Argentina has issued the National Energy Transition Plan to 2030 (“NETP 2030”) and the Guidelines and Scenarios for the Energy Transition Plan to 2050 (“GSET 2050”). Such documents were made public by Resolution No. 517/2023 and Resolution No. 518/2023 of the Secretary of Energy. These plans aim to change the country’s energy matrix towards cleaner and more sustainable sources, thereby reducing greenhouse gas emissions responsible for global warming.

Below is a summary of the key takeaways of the NETP 2030 AND GSET 2050.

1. NETP 2030

1.1. Scenario and variables considered

The NETP 2030 is based on the following main assumptions:

  1. Growth of gross domestic product (GDP) of 2% per year.
  2. Electricity demand growth of 1.5% on a yearly basis, and natural gas demand growth of around 1.1%.
  3. Fuel demand growth of 2.3% on a yearly basis.
  4. Growth in natural gas production for local consumption between 2.4% and 3%, and in oil production between 3.4% and 6%.
  5. Reduction in the share of thermal generation from 59% to 35% (however, it contemplates 3,000 MW of the future tender soon to be called).

1.2. Quantitative targets

The NETP 2030 proposes the following quantitative targets:

  1. Not to exceed the total aggregate net emissions of 349 million tCO2.
  2. Reduction through energy efficiency and responsible energy use of at least 8% of energy demand.
  3. Share of more than 50% of renewables in electricity generation (currently, this percentage is around 14%, therefore this would require approximately 7.5 GW of new installed capacity).
  4. Electric car penetration of 2% of the vehicle fleet.
  5. Target of 1,000 MW of renewable distributed generation (currently, there is slightly more than 20 MW of distributed generation capacity installed, on the applicable legislation and additional considerations, see our report here).
  6. Expansion of the high voltage electricity transmission grid by 5,000 km of new lines (see our reports on the National Grid Expansion Plan here and on the recent call for expressions of interest for transmission works, here).

1.3. Qualitative targets

The NETP 2030 also proposes the following qualitative targets:

  1. Enabling conditions for the local development of the clean energy technology value chain, including new non-conventional and emerging technologies.
  2. Creation of new local and sustainable jobs related to the sector.
  3. Reduction of energy poverty as the needs associated with this concept are established.
  4. Facilitation of a sustainable energy transition.

1.4. Investments required

To meet the goals outlined in the NETP 2030, the document estimates that significant investment by the private and/or public sector will be required, totaling approximately 86,642 MM US$. It is estimated that around 23,362 MM US$ will be for new electric power; 3,817 MM US$ for transmission and 10,272 MM US$ in electric distribution; 10,000 MM US$ in LNG; 27,777 MM US$ in energy efficiency; 911 MM US$ for distributed generation, and 503 MM US$ in low emission H2.

We understand that given the magnitude of capital needed to comply with the NETP 2030 guidelines, the participation of the private sector and multilateral entities will be essential, alongside appropriate sectorial and macroeconomic base conditions.

1.5. Actions to meet the NETP 2030 objectives

The following actions are envisioned to comply with the targets set forth in the NETP 2030:

  1. Updating Laws 26,190 and 27,191: The need to update these laws is under study, in line with the technological developments of renewable sources. As this regime ends in 2025, an eventual reform should consider the necessary amendments in terms of fiscal and tax benefits during the additional term.
  2. Distributed Generation Law: The possibility of revising the regulatory decree of the law, to allow a higher participation and adhesion by the provinces.
  3. New regulatory frameworks: Such as the energy efficiency, promotion of low-carbon H2 (for additional information on H2 and the bill, see here), LNG, and e-mobility bills.

Among other actions, the PTE 2030 assumes the continuity of RenovAr auctions and the development of MATER, as well as other specific programs.

2. GSET 2050 – scenarios and key figures

The GSET 2050 considers three scenarios, referred as baseline, optimistic and ambitious. The three scenarios share a similar evolution until 2030, after which they diverge. Of these three scenarios, we highlight the following:

2.1. New installed capacity

Under the base scenario, 54 GW of new installed capacity is considered; 58 GW under the optimistic scenario; and 69 GW in the ambitious scenario. Of these overall values, a large share of renewables stands out: 34 GW in the baseline scenario; 38 GW in the optimistic scenario; and 45 GW in the ambitious scenario.

According to the GSET 2050, investments would total 101,536 MM US$ under the base scenario; 107,016 MM US$ under the optimistic scenario; and 113,679 MM US$ under the ambitious scenario.

Likewise, investments in distributed generation of around 2,273 MM US$ are considered in all scenarios.

The high share of electricity from renewable sources in the matrix stands out: 80% in the base scenario; 84% in the optimistic scenario; and 87% in the ambitious scenario.

2.2. Transmission grid expansions

Regarding transmission network expansions, an investment of around 7,594 MM US$ is considered in the base scenario; 8,829 MM US$ in the optimistic scenario; and US$ 10,688 in the ambitious scenario. To date, the GSET 2050 does not establish quantitative targets in terms of new transportation capacity.

2.3. LNG

Regarding LNG, although the GSET 50 does not establish quantitative targets, it assumes investments of around 22,500 MM US$, 30,000 MM US$ and 40,000 MM US$ in each respective scenario.

2.4. H2

Finally, investments in low-emission H2 are considered in extremely significant amounts, namely 9,574 MM US$, 21,440 MM US$ and 31,545 MM US$ in each scenario.

 

For additional information, please contact Nicolás Eliaschev, Javier Constanzó, and/or Rocío Valdez.