Germany is regarded as the pioneer of the energy transition, but other countries are not far behind, including Argentina. There, political and geographic framework conditions are playing a major role.
European countries have strict regulations when it comes to expanding renewable energies. Each country has specific targets set by the EU climate and energy package which it must reach by 2020. However, countries which do not have strict rules are catching up – such as Argentina. A highly motivated government there is driving the expansion of renewable energies forward by issuing tenders, and has ambitious goals for the coming years itself. The Renewable Energy Hamburg Cluster presents this rising South American star, and offers insights into projects by its members in the country.
An upturn in South America: Argentina
In order to achieve these ambitious targets, the Argentine state is promoting the competition by issuing tenders. As part of the “RenovAr” programme, projects are issued for a specific funding level through international tenders. Companies who win the project sign a power purchase agreement with the administrative company for the energy market, Cammesa. Overall, in the first tender round, over 1,000 MW were tendered, with offers being submitted for over 6,000 MW. The largest shares were won by wind and solar projects. A smaller proportion were awarded to biomass, small-scale hydropower plants and biogas. Currently, the second round is underway, in which 1,200 MW have been tendered. Offers for projects can be submitted by mid-October 2017. The overall project is being implemented with the support of the World Bank, which is acting as a guarantor of the funds.
Tenders such as these can help win back the trust of wealthy investors. From 2001 to 2014, Argentina was bankrupt, and is now on the road to recovery thanks to Macri’s economic policies. “We are witnessing a high level of international interest in the Argentine wind market, with a six-times oversubscription in the first tender round. With the strong winds and powerful solar radiation, it has also been possible to award funds to very low-priced projects. We anticipate further positive development on the market,” says Jan Rispens, Managing Director of the Renewable Energy Hamburg Cluster.
Nordex Group receives order for 290 MW
There are several members of Renewable Energy Hamburg already represented in Argentina. In January 2017, Nordex announced two orders for 148 MW in the country. Nordex Acciona Windpower has been asked to delivery 32 turbines for the “La Castellana” project, and 15 turbines for the “Achiras” project. Construction is due to start in the fourth quarter of 2017, with completion planned for the summer of 2018. Centra Puerto, Buenos Aires, one of the most important private energy suppliers in the country, is realising both projects, and has already won a tender as part of the “RenovAr” scheme.
Making investments for over 50 years: Siemens
In 1956, Siemens exported a 300 MW power plant to Argentina for the first time, and has also been represented in other sectors in the South American country for a long time. In September of last year, Siemens’ CEO, Joe Kaeser, announced plans to implement projects totalling five billion euros over the coming five years. “By 2020, we want to double our business with Argentina,” he said. In 2018, Siemens Gamesa Renewable Energy delivered 28 wind turbines to Argentina with a total capacity of 97 MW. They are designed for use in the western province of La Rioja.
New potential discovered in Argentina: Senvion
Senvion is one of the leading manufacturers of wind turbines worldwide. The company has set short- to medium-term goals for the Argentine market and considers the tenders to be expedient. According to Pablo Necochea, Business Development Manager for New Markets at Senvion: “The tenders in Argentina were organised very quickly and have given impetus to the market.” Senvion is one of the sponsors of the second Argentinian Renewable Energy Congress, which took place in Buenos Aires in October 2017. At the congress, experts presented potential projects in Argentina. One specific order has already been placed: Senvion will deliver 27 wind turbines to Eren Renewable Energy. The project was also a winner in the first Renovar tender round in October 2016.