Uruguay to export wind energy to Argentina

URUGUAY/ARGENTINA: Under a pioneering deal between two private companies, wind-generated electricity from Uruguay will be exported to neighbouring Argentina.

Ventus owns 70MW of wind capacity in operation or under construction

The deal was signed between Uruguayan wind farm developer Ventus and Argentinian energy trader Saesa.

Uruguay and Argentina already trade electricity through a deal between their respective state energy companies covering electricity from the 1,890MW Salta Grande hydroelectric dam on the Uruguay River that divides the two countries. This, however, is the first power export deal between two private companies.

"This is a key event in Uruguay's energy history. It is very important that Uruguayan private generating companies export alternative power and, at the same time, there is a great interest in Argentina due to its deep power deficit," said Ventus director Francis Raquet.

Uruguay's wind sector is expanding rapidly, with total capacity expected to hit 1.2GW by the end of 2016. In Argentina, only 8MW of new wind capacity was installed in 2015, taking the country's total to 279MW.

The deal still needs to be approved by authorities in both countries before exports can begin.

Ventus currently owns 70MW of wind capacity in operation or under construction.

The deal initially covers exports equivalent to 10MW of installed capacity, but the two parties have already signed a letter of intent for up to 80MW, implying exports of up 250GWh annually, according to Saesa president Juan Bosch.

The announcement comes just days before Argentinian authorities are expected to announce the details of the country's first tender for renewable energy.

According to Bosch, the electricity imported from Uruguay cannot count towards meeting Argentina's targets as electricity has to be produced by projects in the country to be eligible. But it would help some large energy consumers fulfil corporate mandates to source electricity from renewable sources.

Electricity produced by wind turbines in Uruguay is competitive against the mix of conventional power generation that dominates supply in Argentina.

"There are some who claim that renewable energy cannot compete on price, but we are convinced that it can," Bosch said.