Schedule Delays and New Financing for the Argentine Electricity Sector Growth
Apparently the electricity sector of Argentina has suffered in the past from excessive capacity planning, owing to overoptimistic forecasts of the demand growth rate. But because of the long delays involved and lack of financial backing this advantage has been progresively lost. The present official planning only provides for renovation and demographic growth, not allowing for economic growth. Therefore, the actual supply-demand balance of electricity can easily be worn away by technical obsolescence and aging process of the actual installed capacity of electricity production.
The problem behaviour arises when the timing of new capacity investment is delayed, falling behind the programmed schedule of new plants, without being able to meet the electricity demand . This could happen mainly due to political prices well below costs because of the inflation and or social subsidization, which leads, in turn, to the discapitalization of the sector, that still remains nationalized. A system dynamics model is used to explore the trade-off between construction delays (which entails costs of unsatisfied demand) and construction speed up (which entails financial costs).
KeywordsMilling Expense Argentina Aires CEMA
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