Abstract
Argentina has a role to play in the energy transition. Its gas, solar, wind, hydrogen and lithium resources can be exported to contribute with the net zero economy. This chapter studies the past, present and future of the Argentine energy mix and energy policy, with a focus on the opportunities and challenges that Argentina will face during the following decades.
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Notes
- 1.
Pre-industrial levels refer to the period between 1850 and 1900.
- 2.
The recent US presidential election win by Joe Biden has resulted in the release of a clean-energy plan that includes a decarbonisation target by 2050 and carbon-free electricity by 2035.
- 3.
Argentina has presented two NDCs with short- to medium-term targets, that is, until 2030. The second NDC went even further than the first one and increased the original reduction commitment to 26% by 2030. The emissions shall not exceed 359 MtCO2, while the last record shows that emissions are 364 MtCO2.
- 4.
The total internal energy offer in 2018 was distributed as follows: 58% natural gas, 28% crude oil, 5% hydraulic, 3% renewables, 2% biofuels, 2% carbon and 2% nuclear. Data taken from Secretaría de Gobierno de Energía, ‘Escenarios Energéticos 2030. Documento de síntesis’ (2019), http://www.energia.gob.ar/contenidos/archivos/Reorganizacion/planeamiento/2019-11-14_SsPE-SGE_Documento_Escenarios_Energeticos_2030_ed2019_pub.pdf, last accessed 10 April 2021.
- 5.
Climate Transparency, ‘Brown to Green: The G-20 Transition to a Low-Carbon Economy’ (Brown to Green Report, 2018), https://www.climate-transparency.org/wp-content/uploads/2019/01/BROWN-TO-GREEN_2018_Argentina_FINAL.pdf, last accessed 15 April 2021.
- 6.
Ministerio de Ambiente y Desarrollo Sostenible, ‘Inventario Nacional de Gases de Efecto Invernadero y Monitoreo de Medidas de Mitigación’ (2019), https://inventariogei.ambiente.gob.ar/files/inventario-nacional-gei-argentina.pdf, last accessed 14 April 2021.
- 7.
The emissions generated by the energy sector are distributed as follows: 33% energy industry (i.e. power generation, fuel production and oil refining); 26% transportation by land, sea and air; 18% other sectors including residential, commercial and agriculture use of energy; 17% construction and manufacturing; and 6% fugitive emissions caused by oil and gas flaring and venting.
- 8.
Akoz Losz and Jonathan Elkind, ‘The Role of Natural Gas in the Energy Transition’ (2019) Columbia | SIPA Center on Global Energy Policy, https://www.energypolicy.columbia.edu/sites/default/files/pictures/Role%20of%20Gas%20in%20the%20Energy%20Transition_CGEP_Commentary_092319-2.pdf, last accessed 5 April 2021.
- 9.
The 2021 natural gas demand is estimated at 46,850MM m3. About 82% of demand is expected to be covered by local production and the remaining 18% by imports. Of the necessary imports to match demand, projections estimate that 10% will come from Bolivia and 8% from LNG imports. In winter, the import share is expected to increase to 26%.
- 10.
Faouzi Aloulou and Victoria Zaretskaya, ‘Growth in Argentina’s Vaca Muerta Shale and Tight Gas Production Leads to LNG Exports’ (2019) U.S Energy Information Administration, https://www.eia.gov/todayinenergy/detail.php?id=40093, last accessed 2 April 2021.
- 11.
Rystad Energy, ‘Argentina’s Vaca Muerta Tight Oil Deposit Is Now Producing at Record Levels, Matching US Well Scores’ (2021), https://www.rystadenergy.com/newsevents/news/press-releases/argentinas-vaca-muerta-tight-oil-deposit-is-now-producing-at-record-levels-matching-us-well-scores/, last accessed 1 April 2021.
- 12.
As of 2014, Vaca Muerta’s indicators have significantly improved by, inter alia, more than doubling the lateral length of the wells (from 3576ft to 7270ft), reducing well costs at around 40% and triplicating the fracture stages. In 2020, Vaca Muerta produced 38,289,635 crude oil barrels and over 60% of the country’s natural gas production. Data taken from FDC Consultants, ‘Analysis of Vaca Muerta Oil Wells 2014–2020’ (March 2021 Update), http://fdc-group.com/eventos/actualizacion-del-reporte-analisis-de-los-pozos-petroleros-de-vaca-muerta-2014-2020/, accessed 1 April 2021.
- 13.
For example, Argentina launched the ‘RenovAR’ and ‘MATER’ stimulus plans under which the wind and solar energy contribution to the power grid is estimated at 5012 MW.
- 14.
The Yacyretá Dam, which Argentina shares with Paraguay, and the Salto Grande Dam hold an aggregate estimate power output of over 5000 MW.
- 15.
The scope and terms of Federal Law No. 27,640 (including the mandatory blends, underlying rationale and term) will be covered in future and specific publications.
