Interenergy, a subsidiary of Argentine oil and gas company Capsa Capex, is investing $11 million in a pilot wind-hydrogen project in the country's windy Patagonia region. The project will use five to six 1 MW turbines or three 2 MW machines, says the company's Sergio Raballo. Two German wind project developers, ABO Wind and Juwi GmbH, have been shortlisted to develop the wind side. "We contacted 15 European developers," he says. The response was mixed, with some developers already booked up, others unwilling to work in Argentina and others failing to respond. The selection of ABO Wind or Juwi will be made by the end of this month, he says. Decisions on the hydrogen side of the project will be made in July or August. Patagonia's average wind speeds are a high 8-10 m/s, providing a 40-45% capacity factor, says Raballo. The plan is for 2 MW of the wind capacity to be used to power hydrogen production, with the remaining generation to be fed into Argentina's national grid. Interenergy has already run up against the global shortage of wind equipment. "The timeframe to receive equipment such as wind turbines is one-and-a-half years. Interenergy will only be able to start operations in the second half of 2008, due to equipment shortage," says Raballo. Another hurdle is the low price of oil in Argentina. "Prices are at around $20-22/MW compared to Europe at $40/MW," Raballo notes. "We know that there is no payback for the 4 MW to the grid, but the aim is to get experience in developing and operating a wind plant, rather than to be profitable."