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National electrification rate (2003): 95%
In urban areas: 98%
In rural areas: 70%.
Energy procedure
N/A
Energy debates
Argentina’s energy insufficiency reached critical levels in 2007, causing factories to shut down and business to lose millions of dollars when insufficient gas resulted in electricity blackouts that paralyzed industrial activity as much as eight hours daily. A widespread energy-saving plan was implemented in 2008 to alleviate the crisis; for the first time in years, it included a daylight saving time change.
Energy sources
Total installed electricity capacity (2007): up to 28 GW.
Natural gas & oil: 50-60%
Hydro-electricity: 30-40%
Nuclear: 4-9%.
Due to low operating costs and low pollution intensity, hydro-electrical power generation is very developed.
With around 2.6 billion barrels of proven oil reserves in 2008, Argentina is the third-largest oil producer in South America (2007).
Regulatory roles
National Entity of Electricity Regulation:
Regulation of electricity tariffs.
Enforcement of competition law in the electricity industry.
Licensing transmission and distribution activities.
National Entity on Gas Regulation:
Price regulation for transportation and distribution of natural gas.
Enforcement of competition law in the gas industry.
Safety regulations for the transportation and distribution of natural gas.
Competition
Electricity sector unbundled with separation of controlling interests in generation, transmission, and distribution.
Argentine law guarantees access to the grid in order to create a competitive environment and to allow generators to serve customers anywhere in the country. Private and state-owned companies carry out generation in a competitive, mostly-liberalized market. Power generators sell their electricity in a wholesale market operated by the Compania Administradora del Mercado Mayorista Electrico (CAMMESA). The distribution sector is more heavily regulated and less competitive, with three primary distribution companies (Edenor, Edeusr and Edelap) controlling the market.
Energy efficiency
During the last two decades several energy efficiency programs have been carried out in Argentina, but so far only with limited success. In December 2007, the Government launched the National Program for the Rational and Efficient Use of Energy (PRONUREE, Decree 140/2007). This Decree declared the rational and efficient use of energy to be in the national interest and is also part of the energy sector strategy to counter supply/demand imbalance. The objective of the program is to reduce electricity consumption by 6%.
Capacity concerns
Since 2004 Argentina experienced energy rationing and shortages due to the difficulty to keep up with the increase of the demand in natural gas combined with the lack of rains during the dry season.
The deterioration in distribution company services (i.e. cables, transformers, etc) has also the potential to endanger supply.
Government agencies
The Ministry of Federal Planning is analysing the scope for renewable energy to reduce dependence on fossil fuels and hydro-electricity.
The Energy Efficiency Commission promotes efficient use of energy in Argentina. The objectives are to reduce cost for consumers as well as energy sustainability.
Energy regulation role
Government Departments have delegated regulatory tasks to the National Entity of Electricity Regulation and to the National Entity of Gas Regulation.
Ownership
Electricity
Since the electrical reorganization that began in 1992, the activities of generation and distribution are open to the private sector (whole sale and retail market instituted and fully open), with ownership of more than one activity within the sector restricted. No single generator shall provide more than 10% of national generation capacity.
In 2004, in response to the energy crisis, Energía Argentina Sociedad Anónima (Enarsa) was created, a state-owned company in charge of the exploitation and commercialization of petroleum and gas natural, and the generation, transmission and trade of electricity. Through Enarsa, the state seeks to regain a relevant place in the energy sector.
Liquid fuels market
Argentina had 626,000 bbl/d of crude oil refining capacity as of January 2008. Repsol-YPF dominates the downstream oil industry, accounting for about half of the country's total refining capacity.
Gas market: in 2003, Repsol-YPF produced 33% of the country’s natural gas followed by Total Austral SA (19%). Two companies, Transportadora de Gas del Sur (TGS) and Transportadora de Gas del Norte (TGN), control the natural gas transmission system. The distribution portion of Argentina’s gas market has become dominated by Metro Gas SA, Gas Natural Ban SA, Camuzzi Gas Pampeana SA, and Camuzzi Gas del Sur SA, most of which have strong foreign ownership.
Nuclear market
Nucleoeléctrica Argentina S.A. (NASA) has been generating electricity from nuclear power since 1994. In 2006, the government announced an initiative to revitalize the nuclear power industry in the country.
