The electricity sector in Argentina constitutes the third largest power market in Latin America. It relies mostly on thermal generation (54% of installed capacity) and hydropower generation (41%). The country still has a large untapped hydroelectric potential. The prevailing natural gas-fired thermal generation is at risk due to the uncertainty about future gas supply. Faced with rising electricity demand (over 6% annually) and declining reserve margins, the government of Argentina is in the process of commissioning large projects, both in the generation and transmission sectors. To keep up with rising demand, it is estimated that about 1,000 MW of new generation capacity are needed each year. An important number of these projects are being financed by the government through trust funds, while independent private initiative is still limited as it has not fully recovered yet from the effects of the Argentine economic crisis. The electricity sector was unbundled in generation, transmission and distribution by the reforms carried out in the early 1990s. Generation occurs in a competitive and mostly liberalized market in which 75% of the generation capacity is owned by private utilities. In contrast, the transmission and distribution sectors are highly regulated and much less competitive than generation. Private and state-owned companies carry out generation in a competitive, mostly liberalized electricity market, with 75% of total installed capacity in private hands. The share in public hands corresponds to nuclear generation and to the two bi-national hydropower plants: Yacyretá (Argentina-Paraguay) and Salto Grande (Argentina-Uruguay). The generation sector is highly fragmented with more than ten large companies, all of them providing less than 15% of the system's total capacity. Power generators sell their electricity in the wholesale market operated by the CAMMESA. CAMMESA S.A., a wholesale electricity market administrator offers operation and dispatch of generation; price calculation in the spot market; and the administration of the commercial transactions in the electricity market. The company also purchases and sells electric power from abroad and to other countries. CAMMESA S.A. offers consulting services. The company was founded in 1992 and is based in Buenos Aires, Argentina. n 2005, Argentina imported 6.38 TW·h of electricity while it exported 3.49 TW·h. Net energy imports thus were about 3% of consumption. Argentina also imports electricity from Paraguay, produced by the jointly built Yaciretá Dam. On 18 September 2006 Paraguay agreed to settling its debt of $11,000,000,000 owed to Argentina for the construction of Yaciretá by paying in electricity, at the rate of 8,000 GWh per year for 40 years. Total electricity coverage in Argentina was as high as 95% in 2003. However, about 30% of the rural population lacks access to electricity.

1. POWER SECTOR IN
ARGENTINA

2. INTRODUCTION
The electricity sector in Argentina constitutes the third largest
power market in Latin America. It relies mostly on thermal
generation (54% of installed capacity) and hydropower
generation (41%). The country still has a large untapped
hydroelectric potential. The prevailing natural gas-fired thermal
generation is at risk due to the uncertainty about future gas
supply.
Faced with rising electricity demand (over 6% annually) and
declining reserve margins, the government of Argentina is in
the process of commissioning large projects, both in the
generation and transmission sectors. To keep up with rising
demand, it is estimated that about 1,000 MW of new
generation capacity are needed each year. An important
number of these projects are being financed by the
government through trust funds, while independent private
initiative is still limited as it has not fully recovered yet from the
effects of the Argentine economic crisis.

3. INTRODUCTION (CONTD.)
The electricity sector was unbundled in generation,
transmission and distribution by the reforms carried out in the
early 1990s. Generation occurs in a competitive and mostly
liberalized market in which 75% of the generation capacity is
owned by private utilities. In contrast, the transmission and
distribution sectors are highly regulated and much less
competitive than generation.

4. ELECTRICITY
GENERATION
Private and state-owned companies carry out
generation in a competitive, mostly liberalized
electricity market, with 75% of total installed capacity
in private hands. The share in public hands
corresponds to nuclear generation and to the two bi-
national hydropower plants: Yacyretá (Argentina-
Paraguay) and Salto Grande (Argentina-Uruguay).
The generation sector is highly fragmented with
more than ten large companies, all of them providing
less than 15% of the system's total capacity. Power
generators sell their electricity in the wholesale
market operated by the CAMMESA.

