Argentina is taking impressive steps towards overcoming its challenges in the energy sector. Development of CAREM25, the country’s first indigenously designed nuclear reactor prototype, is further along. This $1.3 billion initiative is meant to foster the country’s power generation capacity. In recent years, the agency has been plagued with major inefficiencies and shortages. The first reactor should be commissioned in 2030. In reply, Argentina’s government is prioritizing an energy diversification strategy that features hydropower, nuclear power, and renewable energies.
In September 2013, the National Atomic Energy Commission of Argentina was granted the key site use authorization. The approval issued by the Argentine Nuclear Regulatory Authority (ARN), which allowed construction to start. In mid-February 2014, the project took a huge step forward. The team celebrated the pouring of the first concrete for the CAREM25 reactor. This development represents a crucial component of Argentina’s energy strategy and reflects the nation’s commitment to enhancing its energy independence.
Addressing Power Generation Inefficiencies
Although Argentina has a technically integrated power generation sector, the equipment is mostly old and inefficient. This leads to a giant delta between installed capacity and the actual capacity available. The country has been experiencing extreme power deficits. These unfortunate shortages have not only stressed our economy, but have completely upended the daily lives of countless citizens. Prioritizing safely and reliably modernized infrastructure built by supporting a diverse exchange of energy is a direct answer to these long-recognized, long-ignored struggles.
Besides nuclear power, Argentina has consistently supported hydropower and renewables to increase its energy mix. The RenovAr auctions first started in 2016. They have developed some of the lowest cost competitive long-term PPAs we’ve ever seen for utility scale wind, solar, and small hydro projects. In total, these auctions have led to the construction of almost 6GW of new renewable energy capacity. This expansion provides the clean energy resources the country needs to optimize its power generation landscape.
Vulnerabilities in Energy Supply
Even with these advances Argentina’s energy supply is still under threat, as it continues to rely heavily on Bolivian natural gas. Production declines from Bolivia have resulted in reduced gas imports, further stressing Argentina’s already precarious energy supply. This has led to high costs of importing fuel, worsening the country’s trade deficit and inflationary pressures.
Soaring fuel import costs fuel inflation, weaken the Argentine currency and raise consumer energy costs for Argentines. These economic pressures make it even clearer that we need to diversify our energy sources and shore up domestic production capabilities. By focusing on nuclear power and renewables, Argentina seeks to mitigate its vulnerabilities and create a more resilient energy infrastructure.
Future Projections for Power Capacity
Argentina’s cumulative power capacity will reach 61.8 GW by 2035. This increase matches an anticipated CAGR of 2.8% from 2024 through 2035. At the heart of this growth trajectory is the federal government’s commitment to expanding the government’s energy portfolio. Further, it aspires to meet the urgent needs of its residents.
Even as CAREM25 works its way towards historic completion, it serves as a poignant illustration of Argentina’s will to prevail over its energy ailments. The success of implementing this project is very important. It, along with continued investments in clean energy, will usher in a sustainable, prosperous, and secure clean energy future for the country.