Argentina (2012)

Degree of reliance on imported energy: 

<p>
There are electricity interconnections with Chile, Brazil, and Uruguay. Argentina imported 5.53 billion kWh and exported 3 billion kWh electricity to/from neighbouring countries in 2009.<br />
<br />
Since the energy crisis of 2004, there are imports of natural gas from Bolivia and Venezuela, and limited imports of coal from Australia, U.S. and South Africa.<br />
<br />
After peaking in 1998 at 916,000 barrels per day (bbl/d), Argentine oil production has steadily declined. In 2009, the country was still the third largest oil producer of Latin America, with an estimated 790,000 bbl/d. The&nbsp; country consumed an estimated&nbsp; 580,000&nbsp; bbl/d, with net exports of 210,000 bbl/d.</p>

Main sources of Energy: 

<p>
Total installed electricity capacity (2009): up to 28 GW.<br />
Natural gas &amp; oil: 50-60%<br />
Hydro-electricity: 30-40%<br />
Nuclear: 4-9%.<br />
<br />
Due to low operating costs and low pollution intensity, hydro-electrical power generation is very developed.<br />
<br />
Argentina is South America&#39;s largest natural gas producer and a significant producer of oil.&nbsp; It has 2.5 billion barrels of proven oil reserves in 2011 and is largely self-sufficient in energy production.<br />
<br />
Relatively low levels of exploration activity and maturing fields mean Argentina&acute;s oil production has fallen from its peak of 1998. However, oil company Repsol YPF, which has since been renationalized, announced a discovery of around 1 billion barrels of technically recoverable shale oil in 2011 (November 7, 2011). Although accessing this will depend on attracting investment from international oil companies with advanced technology.</p>

Country: 

Argentina

Extent of the network: 

<p>
National electrification rate (2003): 95%<br />
In urban areas: 98%<br />
In rural areas: 70%.</p>

Capacity concerns: 

<p>
Since 2004 Argentina experienced energy rationing and shortages due to a drought that led to lost hydroelectric output, and a general lack of investment in the natural gas sector, which meant gas supplies could not keep up with demand1. The energy sector continues to suffer from underinvestment.<br />
<br />
The deterioration in distribution company services (i.e. cables, transformers, etc) also has the potential to endanger supply.</p>

Potential for Renewable Energy: 

<p>
Industry observers believe that Argentina has the potential to significantly expand its hydroelectric generating capacity, as the country has only exploited an estimated 20% of its surveyed hydroelectric potential.<br />
<br />
<b>Hydropower</b><br />
There are currently 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 Yacyret&aacute; 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 Paran&aacute; (Argentina and Paraguay) is under evaluation by both governments.<br />
<br />
<b>Wind energy</b><br />
The Argentine region has a very large wind potential. The Chubut Wind Power Regional Centre (CREE) estimated the theoretical potential for the region at 500 GW of electricity generation. This large potential is still largely unexploited. One of the reasons for this underdevelopment is that 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 <i>L&iacute;nea Patag&oacute;nica</i>, under the framework of the <i>Plan Federal de Transporte de Energ&iacute;a El&eacute;ctrica</i> eliminated this bottleneck in March 2006. Argentina installed new wind turbines in 2010 with a capacity of 25,3 MW.<br />
<br />
<b>Solar energy</b><br />
In April 2011, the first solar energy park in Latin America, Photovoltaic Pilot Plant San Juan I, opened in Ullum, province of San Juan. It is the first in a series of seven alternative energy ventures, including the photovoltaic plants of Ca&ntilde;ada Honda (Sarmiento), and La Chimbera (May 25), which will produce a total of 20 MW, the energy consumed by approximately 25,000 homes.</p>

Potential for Energy Efficiency: 

