The electricity sector in Argentina constitutes the third largest power market in Latin America. It relies mostly on thermal generation (60% of installed capacity) and hydropower generation (36%). The prevailing natural gas-fired thermal generation is at risk due to the uncertainty about future gas supply.
Faced with rising electricity demand (over 6% annually) and declining reserve margins, the government of Argentina is in the process of commissioning large projects, both in the generation and transmission sectors. To keep up with rising demand, it is estimated that about 1,000 MW of new generation capacity are needed each year. An important number of these projects are being financed by the government through trust funds, while independent private initiative is still limited as it has not fully recovered yet from the effects of the 2002 Argentine economic crisis.
The electricity sector was unbundled in generation, transmission and distribution by the reforms carried out in the early 1990s. Generation occurs in a competitive and mostly liberalized market in which 75% of the generation capacity is owned by private utilities. In contrast, the transmission and distribution sectors are highly regulated and much less competitive than generation.
Electricity supply and demand
Generation
Thermal plants fueled by natural gas (CCGT) are the leading source of electricity generation in Argentina. Argentina generates electricity using thermal power plants based on fossil fuels (60%), hydroelectric plants (36%), and nuclear plants (3%), while wind and solar power accounted for less than 1%. Installed nominal capacity in 2019 was 38,922 MW. However, this scenario of gas dominance is likely to undergo changes due to gas exhaustion derived from the existing "bottlenecks" in exploration and production (E+P) and pipeline capacity. Gas output dropped for the first time in 2005 (-1.4%) and gas reserves dropped to ten years of consumption by the end of 2004 (down from an average of 30 years in the 1980s).Oxford Analytica 2006 Today, gas reserves are 43% lower than in 2000. This situation is further aggravated by the uncertainty surrounding the gas deals with Bolivia and the plans to build new regional pipeline connections. Total generation in 2005 was 96.65 TW·h. In 2015, the Atucha II Nuclear Power Plant reached 100% power, increasing the percentage of nuclear power in Argentina from 7% to 10%.
The generators are divided into eight regions: Cuyo (CUY), Comahue (COM), Northwest (NOA), Center (CEN), Buenos Aires/Gran Buenos Aires (GBA-BAS), Littoral (LIT), Northeast (NEA) and Patagonia (PAT).
Installed capacity in the wholesale market as of December 2020:
TechnologyInstalledcapacity (MW)%ThermalCombined Cycle13,12031.3Gas Turbine6,29815.0Steam Turbine4,25410.1Diesel engine1,6934.0Total Thermal25,36560.5Pumped Storage9742.3Nuclear1,7554.2RenewableHydropower10,37024.5Onshore wind2,6236.3Solar photovoltaic7591.8Landfill gas21.90.1Biogases from anaerobic fermentation28.50.1Total Renewable13,802.433.0Total41,951100 The above table does not consider off-grid installed capacity nor distributed generation (small biogas/biomass facilities, rooftop solar panels, etc.)
While CAMESSA categorises hydropower larger than 50MW as non-renewable, the renewable classification of large hydropower is in line with international standards and how other countries classify their hydropower as renewable energy. Pumped storage is considered as non-renewable due to its consumption of electricity from the grid.
Imports and exports In 2005, Argentina imported 6.38 TW·h of electricity while it exported 3.49 TW·h.Secretaría de Energía 2006 Net energy imports thus were about 3% of consumption.
Argentina also imports electricity from Paraguay, produced by the jointly built Yaciretá Dam. On 18 September 2006 Paraguay agreed to settling its part of the overall debt of $11,000,000,000 owed to Argentina for the construction of Yaciretá by paying in electricity, at the rate of 8,000 GWh per year for 40 years.
Demand Electricity demand in Argentina has steadily grown since 1991, with just a temporary decline caused by the economic crisis of 2001-2002 that has been followed by a quick recovery (6%-8% annual increase) in the last five years,Cámara Argentina de la Construcción 2006 partially due to economic recovery. In 2005, the country consumed 94.3 TW·h of electricity, which corresponds to 2,368 kWh per capita. Residential consumption accounted for 29% of the total, while industrial, and commercial and public represented 43% and 26% respectively.
Demand and supply projections Argentina currently faces a tight supply/demand scenario as reserve margins have declined from above 30% in 2001 to less than 10%. This fact, together with the deterioration in distribution companies services (i.e. cables, transformers, etc.), has the potential to endanger supply. To sustain a 6-8% annual increase in demand, it is estimated that the system should incorporate about 1,000 MW of generation capacity each year. In 2016, to meet the increasing domestic electricity demand, Argentina imported 9.5 BkWh through electrical transmission interconnections with Brazil, Chile, Paraguay, and Uruguay.