5. TRANSMISSION &
DISTRIBUTION
The transmission and distribution sectors are highly
regulated and less competitive than generation. In
transmission, the Compañía Nacional de Transporte
Energético en Alta Tension (Transener) operates
the national electricity transmission grid under a
long-term agreement with the Argentine
government. In the distribution sector, three private
companies, Edenor (Em pre sa Distribuido ra y
Co m e rcializ ado ra No rte ), Edesur (Ele ctricidad
Distribuido ra Sur) and Edelap (Em pre sa de
Ele ctricidad de la Plata ), dominate a market with
75% control by private firms.

6. Other important distribution companies at the
provincial level are:
Public provincial: EPEC (Em pre sa Pro vincial de
Ene rg ía de Có rdo ba ), EPESFI (Em pre sa Pro vincial
de Ene rg ía de Santa Fé )
Private provincial: ESJ ( Ene rg ía San Juan), EDET
(Em pre sa de Distribució n Elé ctrica de Tucum án):
EDEN (Em pre sa Distribuido ra de Ene rg ía No rte ),
EDEA (Em pre sa Distribuido ra de Ene rg ía Atlántica ),
EDES (Em pre sa Distribuido ra de Ene rg ía Sur)

7. PRIVATE PARTNERSHIP
IN ELECTRICITY SECTOR
Prior to 1991, the electricity sector in Argentina was
vertically integrated. The new legal framework for
the electricity sector included: vertical and horizontal
unbundling of generation, transmission and
distribution; opening up of all segments to the
private sector; and separation of the regulatory
function from policy setting.
Current scenario of private sector participation is,Activity Private participation (%)
Generation 75% of installed capacity
Transmission 100%
Distribution 75% of clients

8. RENEWABLE ENERGY
RESOURCE
1. Hydro Power
2. Wind
3. Solar

9. HYDRO POWER
Argentina's hydroelectric potential is being exploited
only partially. While the identified potential is
170,000 GW·h/year, in 2006 hydroelectric
production amounted just to 42,360 GW·h.There are
also untapped mini-hydropower resources, whose
potential is estimated at 1.81% of overall electricity
production (in contrast with its current 0.88%).

10. WIND
Wind power has increased significantly in Argentina during the
last decade. Total operating wind power capacity in 2005 was
26.6 MW, shared by 13 plants. This is still only about 0.05% of
the theoretical potential of wind energy in Argentina. The
distribution of number plants and total capacity is:
Of the 13 plants, only three have been commissioned after the
year 2000, with the remaining 10 built during the 1990s.
Buenos Aires Province 6 plants, 6,100 kW
Chubut Province 4 plants, 17,460 kW
Santa Cruz Province 1 plant, 2,400 kW
La Pampa Province 1 plant, 1,800 kW
Neuquen Province 1 plant, 400 kW

11. WIND
The Argentine Patagonia region has a very large wind potential.
The Chubut Wind Power Regional Center (CREE) estimated the
theoretical potential for the region at 500 GW of electricity
generation. However, this large potential is still largely unexploited.
Reasons
1.One of the reasons for this underdevelopment is that existing
tariffs and incentives do not make wind power development
attractive enough yet.
2.the main deterrent to wind power development in the region has
been the lack of transmission lines that connect the Patagonia
region with the National Interconnected System.

12. SOLAR
Solar power is only present in remote areas. Just 81
MW·h were generated in 2005, less than 0.1% of
total electricity production.In 2012 the first of four 5
MW stages of Cañada Honda was completed, as
part of a plan to install 117 MW of renewable
energy.

13. POLICY & REGULATIONS
The Energy Secretariat (SENER) is responsible for policy
setting, while the National Electricity Regulator (ENRE) is the
independent entity within the Energy Secretariat responsible
for applying the regulatory framework established by Law
26,046 of 1991. ENRE is in charge of regulation and overall
supervision of the sector under federal control. Provincial
regulators regulate the rest of the utilities. ENRE and the
provincial regulators set tariffs and supervise compliance of
regulated transmission and distribution entities with safety,
quality, technical and environmental standards. CAMMESA
(Co m pañía Adm inistrado ra de lMe rcado Mayo rista Elé ctrico ) is
the administrator of the wholesale electricity market. Its main
functions include the operation and dispatch of generation and
price calculation in the spot market, the real-time operation of
the electricity system and the administration of the commercial
transactions in the electricity market.