<p>
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. Its objective is to reduce electricity consumption by 6%.<br />
<br />
The <i><b>Energy Secretariat</b></i> is developing the &quot;Energy Efficiency Project in Argentina&quot; to which has the support of a grant of the Global Environment Facility (GEF) for a total of U.S. $ 15.155 million, disbursed through the World Bank in its role of implementing agency of GEF.</p>
<p>
The grant was approved by Decree No. 1253-1209, published in the Official Gazette on 17/09/2009.<br />
<br />
<strong>Industry</strong></p>
<ul>
<li>
5.6% savings target in the sector by 2016.</li>
<li>
Dissemination of EE best practices, improvement of ESCO capacity, and process optimisation in heavy industry.</li>
</ul>
<p>
<strong>Utilities</strong></p>
<ul>
<li>
National Plan for Renewable Energies &ndash; 1,000 MW of new capacity planned.</li>
<li>
&gt;40% CCGT usage in power generation.</li>
<li>
FIT programme for RE production.</li>
</ul>
<p>
<strong>Transport</strong></p>
<ul>
<li>
Motor vehicle labelling program design, management improvement in collective transport, and GEF assistance in wide-ranging sustainability improvements.</li>
<li>
Promotion of less intensive and cleaner modes of transport, including sustainable development policies.</li>
</ul>
<p>
<strong>Residential</strong></p>
<ul>
<li>
Accelerated phase-out of incandescent bulbs, with 25 million CFLs distributed in the residential sector through GEF funding.</li>
<li>
Minimum efficiency standards for household appliances, and awareness-raising activities for consumers.</li>
<li>
Educational Programmes: Daylight Saving Plan.</li>
</ul>
<p>
<strong>Public</strong></p>
<ul>
<li>
10% savings target in the sector by 2016.</li>
<li>
GEF-funded EE program, including capacity-building in both the public and private sectors for EE services market participation.</li>
<li>
Municipal lighting efficiency improvement projects.</li>
</ul>

Ownership: 

<p>
<b>Electricity market</b><br />
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.<br />
<br />
In 2004, in response to the energy crisis, <i><b>Energ&iacute;a Argentina Sociedad An&oacute;nima</b></i> <i>(Enarsa) </i>has been created, a company managed by the national state of Argentina for the exploitation and commercialization of petroleum and natural gas but also the generation, transmission and trade of these and of electricity. Through the creation of Enarsa, the state seeks to regain a relevant place in the energy sector.<br />
<br />
<b>Liquid fuels market </b><br />
Argentina claims ten refineries with a combined 627,075 bbl/d of crude refining capacity. The recently re-nationalised Repsol-YPF company dominates production and exploration of gas and oil (39% of oil production). The vast majority of capacity derives from just four refineries: YPF&#39;s refinery in La Plata (189,000 bbl/d), Shell&#39;s refinery in Buenos Aires (110,000 bbl/d), YPF&#39;s recently upgraded refinery in Lujan de Cuyo (105,500 bbl/d), and ExxonMobil&#39;s refinery in Campana (87,000 bbl/d).<br />
<br />
<b>Gas market </b><br />
Repsol-YPF produced during 2003 33% of the country&rsquo;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 Argentina&rsquo;s natural gas transmission system. The distribution portion of Argentina&rsquo;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.<br />
<br />
<b>Nuclear market</b><br />
<i><b>Nucleoel&eacute;ctrica Argentina S.A. (NASA)</b></i> is the company that has been generating electric energy from nuclear power since 1994. In 2006, the government announced an initiative to revitalize the nuclear power industry in the country.</p>

Structure / extent of competition: 

<p>
The electricity sector has unbundled the controlling interests in generation, transmission, and distribution.<br />
<br />
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 Compa&ntilde;&iacute;a Administradora del Mercado Mayorista El&eacute;ctrico (CAMMESA).&nbsp; The distribution sector is more heavily regulated and less competitive, with three primary distribution companies (Edenor, Edeusr and Edelap) controlling the market.</p>

Existence of an energy framework and programmes to promote sustainable energy: 