Transmission and distribution
In Argentina, there are two main wide area synchronous grids systems, SADI (Sistema Argentino de Interconexión, Argentine Interconnected System) in the North and center-South of the country, and SIP (Sistema de Interconexión Patagónico, Patagonian Interconnected System) in the South. Both systems are integrated since March 2006.Coordinación de Energías Renovables 2006 The electricity market in the SADI area is managed by the MEM (Mercado Eléctrico Mayorista).
Access to electricity Total electricity coverage in Argentina was close to 100% of the population in 2016. However, access to electricity is more deficient in certain rural areas. The Renewable Energy in the Rural Market Project (PERMER) in 2012 was one of several programs being implemented to enlarge electricity coverage in rural areas. (See World Bank projects below).
Service quality
Interruption frequency and duration Interruption frequency and duration are considerably below the averages for the LAC region. In 2002 and 2019,The World Bank, Data Bank "Doing Business", SAIDI index WB 2019, https://databank.worldbank.org/SAIDI-Index-WB/id/dd1d6036 the average number of interruptions per subscriber was 5.15, while duration of interruptions per subscriber was around 5 hours. The weighted averages for LAC were 13 interruptions and 14 hours respectively.
Distribution and transmission losses Distribution losses in 2005 were 13.6%, down from 17% a decade before. In 2014, losses were about 3.3%.
Responsibilities in the Electricity Sector
Policy and regulation The Energy Secretariat (SENER) is responsible for policy setting, while the National Electricity Regulator (ENRE) is the independent entity within the Energy Secretariat responsible for applying the regulatory framework established by Law 26,046 of 1991. ENRE is in charge of regulation and overall supervision of the sector under federal control. Provincial regulators regulate the rest of the utilities. ENRE and the provincial regulators set tariffs and supervise compliance of regulated transmission and distribution entities with safety, quality, technical and environmental standards. CAMMESA (Compañía Administradora del Mercado Mayorista Eléctrico) is the administrator of the wholesale electricity market. Its main functions include the operation and dispatch of generation and price calculation in the spot market, the real-time operation of the electricity system and the administration of the commercial transactions in the electricity market.
The Electric Power Federal Council (CFEE), created in 1960, plays a very important role in the sector as well. It is the administrator of funds that specifically target electricity operations (i.e. National Fund for Electric Power, see Recent developments below) and is also an adviser to the National and the Provincial Governments in issues relating to the power industry, public and private energy services, priorities in the execution of new projects and studies, concessions and authorizations, and electricity tariffs and prices. It is also an adviser for legislative modifications in the power industry.
The Argentine power sector is one of the most competitive and deregulated in South America. However, the fact that the Energy Secretariat has veto power over CAMMESA has the potential to alter the functioning of the competitive market. The functions of generation, transmission, and distribution are open to the private sector, but there are restrictions on cross-ownership between these three functions. Argentine law guarantees access to the grid in order to create a competitive environment and to allow generators to serve customers anywhere in the country.
As lower hydropower increased power price in 2026, government subsidies increased to half the residential rate.
Generation Private and state-owned companies carry out generation in a competitive, mostly liberalized electricity market, with 75% of total installed capacity in private hands. The share in public hands corresponds to nuclear generation and to the two bi-national hydropower plants: Yacyretá (Argentina-Paraguay) and Salto Grande (Argentina-Uruguay). The generation sector is highly fragmented with more than ten large companies, all of them providing less than 15% of the system's total capacity. Power generators sell their electricity in the wholesale market operated by the CAMMESA.
Transmission and distribution The transmission and distribution sectors are highly regulated and less competitive than generation. In transmission, the Compañía Nacional de Transporte Energético en Alta Tension (Transener) operates the national electricity transmission grid under a long-term agreement with the Argentine government. In the distribution sector, three private companies, Edenor (Empresa Distribuidora y Comercializadora Norte), Edesur (Electricidad Distribuidora Sur) and Edelap (Empresa de Electricidad de la Plata), dominate a market with 75% control by private firms.
Other important distribution companies at the provincial level are:
Public provincial: EPEC (Empresa Provincial de Energía de Córdoba), EPESFI (Empresa Provincial de Energía de Santa Fé) Private provincial: ESJ ( Energía San Juan), EDET (Empresa de Distribución Eléctrica de Tucumán): EDEN (Empresa Distribuidora de Energía Norte), EDEA (Empresa Distribuidora de Energía Atlántica), EDES (Empresa Distribuidora de Energía Sur)
Renewable energy resources
The National Promotion Direction (DNPROM) within the Energy Secretariat (SENER) is responsible for the design of programs and actions conducive to the development of renewable energies (through the Renewable Energy Coordination) and energy efficiency (through the Energy Efficiency Coordination) initiatives. Complementarily, the Secretariat for the Environment and Natural Resources (SEMARNAT) is responsible for environmental policy and the preservation of renewable and non-renewable resources.