Argentina's renewables sector is looking at a rosier outlook in 2025 supported by new legislation and improved economic conditions.
The country's renewable energy legislation, which was enacted in 2015 and expires at the end of 2025, stipulates a target of 20pc participation of renewables — excluding hydropower plants greater than 50MW — by the end of 2025. The country has not met annual targets, but there is growing confidence that it could come close to the goal by the end of next year.
Renewable sources covered 15pc of the demand in October, according to the latest report from the energy secretariat, up from 13.5pc in July. The country added 373MW in new renewable generating capacity in the first three quarters of this year.
The trade organization of wind energy CEA, estimates that 700MW in new solar and wind capacity will be added in 2025.
A replacement renewable law focused primarily on investment, which the ruling Libertad Avanza party plans to submit in early 2025, and economic deregulation underway has the sector confident that financing for projects will soon be readily available, ushering in a boost in private investment for renewables.
Ignacio Criado, a partner at the Tanoira Cassagne law firm who focuses on renewable energy, said he expects the country to be close to the 20pc renewable target by the end of 2025 and that there will be sustained growth in coming years.
"More players are interested in the construction of renewable energy plants, with solar power in the north and wind in the south," said Criado.
He said that the country's increasing economic stability and a government program providing incentives for large-scale investments, known as the RIGI, are fostering interest among investors.
Argentina's economy, while still in tough shape, has improved in the year since president Javier Milei took office. While annualized inflation is still in triple digits, the monthly rate fell from 25.5pc in December 2023 to 2.4pc in November, according to the statistics agency. It was 112pc in the 12 months through November.
The economy shrank by 3.4pc in the first half of the year and will contract by around 3pc the full year, but is expected to grow by 5pc in 2025, according to the IMF.
During a 10 December address marking his first year in office, Milei said tax reform and elimination of exchange rate and customs controls would be forthcoming, adding to investment flows.
RIGI boost
The administration has already received requests under the RIGI mechanism for $11.8bn in investment, primarily in energy projects, Milei said.
Among the projects in line for the RIGI is the state-owned YPF Luz's 305MW El Quemado solar plant, the first stage of which should be ready by 2026.
In early December, the state's energy wholesaler, Cammesa, awarded a contract for eight new renewable projects with a combined capacity of 561MW. It received 31 proposals for a total of 1,639MW.
Of the projects, 345MW were awarded to Genneia, the country's largest renewable company with more than 1GW in installed capacity, and 88MW to Australia's Fortescue for its Cerro Policia wind farm in the southern Rio Negro province. The energy will be used for its planned low-carbon hydrogen project. These projects should start coming on line from the end of 2025 in throughout 2026.
As of October, Argentina had 6.56GW in installed renewable capacity, including 4.12GW in wind, up by 11.2pc from a year ago, 1.63GW in solar, up by 19.6pc, and 82MW in biogas, up by 5.4pc. It also had 524MW in small hydroelectric plants and 201MW in biomass, with no new capacity from a year earlier. Large-scale hydroelectric plants totalled 9.63GW, while thermal electric plants totalled 25.28GW and nuclear plants 1.75GW.
