2013-12-27 11:57:06 - New Energy research report from Business Monitor International is now available from Fast Market Research
Political and macroeconomic factors cast a shadow over the short-term development of Argentina's electricity sector. Protectionist policies have long defined the market, and while a change in the presidency is almost certain in 2015's elections - there are no obvious candidates so far. Argentina is keen to reduce its reliance on expensive energy imports, but the current operating environment does little to attract investment from foreign firms. The government received just one firm bid for the expansion of the Arauco I wind farm - confirming the need for a change in the tender process. Access to finance is another concern, holding back developments in the power sector. As such, the news that two projects, a gas-fired power plant and a
hydroelectric power plant, have been approved in late 2013 is extremely positive. And once the political scene becomes clearer, we believe this could pave the way for greater foreign investment in the electricity sector.
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Argentina's power generation increased by an estimated 4.6% during 2012, just above an increase in consumption rates, estimated at 1.3%. We expect that generation will have slowed down in 2013, climbing by just 1.6%, before improving in 2014 as new projects come online. Looking forward, several factors (including rising inflation and the government's interventionist stance) mean that Argentina's business environment is unattractive to potential investors.
In terms of generation, thermal-based sources, primarily natural gas, remain the cornerstones of the electricity mix. Roughly 65% of electricity is currently generated from oil-, gas- or coal-fired power plants, with hydropower providing the next largest contribution, of 28%. Despite the government's efforts to diversify the electricity mix away from unreliable hydropower and costly thermal imports, we do not expect to see a significant shift in the electricity mix during the course of our 10 year forecast period.
Key developments for Argentina's power sector this quarter include:
* In late September 2013, nuclear power station Atucha II passed its first grid synchronisation test. The power station is expected to begin operations by early 2014.
* A consortium formed of Argentina's Electro Ingenieria and China's Gezhouba Goup, won a US$4.1bn contract in late August 2013 to construct two hydroelectric dams on the Santa Cruz river in Patagonia.
* In September 2013, Siemens Energy secured a contract - estimated to be valued at US$800mn - for the turnkey construction of two gas-fired power stations in the Buenos Aires province. The power stations are scheduled to start operations in 2015.
Report Table of Contents:
BMI Industry View
- Argentina Snapshot
- Table: Country Snapshot: Economic And Demographic Data
- Table: Country Snapshot: Power Sector
- Argentina Power Forecast Scenario
- Electricity Generation And Power Generating Capacity
- Table: Argentina Total Electricity Generation Data And Forecasts, 2011-2016
- Table: Argentina Total Electricity Generation Long-Term Forecasts, 2017-2022
- Table: Argentina Electricity Generating Capacity Data And Forecasts, 2011-2016
- Table: Argentina Electricity Generating Capacity Long-Term Forecasts, 2017-2022
- Electricity Consumption
- Table: Argentina Total Electricity Consumption Data And Forecasts, 2011-2016
- Table: Argentina Total Electricity Consumption Long-Term Forecasts, 2017-2022
- Transmission & Distribution, Imports & Exports
- Table: Argentina Electric Power Transmission And Distribution Losses Forecasts, 2011-2016
- Table: Argentina Electric Power Transmission And Distribution Losses Long-Term Forecasts, 2017-2022
- Table: Argentina Trade Data And Forecasts, 2011-2016
- Table: Argentina Trade Long-Term Forecasts, 2017-2022
Industry Risk Reward Ratings
- Latin America Power Risk/Reward Ratings
- Argentina Power Risk/Reward Ratings
- Key Policies And Market Structure
- Regulation And Competition
- Sustainable Energy Policies
- Argentina Power Projects Database
- Table: Argentina Power Projects Database
- Pampa Energia
- Pampa Energia
- Latin America Regional Overview
- Table: Glossary Of Terms
- Industry Forecast Methodology
- Risk Reward Rating Methodology
- Table: Power Risk Reward Rating Indicators
- Table: Weighting Of Indicators
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