<p>
To deal with the energy crisis, the Government introduced different plans and programs.<br />
<br />
<i><b>National Energy Plan 2004-2008 (Plan Energ&eacute;tico Nacional)</b></i>. This plan contemplates several mechanisms to be applied during the specified period of time.&nbsp;<br />
<br />
Some of the measures are:<br />
- Implementation of the Argentine-Venezuelan Agreement for the provision of fuel oil.<br />
- Continuous importation form Brazil.<br />
- Execution of the rational energy consumption program for natural gas and electric energy.<br />
<br />
Emergency Programs: with <i><b>Energ&iacute;a El&eacute;ctrica Distribuida I </b></i>and <i><b>II Programmes</b></i>, ENARSA installed small transportable units and floating power plants to support main Argentine provinces during periods of peak generation.<br />
<br />
New projects directed to increase the Argentinean generation capacity such as Atucha II.&nbsp; This 750 MW NucleoEl&eacute;ctrica Argentina S.A. (NASA) nuclear plant remains under construction.<br />
<br />
Rural electrification program with renewable energies (<i><b>Programa de Energ&iacute;as Renovables en Mercados El&eacute;ctricos Rurales - PERMER</b></i>) which was due to end in 2008, but has been extended to 2011.</p>

Current energy debates or legislation: 

<p>
Argentina&rsquo;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.&nbsp; 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.<br />
<br />
The Argentinean President created a diplomatic row with Spain when she sent a bill to congress outlining a renationalisation of the Argentinean arm of Spanish oil company Repsol in 2012. Argentina said&nbsp;the private company had been failing to invest in the sector, forcing the government to pay more than $9bn to import fuel in 2011. The company argues that the structure of the Argentinean market does not incentivize investment due to artificially low consumer prices.</p>

Major energy studies: 

<p>
The Energy Secretariat conducts market studies and analysis to carry out strategic plans and policies on energy.</p>

Role of government: 

<p>
The <i><b>Energy Secretariat (SENER)</b></i> is in charge of national energy policy. The Secretariat may coordinate and supervise the provinces, and implement regulatory frameworks.<br />
<br />
<i><b>The National Promotion Direction (DNPROM) </b></i>within <i><b>SENER</b></i> is responsible for the design of programs and actions conducive to the development of renewable energies (through the <i><b>Renewable Energy Coordination</b></i>) and energy efficiency (through the <i><b>Energy Efficiency Coordination</b></i>) initiatives. Complementarily, the <i><b>Secretariat for the Environment and Natural Resources (SEMARNAT)</b></i> is responsible for environmental policy and the preservation of renewable and non-renewable resources.<br />
<br />
The <i><b>Federal Council of Electric Power</b></i> (CFEE) within <i><b>SENER</b></i> is in charge of managing specific funds whose only destination is the electricity sector and to advise the Executive Branch and Provincial Governments in regard to the electric industry, utilities and private energy priorities in the execution of studies and works, concessions and authorizations, pricing and tariffs in the electricity sector. It must also advise the amendments required legislation electrical industry.</p>

Government agencies in sustainable energy: 

<p>
The <i><b>Ministry of Federal Planning</b></i> is analysing the scope for renewable energy to reduce dependence on fossil fuels and hydro-electricity.<br />
<br />
The <i><b>Energy Efficiency Commission</b></i> promotes efficient use of energy in Argentina. The objectives are to reduce cost for consumers as well as energy sustainability.<br />
&nbsp;</p>

Energy planning procedures: 

<p>
N/A</p>

Energy regulator Date of creation: 

<p>
<b>Electricity industry</b><br />
<i><b>National Entity of Electricity Regulation</b></i> created in 1991.<br />
<a href="http://www.enre.gov.ar/">http://www.enre.gov.ar/</a><br />
<br />
<b>Natural gas industry</b><br />
<i><b>National Entity on Gas Regulation</b></i> created in 1992.<br />
<a href="http://www.enargas.gov.ar">http://www.enargas.gov.ar</a></p>

Degree of independence: 

<p>
The Board is composed of 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 agreement of the Commission of the National Congress.</p>

Regulatory framework for sustainable energy: 