14. POLICY & REGULATIONS
(CONTD.)
The Electric Power Federal Council (CFEE), created in 1960, plays a
very important role in the sector as well. It is the administrator of
funds that specifically target electricity operations (i.e. National Fund
for Electric Power, see Recent developments below) and is also an
adviser to the National and the Provincial Governments in issues
relating to the power industry, public and private energy services,
priorities in the execution of new projects and studies, concessions
and authorizations, and electricity tariffs and prices. It is also an
adviser for legislative modifications in the power industry.
The Argentine power sector is one of the most competitive and
deregulated in South America. However, the fact that the Energy
Secretariat has veto power over CAMMESA has the potential to alter
the functioning of the competitive market. The functions of
generation, transmission, and distribution are open to the private
sector, but there are restrictions on cross-ownership between these
three functions. Argentine law guarantees access to the grid in order
to create a competitive environment and to allow generators to serve

15. ELECTRICITY
MARKET

16. DEMAND
Electricity demand in Argentina has steadily grown
since 1991, with just a temporary decline caused by
the economic crisis of 2001-2002 that has been
followed by a quick recovery (6%-8% annual
increase) in the last five years, partially due to
economic recovery. In 2005, the country consumed
94.3 TW·h of electricity, which corresponds to
2,368 kWh per capita. Residential consumption
accounted for 29% of the total, while industrial, and
commercial and public represented 43% and 26%
respectively.

17. SUPPLY: GENERATION
CAPACITY
Thermal plants fueled by natural gas (CCGT) are the leading
source of electricity generation in Argentina. Argentina generates
electricity using thermal power plants based on fossil fuels (54%),
hydroelectric plants (41%), and nuclear plants (4%, two
operational, one incomplete). Installed nominal capacity in 2006
was 24,046 MW. However, this scenario of gas dominance is
likely to undergo changes due to gas exhaustion derived from the
existing "bottlenecks" in exploration and production (E+P) and
pipeline capacity. Today, gas reserves are 43% lower than in
2000.This situation is further aggravated by the uncertainty
surrounding the gas deals with Bolivia and the plans to build new
regional pipeline connections. Total generation in 2005 was 96.65
TW·h. The breakdown by source in 2003 had been: 59% from
conventional thermal sources, 35.4% from hydroelectricity, 7%
from nuclear power and 1% from geothermal sources. In 2015, the
Atucha II Nuclear Power Plant reached 100% power, increasing
the percentage of nuclear power in Argentina from 7% to 10%.

18. The generators are divided into eight regions:
Cuyo (CUY)
Comahue (COM)
Northwest (NOA)
Center (CEN)
Buenos Aires/Gran Buenos Aires (GBA-BAS)
Littoral (LIT)
Northeast (NEA)
Patagonia (PAT)

20. DEMAND & SUPPLY
PROJECTIONS
Argentina currently faces a tight supply/demand
scenario as reserve margins have declined from
above 30% in 2001 to less than 10%. This fact,
together with the deterioration in distribution
companies services (i.e. cables, transformers, etc.),
has the potential to endanger supply. To sustain a 6-
8% annual increase in demand, it is estimated that
the system should incorporate about 1,000 MW of
generation capacity each year.

21. TARIFFS
Electricity tariffs in Argentina are well below the LAC
average. In 2004, the average residential tariff was
US$0.0380 per kWh, very similar to the average
industrial tariff, which was US$0.0386 per kWh in
2003. Weighted averages for LAC were US$0.115
per kWh for residential consumers and US$0.107
per kWh for industrial customers.

