. Renewable energy is safe and reliable, since it implies a minimum environmental impact and its generation is deemed more convenient, from an economic point of view, than conventional electric power.
Argentine people must become aware of the high potential of our natural resources which enable the development of clean energies with multiple benefits."
This article was first published in Spanish by local media in Argentina