Agency points to strong policy frameworks to boost investment
IRENA’s Director General Adnan Z. Amin met with the President of Argentina, Mr. Mauricio Macri during a recent visit to Argentina. Mr. Amin was in Buenos Aires to participate in the Latin American Energy Organization (OLADE) Meeting of Ministers. The meeting offered Mr. Amin an opportunity on behalf of IRENA to congratulate Argentina for its successful ‘Year of Renewable Energy’ in 2017.
The year-long initiative launched by President Macri in January 2017 was put in place to catalyse the nation’s renewable energy development and set the country on a path to easing its dependence on imported fossil fuels, and to reducing its carbon emissions in line with Paris Agreement commitments.
“What Argentina has accomplished in the energy sector in the past two years is remarkable, and reflects strong leadership and staunch determination that is inspiring for us all,” Mr. Amin said during a keynote speech to open high level discussions on Argentina’s Renewable Energy Market, hosted by IRENA.
“Through a robust set of enabling policy frameworks, renewables are finding the limelight here [in Argentina] at an impressive speed, and a positive story is emerging to demonstrate the immense possibilities and socio-economic benefits of a sustainable and prosperous energy future.”
Renewable energy adoption in Argentina has seen positive progress since the establishment and introduction of Plan RenovAR by President Macri 2016. The plan sought to secure better financial conditions for the winners of renewable energy auctions.
Under the programme, the Argentinian government set a target to increase the share of renewable energy to 20 per cent in the energy mix by 2025, and an 8 per cent renewable energy share in electricity consumption by 2017 – attracting approximately US 35 billion in renewable energy investment in the process.
The early signs have been encouraging. Round one of the initiative was six times oversubscribed and more than 2.4 gigawatts (GW) of renewable energy tenders were awarded in 2016, stimulating investment of around US 4 billion. A further 1.2 GW of renewable energy was auctioned in the latest round of RenovAr in November 2017.
This momentum is having a positive effect on prices too. Bids for wind and solar in round two of its RenovAr, averaged US 4.7 and 4.8 cents per kilowatt-hour respectively, a fall of 12 per cent and 13 per cent on round 1.5. This downward trend can be witnessed across Latin America – in Mexico, recent renewable energy auctions resulted in solar bids below US 2 cents per kilowatt-hour.
During OLADE’s XLVII Meeting of Ministers, IRENA also co-organized an event seeking to identify the lessons learned from the early rounds of RenovAr, and identify a pathway to long-term success for the programme ensuring it continues to stimulate widespread investor interest.
Commenting on Argentina’s positive trajectory and the importance of strong risk mitigation instruments, and predictable policies, Mr. Sebastian Kind, Undersecretary of Renewable Energy at the Ministry of Mines and Energy, said: “Universal access to renewable energy requires long-term project design which shall not be influenced by country risk.”