Degree of independence
The Board is composed by 5 members appointed by the Executive. Board members are renewed on a yearly basis; they can be appointed indefinitely and can be removed by the Executive only by justified causes and with the previous opinion of the Commission of the National Congress.
Energy debates
The Energy Secretariat conducts market studies and analysis to carry out strategic plans and policies on energy.
Energy framework
To deal with the energy crisis, the government introduced different plans and programs.
National Energy Plan 2004-2008 (Plan Energetico Nacional). This plan contemplates several mechanisms to be applied during the specified period of time.
Some of the measures are:
Implementation of the Argentine-Venezuelan Agreement for the provision of fuel oil.
Continuous importation form Brazil.
Execution of the rational energy consumption program for natural gas and electric energy.
Emergency Programs: with Energia Electrica Distribuida I and II programs, ENARSA installed small transportable units and floating power plants to support main Argentine provinces during periods of peak generation.
New projects directed to increase the Argentinean generation capacity such as Atucha II. This 750 MW Nucleoelectrica Argentina S.A. (NASA) nuclear plant remains under construction.
Rural electrification program with renewable energies (Programa de Energias Renovables en Mercados Electricos Rurales -PERMER) which was due to end in 2008, but has been extended to 2011.
Reliance
There are electricity interconnections with Chile, Brazil, and Uruguay. Argentina imported 10.28 billion kWh (2007 est.) and exported 2.628 billion kWh (2007 est.) electricity to/from neighboring countries.
Since the energy crisis of 2004, there are imports of natural gas from Bolivia and Venezuela.
Limited imports of coal from Australia, U.S. and South Africa.
After peaking in 1998 at 916,000 barrels per day (bbl/d), Argentine oil production has steadily declined. In 2007, the country was still the third largest oil producer of Latin America, with an estimated 789,800 bbl/d.
The country consumed an estimated 509,000 bbl/d of oil in 2006, with net exports of 293,000 bbl/d.
Role of the government
The Energy Secretariat is in charge of national energy policy. The Secretariat may coordinate and supervise the provinces, and implement regulatory frameworks.
The National Promotion Direction (DNPROM) within the Energy Secretariat (SENER) is responsible for the design of programs and actions conducive to the development of renewable energies (through the Renewable Energy Coordination) and energy efficiency (through the Energy Efficiency Coordination) initiatives. Complementarily, the Secretariat for the Environment and Natural Resources (SEMARNAT) is responsible for environmental policy and the preservation of renewable and non-renewable resources.
Regulatory framework
The 2007 feed-in tariff Law set an 8 % target for renewable energy consumption in the period of 10 years and mandated the creation of a Trust Fund whose resources will be allocated to pay a premium for electricity produced from renewable sources.
Regulatory barriers
Given the government’s continued lack of a strong regulatory presence, it makes perfect business sense for enterprises not to undertake costly infrastructure investments. As result, since July 2007, Argentina has become a net importer of electricity and fuels for the first time in decades.
Energy regulator
Electricity industry
National Entity of Electricity Regulation created in 1991.
http://www.enre.gov.ar/
Natural gas industry
National Entity on Gas Regulation created in 1992.
http://www.enargas.gov.ar
Renewable energy
It is believed that Argentina has the potential to expand its hydroelectric generating capacity, as the country has only exploited about 20% of its surveyed hydroelectric potential.
There are over 14 hydropower plants with generation capacities ranging from 100 MW to 3,200 MW. The two largest hydropower generation plants rely on bi-national projects: the 3,200 MW Yacyretá plant (Argentina and Paraguay) and the 1,890 MW Salto Grande plant (Argentina and Uruguay). A third hydroelectric project of 3,000 MW on the Paraná (Argentina and Paraguay) is under evaluation by both governments.
The country has a very large wind potential. The Chubut Wind Power Regional Center (CREE) estimated the theoretical potential for the region at 500 GW of generation. This large potential is still unexploited mainly because the existing tariffs and incentives do not make wind power development attractive enough yet. However, the main deterrent to wind power development in the region has been the lack of transmission lines that connect the Patagonia region with the National Interconnected System. The completion of the Choele-Choel-Puerto Madryn high voltage line, the first section of Línea Patagónica, under the framework of the Plan Federal de Transporte de Energía Eléctrica eliminated this bottleneck in March 2006.
Policy and Regulatory Overview [3] 