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Argentina’s power generation bill will likely grow again this year, based on fuel price forecasts.
Last year, generation outlay totaled US$9.87bn which, in turn, was up from US$7.76bn in 2020.
Higher international fuel prices, unfavorable forex fluctuations and increased thermoelectric generation stemming from reduced hydropower output were the chief drivers behind the 2021 uptick, the federal energy department said.
Natural gas consumption grew 0.8% last year, as diesel usage grew 138%, coal 82.3% and fuel oil 29.4%.
The country faces a similar scenario this year, with fresh increases expected in prices.
“During 2022, demand is expected to continue growing, which presents a power generation challenge in the current context,” the department’s electric power chief Federico Basualdo said in a presentation during a public audience on power sector rates.
“A significant reversion in the water situation isn’t expected, for which reason thermal generation will continue to play a notable role. Elsewhere, the international context indicates that the price of the fuels on the global market will continue rising.”
Purchasing fuel on the international markets pressures Argentina’s scant foreign reserves as higher generation costs increase the governments subsidy burden.
The country’s renewables chamber Cader has underscored the role of such technology in reducing reliance on gas and liquid fuels for power generation.
PRICE INCREASE ESTIMATES FOR 2022
Domestically produced natural gas will register the smallest increase this year, of 1% to US$3.4/MMBTU (million British thermal units), according to estimates from wholesale power market administrator Cammesa.
Gas from Bolivia – supply of which is shrinking – will climb 47% to US$8.1/MMBTU.
LNG, including regasification, will rise 181% to US$27.8/MMBTU. The cash-strapped country purchased 56 shipments of LNG last year at an average price of US$8.33/MMBTU, for around US$1bn, which was a hike from the average price of US$2.96/MMBTU in 2020 and US$5.92/MMBTU in 2019, according to data from state energy company IEASA.
Coal will climb 32% to US$200/t.
Fuel oil will rise 31% to US$650/t.
Diesel will increase 27% to US$650/m3.
For 2020, Cammesa reported increases in the price of the fuels of 45%, 21%, 112%, 17%, 46% and 45%, respectively. |