22. SUBSIDIES,
INVESTMENTS &
FINANCING
1. 47.4%: Subsidiary Fund for Regional Tariff Compensation
to Final Users (FCT), for homogenization of tariffs across
the country (this created a de facto subsidy for those
consumers in the areas with higher electricity costs).
2. 31.6%: Fund for the Electric Development of the Interior
(FEDEI), for generation, transmission and rural and urban
distribution works. Most funds have been directed to rural
electrification
3. 19.75%: Fiduciary Fund for Federal Electricity
Transmission(FFTEF) (created in 2000), for co-financing or
projects in electricity transmission.
4. 1.26%: Wind Energy Fund (created in 2002), for the
development of wind energy.

23. CAMMESA
CAMMESA S.A., a wholesale electricity market
administrator offers operation and dispatch of
generation; price calculation in the spot market; and
the administration of the commercial transactions in
the electricity market. The company also purchases
and sells electric power from abroad and to other
countries. CAMMESA S.A. offers consulting
services. The company was founded in 1992 and is
based in Buenos Aires, Argentina.

24. IMPORTS & EXPORTS
1. In 2005, Argentina imported 6.38 TW·h of
electricity while it exported 3.49 TW·h. Net energy
imports thus were about 3% of consumption.
2. Argentina also imports electricity from Paraguay,
produced by the jointly built Yaciretá Dam. On 18
September 2006 Paraguay agreed to settling its
debt of $11,000,000,000 owed to Argentina for
the construction of Yaciretá by paying in
electricity, at the rate of 8,000 GWh per year for
40 years.

25. ACCESS TO ELECTRICITY
Total electricity coverage in Argentina was as high
as 95% in 2003. However, about 30% of the rural
population lacks access to electricity. The
Renewable Energy in the Rural Market Project
(PERMER) is one of several programs being
implemented to enlarge electricity coverage in rural
areas.

26. SERVICE QUALITY
Interruption frequency and duration
Interruption frequency and duration are considerably
below the averages for the LAC region. In 2002, the
average number of interruptions per subscriber was
5.15, while duration of interruptions per subscriber was
5.25 hours. The weighted averages for LAC were 13
interruptions and 14 hours respectively.
Distribution and transmission losses
Distribution losses in 2005 were 13.6%, down from 17%
a decade before.

27. PROJECTS &
ASSISTANCE

28. RECENT GOVERNMENT
PROJECTS
There are several projects that are part of the government's
response to the predicted electricity shortages in different
sectors:-
1.THERMAL POWER
2.NUCLEAR POWER
3.HYDRO POWER
4.TRANSMISSION

29. THERMAL POWER
PROJECTS1. Two new Combined Cycle Gas Turbine plants, the José de San
Martín Thermoelectric and Manuel Belgrano Thermoelectric, of 830
MW each, are under construction and expected to start full
operations at the beginning of 2009.Both plants, which have been
financed through the FONINVEMEM (total investment amounts up to
US$1,097 million), are expected to start full operations at the
beginning of 2009.
2. the Planning Ministry announced in July 2007 the commissioning of
five new thermal plants with a total capacity of 1.6 GW and an
overall investment of US$3,250 million. These dual-generation
turbine (gas or fuel oil) plants, which are expected to start operations
in 2008, will be located in Ensenada (540 MW), Necochea (270
MW), Campana (540 MW), Santa Fe (125 MW) and Córdoba (125
MW)
3. Enarsa has recently launched bidding for eleven small and
transportable generation units (15-30 MW each) and for other three
larger generation units (50-100 MW) to be installed on barges.
These new units, whose base price is still unknown, will add

30. NUCLEAR PROJECTS
1. In 2006, the Argentine government launched a
plan to boost nuclear energy. The Atucha II
nuclear power plant, whose construction started
in 1981, will be completed and will add 750 MW
of generation capacity by 2010.
2. In addition, the Embalse nuclear power plant, with
648 MW of generation capacity, will be
refurbished to extend its operational life beyond
2011.

