Wind is cheapest in latest Argentina tender

ARGENTINA: Eight wind farms with an installed capacity of almost 666MW were awarded power purchase agreements (PPA) in the second round of auctions to supply renewable power to regulated clients.

Domestic developer Genneia was awarded PPAs for two projects totalling 140MW (pic: Genneia)
Domestic developer Genneia was awarded PPAs for two projects totalling 140MW (pic: Genneia)

The contracts were awarded at an average price of US$41.23/MWh, down from $53.34/MWh in the previous round. The lowest contracted price was $37.30/MWh, and the highest $46.67/MWh.

Energy minister Juan José Aranguren attributed the fall in prices to lower technology costs and growing investor confidence in the country.

"We now have tariffs similar to those elsewhere that have lower country risk than our own," he said.

The result means that wind energy is once again the cheapest technology in Argentina, beating the 12 solar PV projects, which achieved an average price of $43.46/MWh.

The main winner was domestic renewables deeveloper Genneia, which was was awarded contracts for two wind farms in the southern province of Chubut with a combined capacity of 140MW.

Other winners included turbine manufacturer Senvion, power firm Central Puerto SA, and state oil giant YPF.

Due to the number of competitive offers that missed out on contracts due to the regional quota system, the energy ministry announced a second phase to the tender in which it would seek the equivalent to 50% of the original quota for each technology, 275MW in the case of wind power.

The new wind energy offers, which must be presented within ten days, will be subject to a new ceiling price of $40.27/MWh, the average price for projects in the core wind regions of Buenos Aires, Cuyo, and Patagonia.

This time developers will be responsible for resolving any restrictions in transmission capacity.

Aranguren said the additional tender would mean that the government will have awarded contracts for 5GW of renewable energy capacity, equivalent to half the capacity required for the country to meet its target of securing 20% of its electricity from renewables by 2025.

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