Corporate PPAs hit 33% of Argentina’s installed wind capacity
Argentina’s unregulated market accounts for a third of its fledgling 1.1GW wind sector as a growing number of companies are opting to buy energy directly through corporate power purchase agreements (PPAs) signed with generators.
The latest addition to that market known as MATER is the 113MW Pomona wind power complex built by local power group Genneia.
Pomona 1 and 2 will supply power to three private companies (Arlei, Meranor and Amcor) in the petrochemical and leather industries, with contract tenures ranging from 15 to 20 years. Germany’s Nordex Group supplied the turbines in one of it’s biggest deals in the Latin American region.
The Pomona complex will add to the 300MW wind and 18MW of solar plants that are supplying power exclusively in the non-regulated market. This comes as large energy consumers are opting for such power supply models to meet the legally-binding target of having 20% their consumption come from non-hydro renewables.
According to the 2015 renewables energy law, Argentina has to reach 20% of its power supply from non-hydro renewable sources, up from 4.8% today and under 2% in 2015. This means the country could need an estimated 10GW of renewable power capacity.
The law includes the companies which can buy directly from generators or build their own generation projects. The unregulated market is estimated at 1GW yr since any firm with power demand equivalent to 300kW can opt out of the regulated market.
These companies are also seeking economic advantages since renewable energy prices in the non-regulated market – which are not disclosed – are considered well below those in the regulated market. As a reference, wind power prices in the regulated market are around $50/MWh, while average regulated market prices can be twice or three times that value.
The mix of mandated targets, lower prices and marketing opportunities are stimulating companies to seek renewables. The three off-takers for the Pomona complex, for example, want to go beyond the 20% target and plan to reach 100% renewable energy supply by 2025, Genneia said in a statement.
Anothe 700MW of wind and solar projects are currently being built to sell power in the non-regulated market, data from the government’s power grid operator Cammesa showed.
Like other power groups, Genneia one of the largest companies operating the country’s renewable energy sector with 410MW in operation and 353MW under construction in both the regulated and non regulated markets.