The first renewable energy tenders will be offered by end May, energy minister Juan Jose Aranguren announced after publishing rules to implement a new renewable energy law.
Previous attempts to develop Argentina's renewables potential failed due to a lack of political support, said Juan Bosch, president of energy trading firm Saesa.
It took the government three years to publish rules for the 2006 law, which had originally aimed for the country to receive 8% of its electricity from renewable sources by 2016 — now pushed back to end 2017.
The lack of clear policy support combined with Argentina's difficult macroeconomic conditions left many investors struggling to secure financing.
Only 188MW was built under the 2006 law, bringing the country's current total installed capacity to 279MW — compared with roughly 900MW in neighboring Chile and Uruguay and more than 9GW in Brazil.
But with Argentineans regularly suffering power cuts and rapidly rising electricity tariffs as the government withdraws huge energy subsidies, the debate has been transformed, Bosch said.
"The difference is now there is a consensus about the need for renewable energy," he said at a recent seminar on Argentina's renewable potential in Santiago, Chile.
Renewable energy law 27,191 received unanimous congressional approval in 2015 during a bitter presidential election. The centre-right candidate Mauricio Macri was elected as president in a surprise victory.
The new government has taken the legislation as its own, appointing the law's author, Sebastian Kind, as undersecretary for renewable energy at the newly created ministry of energy.
Speaking in New York in April, energy minister Juan Jose Aranguren described renewable energy as central to his government's efforts to resolve Argentina's energy crisis. Of the 20GW of capacity the country needs to install over the next decade, around half will come from renewable sources and largely from wind farms.
Argentina's wind power potential is huge. Around half of the country, the world's eighth largest by area, offers a potential capacity factor of 40% or more, said Diego Werner of consultants Aires Renewables at the Santiago event.
The new law, the details of which were finalised in March, promises to make that potential a reality.
Incentives
Under the legislation, a rising quota of electricity supplied to regulated and private consumers must come from renewables, including wind, solar, hydroelectric and biomass plants with up to 50MW of capacity.
This quota starts at 8% from 31 December 2017, rising by around 4% every two years (around 2GW), until it reaches 20% by 2025.
As well as guaranteed demand, the new law offers investors considerable economic and tax incentives, including accelerated depreciation of assets, anticipated return of valued added tax payments, and exemptions to corporate and import taxes.
The government is also negotiating an AAA investment-grade credit rating for the guarantees offered against the power purchase agreements if the off-taker does not fulfill the contract.
Projects will be able to sell electricity either to regulated clients, via state-run wholesale market Cammesa, or offer it to more than 8,000 private clients.
The government's first challenge will be to hold the debut tender for renewable energy. Initially scheduled for April, the tender invitation is now expected to receive its official launch in late May, with offers due two to three months later, estimated Werner.
Developers will then have just over a year to build their projects to comply with the end 2017 deadline. Although there are around 70 wind projects in Argentina at different stages of development, just 15 or so, totalling almost 900MW, are sufficiently advanced to meet next year's deadline.
