Economy of Argentina - Energy

Energy

Electricity generation in Argentina totaled 122.3 billion Kwh in 2009, and consumption, 123.3 billion Kwh in 2011. The electricity sector in Argentina constitutes the third largest power market in Latin America. It relies mostly on natural gas power generation (51%), hydroelectricity (28%), and oil-fired generation (12%). Reserves of shale gas and oil in the Vaca Muerta oil field and elsewhere are estimated to be the world's third-largest.

The first of the country's three nuclear reactors was inaugurated in 1974, and nuclear power generated 7% of the total in 2009. New renewable energy technologies are barely exploited, however, and the country still has a large untapped hydroelectric potential. Wind energy is the fastest growing among new renewable sources. Fifteen wind farms have been developed since 1994 in Argentina, the only country in the region to produce wind turbines. The 55 MW of installed capacity in these in 2010 will increase by 895 MW upon the completion of new wind farms begun that year.

Faced with rising electricity demand (over 5% annually) and declining reserve margins, the government of Argentina is in the process of commissioning large projects, both in the generation and transmission sectors. To keep up with rising demand, it is estimated that about 1,000 MW of new generation capacity are needed each year. An important number of these projects are being financed by the government through trust funds, while independent private initiative is still limited as it has not fully recovered yet from the effects of the Argentine economic crisis.

The electricity sector was unbundled in generation, transmission and distribution by the reforms carried out in the early 1990s. Generation occurs in a competitive and mostly liberalized market in which 75% of the generation capacity is owned by private utilities. In contrast, the transmission and distribution sectors are highly regulated and much less competitive than generation.