ARGENTINA: Not Everyone Sold on Government Wind Energy Project

By Marcela Valente Reprint | | Print |

Marcela Valente

BUENOS AIRES, Nov 3 2005 (IPS) - The Argentine government announced that it will invest 55 million dollars in wind energy, to boost electricity production and manufacture windmills. But while environmentalists and proponents of wind power applaud the new focus on this renewable energy source, they have reservations about the project itself.

The southern region of Patagonia, a vast wind-swept plateau, is ideal for the production of wind energy. But so far there are only 10 wind parks, which generate a combined total of just 27 megawatts for a market with a total demand for 23,800 megawatts.

Around 90 percent of the electricity consumed in Argentina comes from the burning of fossil fuels, like oil and natural gas – non-renewable resources whose prices are soaring and which contribute to global warming and climate change.

The rest of the country’s electric energy is generated by hydropower stations (4.7 percent), nuclear power plants (1.3 percent), and firewood, sugar cane bagasse, windmills and solar panels, in tiny proportions.

Since the mid-1990s, environmental organisations have been pushing for the state and private companies to harness the inexhaustible source of energy offered by wind in Patagonia, in order to make the country’s sources of energy more sustainable. But their demands and proposals for the gradual development of wind energy had basically fallen on deaf ears.

Last year, the government of centre-left President Néstor Kirchner pledged to increase the use of renewable energy sources until they account for eight percent of the country’s electricity, by the year 2013. But that goal appeared to be a mere expression of goodwill until the state finally announced a major investment in wind power.

The government of Kirchner’s home province of Santa Cruz, which forms part of the Patagonia region, signed an agreement with the state-run technology company Invap to dedicate 55 million dollars to manufacturing 34 high-power aerogenerators to produce wind energy for local consumption, and to sell on the international market.

“First we are going to develop the prototype of a windmill.and in five years we could be covering local demand and participating in international markets with our own product, which could be used in severe climatic conditions,” Invap engineer Hugo Brensdrup told IPS.

“To recover the investment, demand for wind energy and the share of the country’s total electric production represented by wind power will have to gradually increase, in order to generate a market,” he added. Brensdrup welcomed the government decision to complete the connections to feed the wind energy generated in Patagonia into the national power grid.

According to Brendsrup, the new windmills will not only make it possible to replace imported wind turbines and supply other markets, but will also create an industry using local labour power. “To manufacture 100 aerogenerators, we’ll need a total of 3,000 to 4,000 workers, at all levels of the process,” he enthused.

But the plan to produce windmills without first having a market for the energy has drawn skepticism and criticism from proponents of wind power.

Laura Gianelli with the Argentine Wind Energy Association told IPS that “to develop a production line, you need technological capacity and a market.”

“It’s always good to foment local technological development, but when you’re talking about an investment of this magnitude, it is necessary to carry out a cost-benefit analysis in each case, because the market for windmills has not been developed at either the local or regional level,” said Gianelli.

Juan Carlos Villalonga, campaigns director at Greenpeace Argentina, also said the longed-for development of wind energy is getting off to a bad start, due to a lack of transparency.

“The wind energy project should not be tied to one single company. It isn’t healthy. We would prefer to have clear rules for all of the firms,” he commented to IPS.

Both Gianelli and Villalonga point to the model implemented in Brazil, where the Proinfa programme for alternative energy sources set a fixed price for the sale of 1,400 megawatts of wind energy for a specific number of years. Proinfa also provides government financing and sets a proportion of parts that must be locally produced.

By guaranteeing the purchase of energy at a previously fixed price, Brazil has created a market that is open to participation by all companies in the sector, not just one that might not be the best, said Villalonga.

“I’m not saying that if Invap makes it, it’s no good,” said Gianelli. “It’s a good thing to begin to discuss these issues and it’s good that there is concern about doing something along these lines, but I have many reservations.

“Who will these windmills be sold too? How much better quality will they be than the ones already on the market?” she asked.

Gianelli said today’s wind turbine technology is very sophisticated, and will become even more so when it has to compete with conventional energy sources.

Oscar Balestra, the local manager of Vestas, a Danish company that produces windmills for the global market, concurred with the environmentalists in calling for the government to “open up the playing field” to allow all of the industry’s companies to take part and compete.

In a conversation with IPS, Balestra said the idea to create an Argentine factory “is very commendable,” but raised many questions with respect to the challenges that the company will have to face to survive in a very demanding market, in which a number of firms have years of experience.

“What experience does Invap have to compete with (Germany’s) Siemens, General Electric (from the United States) or Vestas, which already have orders for 2008? And if we do develop a competitive product here, what customers are going to buy a windmill from a country without any experience in installing them?” asked the executive.

He also warned that large investment banks that finance the installation of windmills will not accept aerogenerators without guarantees that they will suffer no operating problems in the short to medium term.

Villalonga, meanwhile, noted that although it is true that wind power technology is expensive and difficult to incorporate, local production of turbines should not be a requisite for taking the leap towards greater generation of wind energy.

The route forward, according to environmentalists, is to subsidise demand.

“The standards set for the wind energy industry are higher than for any other industry,” he complained. “If there are strong competitors in the market, why not establish clear rules so that everyone can participate?”

The questions have been put on the table, and environmentalists and wind power experts hope the answers will not be blown away by the Patagonian winds.