<p>
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.</p>

Regulatory roles: 

<p>
National Entity of Electricity Regulation:<br />
Regulation of electricity tariffs.<br />
Enforcement of competition law in the electricity industry.<br />
Licensing transmission and distribution activities.<br />
<br />
National Entity on Gas Regulation:<br />
Price regulation for transportation and distribution of natural gas.<br />
Enforcement of competition law in the gas industry.<br />
Safety regulations for the transportation and distribution of natural gas.</p>

Role of government department in energy regulation: 

<p>
Government Departments have delegated regulatory tasks to the National Entity of Electricity Regulation and to the National Entity of Gas Regulation.</p>

Regulatory barriers: 

<p>
The government&rsquo;s continued lack of a strong regulatory presence in the energy sector is a key driver of the lack of investment in the sector. The state&acute;s seizure of YPF from Spanish oil company Repsol in 2012 may further discourage international companies from making costly but much-needed infrastructure investments in the country.&nbsp; The result of this failure to attract investment is that, since July 2007, Argentina has become a net importer of electricity and fuels for the first time in decades.</p>

References: 

Secretar&iacute;a de Energ&iacute;a de Argentina. Historical Series on Electrical Energy. Available at: <a href="http://energia3.mecon.gov.ar/contenidos/verpagina.php?idpagina=3140">htt... [Accessed 17th September 2013]<br />
<br />
EIA. Argentina Country Analysis. June 2011. Last updated July 2012 Available at: <a href="http://205.254.135.7/countries/cab.cfm?fips=AR">http://205.254.135.7/cou... 17th September 2013]<br />
<br />
Financial Times. Repsol announces big shale oil find in Argentina. 7 November 2011. Available at: <a href="http://www.ft.com/cms/s/0/b77004b0-0969-11e1-a20c-00144feabdc0.html">htt... 17th September 2013]<br />
<br />
CIA World Factbook. Argentina. Last updated August 2013. Available at: <a href="https://www.cia.gov/library/publications/the-world-factbook/geos/ar.html... 17th September 2013]<br />
<br />
OECD. Energy policies of IEA countries: 2004 Special Review. OECD publishing 2004. Available at: <a href="http://books.google.co.uk/books?id=NItGY84BX_EC&amp;dq=since+2004+argent... 17th September 2013]<br />
<br />
World Wind Energy Association. World Wind Energy Report 2010. Cairo, Egypt, October 2011. Available at: <a href="http://www.wwindea.org/home/images/stories/pdfs/worldwindenergyreport201... 17th September 2013]<br />
<br />
AEN. San Juan: Primer parque solar de Latinoamerica. 20 April 2011. Available at: <a href="http://www.portalesargentina.com.ar/index.php?option=com_content&amp;vie... 17th September 2013]<br />
<br />
Energia Argentina S.A. <a href="http://www.enarsa.com.ar/index.php/en/">http://www.enarsa.com.ar/index.p... 17th September 2013]<br />
<br />
Ministry of Federal Planning, Public Investment and Services. <a href="http://www.cfee.gov.ar/org_perfil.php?screen_check=done&amp;Width=1280">... 17th September 2013]<br />
<br />
Secretar&iacute;a de Energ&iacute;a.&nbsp;<a href="http://www.energia.gov.ar/home/">http://www.energia.gov.ar/home/</a> [Accessed 17th September 2013]<br />
<br />
Ente Nacional Regulador de la Electricidad. <a href="http://www.enre.gov.ar/">http://www.enre.gov.ar/</a> [Accessed 17th September 2013]<br />
<br />
Ente Nacional Regulador del Gas. <a href="http://www.enargas.gov.ar/">http://www.enargas.gov.ar/</a>&nbsp;[Accessed 17th September 2013]<br />
<br />
Nucleoel&eacute;ctrica Argentina S.A.. <a href="http://www.na-sa.com.ar/">http://www.na-sa.com.ar/</a>&nbsp;[Accessed 17th September 2013]<br />