Argentina could avoid $3 billion in investments in new thermal capacity if it accelerates the development of distributed generation, savings that could be translated into investments for renewables.
That is one of the main conclusions of the report “ Scaling up distributed generation through renewable energy sources in Latin America” , presented by the Argentine Chamber of Renewable Energies (CADER) and prepared by Grupo Mercados Energéticos (GME).
The data becomes more relevant when contrasted with the current situation: the country has only accumulated 149.3 MW installed and distributed among 4423 user-generators, almost ten years after the publication of Law No. 27,424.
“Furthermore, there would be fuel savings of 3.5 million m3 per day and a reduction in CO2 emissions estimated at 2.5 million tons. This emissions saving benefit, depending on the scenario, translates into a potential premium for the price of renewable energy,” stated Julia Irene Carruthers , Energy Market Intelligence at Grupo Mercados Energéticos (GME).
The report presents three scenarios for the evolution of distributed generation towards 2030, ranging from 760 MW to 5000 MW of operational capacity.
The first scenario has a projection of 760 MW, under the continuation of the current trend of moderate year-on-year increase, so it does not represent major changes and maintains the current regulations and tariff adjustments as they have been occurring.
Scenario No. 2 is more “aggressive”, so that GD could reach around 3.4 GW by the end of the decade, with strong expansion driven by macroeconomic stability, falling costs, financing and community projects.
While the third scenario points to 5 GW by 2030, with maximum penetration, but "requires profound regulatory changes" such as the shift to net-metering methodology instead of net-billing.
The discussion is not insignificant. The current system limits the growth rate of a segment that in other markets is advancing with more aggressive incentives and greater financial predictability.
In addition to savings in conventional infrastructure, the report identifies direct added economic value. The benefit associated with avoided emissions could represent between USD 7 and USD 13 per MWh , while savings in fossil fuels would contribute between USD 2.56 and USD 3.37 per MWh .
Added to this is the impact on local employment, so that according to the study, this economic component adds between USD 30.33 and USD 30.87 per MWh .
The signal is clear: distributed generation appears not only as a decarbonization tool, but as an economically competitive alternative to reduce systemic costs.
Another relevant technical piece of data is its operational contribution. According to the report, 31 of the 35 peak demand hours recorded in the Wholesale Electricity Market coincided with periods of solar irradiation.
“Distributed generation not only offers environmental benefits such as fuel savings, but also has the advantage of helping with system security and not compromising our own resources,” Carruthers points out.
CADER toughens its message towards the Government
During the presentation of the study, CADER took a more political and direct approach: “There is no reason why the authorities should not be more ambitious in accelerating the development of distributed generation,” said Marcelo Álvarez , president of the organization.
The executive questioned why the Government is evaluating remuneration mechanisms to reduce demand while not accelerating an alternative that, according to the sector, structurally reduces the cost of the system.
Therefore, CADER's message aims to change the focus of the energy debate so that it is not only an environmental issue, but also a business issue based on economic improvement for the country.
Along the same lines, Martín Dapelo , a member of the Board of Directors and coordinator of the Financing Committee of CADER, insisted that the discourse towards political power must change.
“We are in a global context where renewables are the best business for generating energy. When we have to talk at the level of national authorities, let's not talk about environmentalism or emissions reduction, but let's talk about the numbers,” he concluded.