- 16.
The winds in the Patagonia are in average 10 m/s and the solar irradiance in the north-western areas reaches up to 7.4 kMWh/m2 (daily sum).
- 17.
Federal Law No. 26,190 created a promotional regime for renewables back in 2007. Later, it was amended by Federal Law No. 27,191 which implemented new mechanics (i.e. tax benefits and the Renewable Energy Development Trust) in order to boost the renewable energy share.
- 18.
CAMMESA stands for ‘Compañía Administradora del Mercado Mayorista Eléctrico S.A.’. It is the administrator of the Argentine power grid and the agent in charge of dispatch in the Wholesale Electricity Market (also known as MEM).
- 19.
The FODER trust fund is the Fund for the Development of Renewable Energies designed to act as a guarantee to CAMMESA’s payment obligations under the PPAs, payment of the project’s sale price or purchase price (under certain conditions the beneficiary may have the right to sell the project to the State or, as the case may be, the State may have the right to require the sale of the project) and provide overall financial support to renewable projects.
- 20.
Section 9 of Federal Law No. 27,191 individualises large users in the Wholesale Electric Market and large demands, both with an average consumption higher than 300 kW. It imposes the obligation to reach the projected targets by adjusting their individual electricity consumptions.
- 21.
IEA, ‘The Future of Hydrogen. Seizing Today’s Opportunities’ (2019), https://www.iea.org/reports/the-future-of-hydrogen, last accessed 4 April 2021.
- 22.
M. W. Melaina, O. Antonia, and M. Penev, ‘Blending Hydrogen into Natural Gas Pipeline Networks: A Review of Key Issues’ (2013) National Renewable Energy Laboratory, https://www.nrel.gov/docs/fy13osti/51995.pdf, last accessed 5 April 2021.
- 23.
See HyDeplot, ‘Hydrogen Is Vital to Tackling Climate Change’ (2021), https://hydeploy.co.uk/, last accessed 10 April 2021. Australia and the United States are also considering beginning tests.
- 24.
IEA, ‘Global EV Outlook 2020. Entering the Decade of Electric Drive?’, https://www.iea.org/reports/global-ev-outlook-2020 last accessed 4 April 2021.
- 25.
Columbia University in the City of New York | SIPA Center on Global Energy Policy, ‘Guide to Chinese Climate Policy. Electric Vehicles’, https://chineseclimatepolicy.energypolicy.columbia.edu/en/electric-vehicles, last accessed 4 April 2021.
- 26.
IEA (n 21).
- 27.
See Andrés López, Martín Obaya, Paulo Pascuini and Adrián Ramos, ‘Litio en Argentina. Oportunidades y desafíos para el desarrollo de la cadena de valor’ (2019) Secretaría de Ciencia, Tecnología e Innovación Productiva, https://www.argentina.gob.ar/sites/default/files/bid-litio-final.pdf, last accessed 3 April 2021.
- 28.
Ibid. The solar evaporation method is cheaper than mineral extraction from pegamatites. The estimated OPEX for mineral extraction are USD 4000 per ton while in evaporation, they range between USD 2500 and 3000 per ton.
- 29.
U.S. Geolocial Survey, ‘Mineral Commodity Summaries. Lithium’ (January 2021), https://pubs.usgs.gov/periodicals/mcs2021/mcs2021-lithium.pdf, last accessed 4 April 2021.
- 30.
Also, there are more than 40 projects in the early development phase. The operations in the Fénix and Olaroz mines have announced expansions to significantly improve capacity. Data in Ministerio de Desarrollo Productivo – Secretaría de Minería, ‘Informes Especiales’ (2020), https://www.argentina.gob.ar/informes-de-la-secretaria-de-mineria/informes-especiales, last accessed 3 April 2021.
- 31.
Section 75, subsection 12 and Section 124 of the Argentine National Constitution. However, Mining Procedural Codes are sanctioned and enforced by the provinces.
- 32.
Argentina’s automotive industry has a solid track record, including significant exports to South America countries, and reached a production of 314,787 units in 2019. A wide range of local and international automobile manufacturers produce and sell vehicles in Argentina. Although production halted with the lock down measures adopted due to the COVID-19 outbreak, the indicators are now showing signs of recovery and producers are further analysing the possibility of increasing exports.
- 33.
The Catamarca Province adhered by means of Provincial Law No. 4759, the Jujuy Province by means of Provincial Law No. 4695 and the Salta Province by means of Provincial Law No. 6712.
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Lanardonne, T., Mazzochi, J.C. (2022). Energy Transition in Argentina: Past, Present and Future. In: Wood, G., Neira-Castro, J.F. (eds) From Fossil Fuels to Low Carbon Energy Transition. Energy, Climate and the Environment. Palgrave Macmillan, Cham. https://doi.org/10.1007/978-3-031-00299-1_7
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