Sunday, May 22, 2005

Strong push for wind energy in Argentina

Friday, 20 May

Strong push for wind energy in Argentina

Among Argentina’s natural energy resources one has remained virtually untapped and is in endless supply: wind. But with Siemens’ recent purchase of Bonus Energy this could be about to change.

Siemens, one of the world’s largest electrical engineering and electronics companies, took over the Danish wind power company, Bonus Energy in December of 2004. Bonus Energy had an accumulated global market share of approximately 9% at the time of the purchase and this now forms the bulk of the new Wind Power Division of Siemens Power Generation.
The announcement in Buenos Aires means Siemens, headquartered in Germany, is promoting the use of their technology in Argentina and will provide the equipment and servicing for companies installing wind farms.

“We think that there is a potential in Argentina and we want to participate in this development,” says Luis Alberto Betti, director of Siemens Power Generation in Argentina, of the country’s emerging wind energy industry.

Argentina’s long coastline and vast open expanses make it an ideal location for harnessing wind power and generating electricity, yet relatively high costs of wind turbine technology have resulted in a lack of large scale investment in this sector.

Recent environmental initiatives such as Argentina’s ratification of the Kyoto Protocol, which went into effect on February 15, 2005, and a federal law promoting the use of renewable energy sources could serve as a boost for this nascent industry.

To date Argentina’s ventures in harnessing wind power have taken place largely in Patagonia and also in the province of Buenos Aires. The Patagonian city of Comodoro Rivadavia derives 10% of its electrical supply from wind farms. But Argentina has a long way to go before it catches up with European countries, such as Denmark and Germany, which are the driving force in this global industry.

According to the Global Wind Energy Council, Europe has a 34,205 MW capacity derived from wind power, while Central and South America have a combined capacity of 150 MW.

“It has been an energy [source] that has required a certain subsidizing, that Europe has given,” explains Betti, “In Argentina, the price of the megawatt dollar was and is low compared with the cost of the installation of a wind farm.”

Although wind energy requires a heavier initial investment than fossil fuel resources, generation costs have fallen by 50% over the past 15 years. The technology itself consists of wind turbines, which are large structures generating approximately 1,500 kw of electricity. These installations generally consist of a tower up to 80 metres in height and a rotor with a diameter starting at 60 metres.

Wind turbines stand alone or are grouped together to form wind farms either on land or offshore. Every mill has a generator which is connected to an electrical grid.

The Argentine federal government passed a law which stipulates remuneration of 1 Argentine cent for every KW/h generated by wind energy. However, industry analysts say this incentive has not been enough to weigh against the high cost of installing wind farms and that in addition, the government has not met their side of the agreement.

Other potential incentives for the installation of wind turbines could come from abroad under the Kyoto Protocol, which calls for industrialized countries to cut harmful greenhouse gas emissions by 2012 to 5% below 1990 levels. As a developing country, Argentina is not bound to meet emissions targets. However, Argentina’s wind energy sector could stand to benefit from the Protocol’s Clean Development Mechanism, which outlines the possibility for developed countries to receive emissions credits (permission to pollute) for financing projects that reduce harmful emissions in developing countries.

Argentina’s 2004 energy crisis was widely regarded as driven by state regulation and not owing to a natural shortage, but it could be seen as another incentive for investment in renewable energy sources such as wind. But Betti says wind energy’s role in bridging the gap between demand and supply is minimal.

“It’s a contribution, no more,” says the Siemens Power Generation executive, who adds wind power functions best as one source among many providing the electrical grid.

Wind energy has a characteristic: it’s there when there’s wind,” says Betti, “You cannot trust in the continuous production of energy based exclusively on wind energy.”

“It doesn’t really benefit industry,” says Betti, “Industry requires dependability and permanency - wind power is for adding energy to the public grid.”

“What we see in Argentina is a potential for the installation of wind farms,” explains Betti, “Our project is, now early on, to contribute to this plan and to those businesses who want to install wind energy in the country.”

In related news United States General Electric announced this week that its wind energy (aeolic) department forecasts an annual turnover of 2 billion US dollars (approx. £ 1 billion). In 2002 when GE moved into the wind energy market sales reached 500 million US dollars and have since grown steadily.

GE currently has contracts for 1,600 wind generators (1,100 of them in the US) with a production capacity of 2.400 MW.

“Aeolic energy is the fastest growing sector in the energy market”, underlined Mark Little GE Energy Department vicepresident. (Bs.As.Herald/MP).-