The project is the first to be delivered under the Genren renewable-energy auction system, which commissioned 754MW of capacity out of nearly 1.3GW of wind projects offered in June 2010. The second round of Genren was launched in May, intending to assign 17 wind contracts, plus 17 spread across four other renewable sources.
In 2007, Argentina set a goal to produce 8% of its power from renewable sources by 2016. Around 1GW is needed to comply with this, half of which would come from wind farms, according to the Argentinian Wind Energy Association (AAEE).
The Argentinian energy ministry reports that 59% of its electrical power came from gas-fuelled power stations in 2009, the last year for which statistics are available. That same year 33% came from hydropower and 8% from nuclear.
The second round of Genren, which was closed to bidders from the first round, generated just over 1.2GW of wind offers, but the government halted the wind process mid-way because so many projects commissioned in the first round had stalled.
"The basic problem with Genren 1 has been a lack of financing," said AAEE president Erico Spinadel. AAEE identified financing problems at five Genren 1 projects. Four of these are projects assigned to Impsa Wind: two wind farms at Malaspina in Chubut, together worth 80MW; and 75MW in two projects at Kuluel Kaike in Santa Cruz. A 50MW plant being developed by Spain's Isolux-Corsan at Lomo Blanco in Chubut is also in the balance.
Financial problems have dogged Argentina since the mid-1990s, when an overvalued peso began pressuring the economy. This led to a catastrophic devaluation of around 75% overnight in late 2001, which was followed by the world's largest ever government debt default.
Banks and other investors are usually reluctant to lend to private firms and local governments in nations where the central government has trouble paying its bills. Argentina's government restructured its defaulted debt twice, removing two-thirds of its remaining bonds and allowed the nation to return to capital markets.
Spinadel indicated that this may have led to more funds flowing to wind projects. "I have been speaking to electricity cooperatives and it seems there are going to be funds for research worth ARS 450 million ($105 million)," he said.
However, the bounceback may prove to be short-lived because the peso has been under pressure again for most of 2011 and will almost certainly have to be devalued. Argentina has spent around $100 million a day trying to hold the peso at close to its official rate of around 4.25 to the dollar during November.
Another problem holding Argentine wind back is that the country's development bank is not as powerful as neighbouring Brazil's BNDES and power purchasing agreements have 15-year terms rather than the 20-year contracts seen in Brazil and Uruguay.
Even before current worries, these factors meant that Argentine wind-power prices were the highest in the region. Uruguay launched two rounds of 150MW each and achieved a price low of $62/MWh in the second round. It is now launching a third round for 450MW with a price ceiling of $65/MWh. According to the AAEE, Argentina has to pay more than $135/MWh.
