Renewable Energy Under-Secretary Sebastián Kind talks to the Herald before first auction
Seeking to lower energy imports, the national government is moving forward with a wide plan to boost renewable energy in Argentina, hoping to auction 10 gigawatts during President Mauricio Macri’s term.
The first step will be taken in a few months when the bids for the first auction are received, aiming to add one gigawatt to the grid with an investment that could reach US$1.8 billion — from both local and foreign companies.
In an interview with the Herald, Renewable Energy Under-Secretary Sebastián Kind said Argentina has become the main destination in Latin America for investment in renewable energy. He said the government is striving to reach the Renewable Energy Law’s goal to have eight percent of the country’s energy matrix based on renewables by 2017.
What changed for the renewable energy sector in Argentina since Macri took office?
Argentina is back on the international capital market and that benefited all sectors, including renewable energy, which has became appealing for many local and foreign investors. We have a long-term plan and the Renewable Energy Law is the main part of it, sanctioned during Kirchnerism.
There are many other countries in the region with a long-history on renewable energy. Why invest in Argentina and not there?
Argentina is now the main destination in Latin America for investment in renewable energy. Uruguay has already exploited all of its resources, while investment is also lower in Chile, Perú and México. Argentina is now the main opportunity and the world knows that. We did road shows to announce the auction and there was a large interest.
The government launched a preliminary phase of the auction, receiving in August the final offers. Why did you choose to follow that path?
We wanted to get feedback on how to improve the process and make the investors who were doubting on whether to invest or not more comfortable. We had meetings with everybody and received a long list of comments, some of which will be used to change the auction. There’s plenty of interest.
What changes will be done to the auction?
It will be more flexible. Instead of asking companies to have a US$500,000 patrimony, we will ask for US$250,00. At the same time, the US$50,000 requested guarantee will be lowered to US$35,000. We want to have the largest amount of bids possible.
Are you planning to do another auction this year?
Our plan is to auction a total 10 gigawatts of renewable energy. This is only the first step but an important one. Other auctions will follow on the near future.
Can Argentina have competitive prices for renewable energy such as the rest of Latin America?
The region reached those prices because it did a lot of things previously. Now we are following the same path to have the most logical prices we can. It will be hard to be on the same level as we started on different conditions. Nevertheless, prices could be a third of what they were last year.
What’s the expected investment for the first auction?
We aim at an investment of between US$1.5 and US$1.8 billion. The costs have dropped a lot on solar and wind energy and Argentina will take advantage of that.
What will be the role of the domestic industry?
We want to look after the domestic industry and we won’t do anything against it. But that doesn’t mean that we won’t exploit our resources if local companies can’t exploit them. We want to develop the sector in a balanced way and have a mix of domestic and foreign investment. We are taking measures for that to happen.
Can provincial taxes end up affecting projects?
In the case of provinces that have agreed to the Renewable Energy Law, the state will absorb any taxes. That’s why we are asking all provinces to say yest to the law. Some did but it’s an ongoing process. If they don’t agree, it could hurt them as a project could end up being carried out elsewhere.
There’s a bill in Congress that seeks to allow citizens to generate their own renewable energy and then sell it to the grid. Will the government back that initiative?
Yes, we will support it. In the next few weeks we will make our position public.
Based on the Renewable Energy Law, Argentina should have eight percent of its matrix based on renewable energy by next year, much higher than the current rate of less than one percent. Is that a realistic goal?
We are striving to reach those goals. Congress took a long time to sanction the law. If that hadn’t been the case, we would have had time to spare to fulfill those goals. The good thing is that the law was passed with a wide consensus and that’s important to attract investments.
Can Argentina have in the future an energy matrix fully based on renewable energy?
Yes, it can. But renewables need technology to storage the energy as it’s an intermittent technology. The only way to break the 20 percent barrier of renewables in an energy matrix is by being able to store the energy. We’ll be able to do that in the near future but not today. Diversifying Argentina’s energy matrix is very necessary.