31. HYDROPOWER
PROJECTS
1. On the hydropower side, the Yacyretá dam's
reservoir was elevated by 7 m to the height of 83
m as contemplated in its original design, which
increased its capacity from 1,700 to 3,100 MW.
This will lead to a 60% increase in its electricity
output (from 11,450 GW·h to 18,500 GW·h).The
reservoir rise was complete in February 2011
despite a serious controversy regarding the
resettlement of people.
2. in 2006, bidding for the expansion of Yacyretá
with the construction of a new 3-turbine plant in
the Añá Cuá arm of the Paraná River was
announced by the Government. This expansion,
to be finalized in 2010, would add 300 MW of new

32. TRANSMISSION
PROJECTS
1. In regard to transmission, the Federal Plan for
Transport of Electric Energy at 500 kV is under
implementation under the umbrella of the FFTEF
(Fondo Fiduciario para el Transporte Eléctrico
Federal).The main lines of the plan (Línea
Patagónica, Línea Minera, Yacyretá, Puerto Madryn
– Pico Truncado, NEA-NOA, Comahue – Cuyo, Pico
Truncado – Río Turbio – Río Gallegos) are already
built or currently under construction. The lines built
between 2007 and 2009 will add 4,813 new
kilometers of high voltage transmission capacity.

33. EXTERNAL ASSISTANCE
1. WORLD BANK
2. INTER-AMERICAN DEVELOPMENT BANK
3. ANDEAN DEVELOPMENT CORPORATION

34. WORLD BANK
The only active energy project financed by the World
Bank in Argentina is the Renewable Energy in the
Rural Market Project (PERMER). This project has
the objective of guaranteeing access to electricity to
1.8 million people (314,000 households) and to
6,000 public services (schools, hospitals, etc.)
located far from electricity distribution centers.
Electrification of this dispersed market will be mostly
carried out through the installation of solar
photovoltaic systems, but also through other
technologies such as micro-hydraulic turbines, wind
and, eventually, diesel generators. The project,
which started in 1999 and is expected to end in
December 2008, has received a US$10 million grant
from GEF and a US$30 million loan from the World

35. INTER-AMERICAN DEVELOPMENT
BANK
In November 2006, the Inter-American Development
Bank approved a $580 million loan for the
construction of a new 760-mile transmission line in
northern Argentina that will connect separate grids
in the northeastern and northwestern parts of the
country, the Norte Grande Electricity Transmission
Program.

36. ANDEAN DEVELOPMENT
CORPORATION (CAF)
In 2006, Argentina received financing from CAF (Andean
Development Corporation) for two electricity projects: the
Electricity Interconection Comahue-Cuyo (US$200 million) and
the Electricity Interconnection Rincón Santa María-Rodríguez
(US$300 million), two of the high voltage transmission lines
included in the Federal Transportation Plan. In the same year,
Argentina also borrowed US$210 million from CAF for a
program that aims at repairing the country's hydroelectric
infrastructure.
In June 2007, CAF approved a US$45 million loan to the
Buenos Aires province for partial financing of the electricity
transport capacity in the North of the province.

37. BIBLIOGRAPHY
1. Cámara Argentina de la Construcción, 2006. La
co nstrucció n co m o he rram ie nta de lcre cim ie nto co ntinuado .
Se cto r e lé ctrico . Evaluació n de las inve rsio ne s ne ce sarias
para e lse cto r e lé ctrico nacio nale n e lm e diano plazo .
Consultor: Dr. Ing. Alberto del Rosso.
2. Coordinación de Energías Renovables, 2006.Po te ncialde
lo s apro ve cham ie nto s e ne rg é tico s e n la Re pública
Arg e ntina
3. Oxford Analytica, 2006. Arg e ntina: Ene rg y issue s thre ate n
sustaine d g ro wth
4. Secretaria de Energía, 2006. Info rm e de lSe cto r Elé ctrico
20 0 5.
5. Secretaría de Energía, 2007. Balance Ene rg é tico Nacio nal.
Avance 20 0 6 .