The Ministry of Energy is betting on a electricity exchange with Brazil to spend the summer. High temperatures in January and February usually bring with them supply cuts to Buenos Aires. This was stated by Flavia Royón, Undersecretary for Energy not “should we have generation problems”in a radio interview
The official, on the other hand, was unable to clarify the doubts generated by the distribution companies, such as Edenor and Edesur. “There may be occasional cuts. There are forecasts in case we have a peak demand. There is a contingency plan. We shouldn’t have generation problems,” he told Radio Con Vos.
Regarding the cuts of Edenor and Edesur, Royón said that this is “controlled by the regulatory body”, in relation to the Enre. “I’m optimistic. We need to strengthen the Edenor and Edesur issue, they are strengthening the crews,” he said. There were several days of extended outages last summer, in line with very high demand.
The official said that “a few years ago we had whole days without electricity”, although he did not explain when he was referring. The delay in tariffs – which has begun to be corrected with segmentation, thanks to which millions of families will have increases of more than 140% – is usually the driver of higher consumption, since families do not feel a heavy burden in their pocket if the electricity bills are accessible in relation to other prices.
Argentina and Brazil have had energy trading agreements since 2008. They will last until mid-2025. They include trade, including emergency trade (Brazil needed it in its 2021 water crisis), and trade “not valued for non-trade opportunities and with return,” according to official sources.
In 2021, with Brazil in the midst of a water crisis, Argentina exported 3,795 GWh of electricity to the largest Mercosur country. In 2022 Brazil has already recovered from this situation with its water, and exported 3,741 GWh to Argentina at a cost of 100 US dollars, considered competitive amid sky-high international prices due to the Russian invasion of Ukraine.
“This volume of energy covered about 3% of the total demand for the period, and brings an associated benefit compared to the supply alternative which had a weighted average cost of US $185 per MWh, with a significant cost reduction effect of the electricity market, subsidies and savings on exchange rates”, they underlined in Energia.
In the government it is estimated that Argentina paid $376 million less to buy from Brazil than if it had to be supplied in other ways, such as buying fuel for use in generating electricity.
Charles Arterburn is a seasoned business journalist for News Rebeat, where he provides comprehensive coverage of the latest trends and developments in the world of finance and economics.