@ferminkoop
Seeking to lower energy imports, the national government is moving forward with a wide plan to boost renewable energy in Argentina, hoping to auction 10 gigawatts during President Mauricio Macri’s term.
The first step will be taken in a few months when the bids for the first auction are received, aiming to add one gigawatt to the grid with an investment that could reach US$1.8 billion — from both local and foreign companies.
In an interview with the Herald, Renewable Energy Under-Secretary Sebastián Kind said Argentina has become the main destination in Latin America for investment in renewable energy. He said the government is striving to reach the Renewable Energy Law’s goal to have eight percent of the country’s energy matrix based on renewables by 2017.
What changed for the renewable energy sector in Argentina since Macri took office?
Argentina is back on the international capital market and that benefited all sectors, including renewable energy, which has became appealing for many local and foreign investors. We have a long-term plan and the Renewable Energy Law is the main part of it, sanctioned during Kirchnerism.
There are many other countries in the region with a long-history on renewable energy. Why invest in Argentina and not there?
Argentina is now the main destination in Latin America for investment in renewable energy. Uruguay has already exploited all of its resources, while investment is also lower in Chile, Perú and México. Argentina is now the main opportunity and the world knows that. We did road shows to announce the auction and there was a large interest.
The government launched a preliminary phase of the auction, receiving in August the final offers. Why did you choose to follow that path?
We wanted to get feedback on how to improve the process and make the investors who were doubting on whether to invest or not more comfortable. We had meetings with everybody and received a long list of comments, some of which will be used to change the auction. There’s plenty of interest.
What changes will be done to the auction?
It will be more flexible. Instead of asking companies to have a US$500,000 patrimony, we will ask for US$250,00. At the same time, the US$50,000 requested guarantee will be lowered to US$35,000. We want to have the largest amount of bids possible.
Are you planning to do another auction this year?
Our plan is to auction a total 10 gigawatts of renewable energy. This is only the first step but an important one. Other auctions will follow on the near future.
Can Argentina have competitive prices for renewable energy such as the rest of Latin America?
The region reached those prices because it did a lot of things previously. Now we are following the same path to have the most logical prices we can. It will be hard to be on the same level as we started on different conditions. Nevertheless, prices could be a third of what they were last year.
What’s the expected investment for the first auction?
We aim at an investment of between US$1.5 and US$1.8 billion. The costs have dropped a lot on solar and wind energy and Argentina will take advantage of that.
What will be the role of the domestic industry?
We want to look after the domestic industry and we won’t do anything against it. But that doesn’t mean that we won’t exploit our resources if local companies can’t exploit them. We want to develop the sector in a balanced way and have a mix of domestic and foreign investment. We are taking measures for that to happen.
Can provincial taxes end up affecting projects?
In the case of provinces that have agreed to the Renewable Energy Law, the state will absorb any taxes. That’s why we are asking all provinces to say yest to the law. Some did but it’s an ongoing process. If they don’t agree, it could hurt them as a project could end up being carried out elsewhere.
There’s a bill in Congress that seeks to allow citizens to generate their own renewable energy and then sell it to the grid. Will the government back that initiative?
Yes, we will support it. In the next few weeks we will make our position public.
Based on the Renewable Energy Law, Argentina should have eight percent of its matrix based on renewable energy by next year, much higher than the current rate of less than one percent. Is that a realistic goal?
We are striving to reach those goals. Congress took a long time to sanction the law. If that hadn’t been the case, we would have had time to spare to fulfill those goals. The good thing is that the law was passed with a wide consensus and that’s important to attract investments.
Can Argentina have in the future an energy matrix fully based on renewable energy?
Yes, it can. But renewables need technology to storage the energy as it’s an intermittent technology. The only way to break the 20 percent barrier of renewables in an energy matrix is by being able to store the energy. We’ll be able to do that in the near future but not today. Diversifying Argentina’s energy matrix is very necessary.
@ferminkoop
