China emerged as the big winner in Argentina’s auctions this year. Also of note is the near total absence of U.S. companies.
According to GLOBAL TRENDS IN RENEWABLE ENERGY INVESTMENT 2016 China was by far the largest investing country for renewables; excluding large hydro, China invested $102.9 billion in 2015, up 17% from the previous year, representing well over a third of the global total. The US was a distant second, with $44.1 billion, up 19%.
While the numbers are much smaller in Argentina, it is undeniable that China has established a dominant presence in the budding renewable energy market. Chinese companies participated directly in the two auctions of 2016, winning awards for 400 MW of capacity (285 wind and 115 solar) out of a total of nearly 2,400 MW. The Chinese firms Envision Energy and Sinohydro bid the lowest prices of the two auctions, mainly in the $49/MWh range, and as low as $46.
Chinese equipment manufacturers, however, are also making important inroads into the Argentine market offering cheap financing in exchange for equipment sales. If we count the 300 MW of solar power awarded to JEMSE and the 200 MW of wind power awarded to Arauco S.A.P.E.M, both provincial state-owned companies that are using Chinese financing and equipment, the Chinese share of the total capacity awarded in the two rounds of RenovAr climbs to one third. By some counts, the Chinese have a stake in close to 50% of the projects.
Spanish firms came in a distant second, having won 16% of the awarded capacity, followed by a sprinkling of regional companies, such as Latinoamericana de Energia. Argentine companies won another 17% of awarded capacity, though projects with strictly local production amount to only 6%, according to OETEC. Canadian companies are said to be working with EMESA, the provincial state-owned company of Mendoza.
American companies are conspicuously absent.
The (non-conventional) renewable energy market in Argentina and Latin America, however, is just taking off and new opportunities are on the horizon. More about this in the next post.0