New Market Study Published: Argentina Power Report Q1 2013

New Energy research report from Business Monitor International is now available from Fast Market Research

by Bill Thompson

(WireNews+Co) - Boston, MA - 19 February 2013

BMI View: There has been some good news for utilities in Argentina this quarter, with the announcement that the government will permit an increase in electricity prices, in a move to encourage investment in electricity and natural gas infrastructure. However, this will not necessarily equate to an increase in profits, with the government having called for extra income to be channelled into a governmentadministered investment fund. The move illustrates the Argentinean government's obsession with controlling key markets and President Cristina Fernandez's nationalist stance in almost all areas of business. Projects announced include a tender for two hydroelectric power plants, announced in October 2012, progress towards the Garabi-Panambi hydroelectric power project and General Electric's plans to construct a 800-megawatt thermal power plant in Timbues. These are all good news for Argentina's electricity sector, which is hampered by blackouts, expensive imports and ageing infrastructure.

View Full Report Details and Table of Contents (http://www.fastmr.com/prod/536389_argentina_power_report_q1_2013.aspx?afid=201) (http://www.fastmr.com/prod/536389_argentina_power_report_q1_2013.aspx?afid=201)

Between 2012 and 2016, Argentina's overall power generation is expected to increase by an annual average of 2.5%, reaching 140.6 terawatt hours (TWh). Driving this growth is an annual 18.3% gain in nuclear-fired generation as new capacity comes online.

Following estimated real GDP growth of 3.0% in 2012, BMI forecasts average annual growth of 4.0% between 2012 and 2021. BMI calculates that net power consumption will increase from an estimated 119.2TWh to 128.4TWh by 2016. During 2012-2016, the average annual growth rate for electricity demand is forecast at 1.88%, but it will increase later in the decade to average 3.6% from 2016-2021. Energy demand continues to rise, but the sector suffers from a lack of investment. The government's decision to allow an increase in electricity tariffs offers some incentive to invest in infrastructure improvements, but as the government itself will control this additional revenue, it is unclear what role the private sector will actually play.

Argentina's power supply shortfall is likely to increase over the short term, but should fall appreciably later in the decade as new capacity comes online. The theoretical net import requirement by 2016 is forecast at 5.5TWh, but this should decrease by 2021 to 5.47TWh.

Key developments for Argentina's power sector this quarter include:

- The feasibility studies for the Garabi-Panambi hydroelectric project, which is jointly owned by Brazil and Argentina, will begin in early
- GE announced plans in November 2012 to construct a thermal power plant in Timbues. The 800MW power station will cost US$770mn, and is expected to be completed in two stages: the first phase will begin operations in June 2014, and the second phase, in 2015.

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