The IAE Gral. Mosconi has just published its Energy Trends Report with data from December 2022. An interrelated look allows inferring deep trends in the evolution of the sector. Some are encouraging; others, worrying.
The Vaca Muerta formation in Neuquén has become the star deposit in Argentina, it is in a phase of dynamic growth and its production aims at a “short-term global window of opportunity”. But to seize the opportunity, gigantic bottlenecks would have to be removed.
In 2023, the internal supply of energy is in a critical phase that raises questions regarding how and when we will resolve them.
1.- Electricity, at a crossroads.
– In the last 12 months, the demand for electricity increased by 3.2% compared to 2021. But electricity generation will owe 2.1%. Argentina falls back in production and resorts to imports: Brazil, Uruguay and Paraguay. Result: imports as a whole increased by 666% in the year; and it already represents 4% of our domestic demand.
– The year 2022 ended with a terrible performance of the generating park, which due to lack of adequate maintenance; Due to unavailability of fuel and other causes, it has kept some 12,000 MW out of service, an unacceptable value for which Cammesa should give a well-founded explanation.
– It arises from the reports that the generation park uses a greater proportion of fuels that generate greenhouse gases (GHG). Natural gas will be produced in thermoelectric generation by 13.2%; and in its place fuel oil increased by 48.7%; and diesel 20.2%; and both emit more GHG.
– In 2022, a drop in nuclear generation is observed, which currently represents only 5.4%, when a year ago it represented 7.7% of the total generated. There is also a marked stagnation of renewable energies promoted by law 27,191, whose rate of expansion this year has been 11%, when in 2021 the growth of said energies had been 32.8% per year.
2.- Argentina, in a context of war and international demand for energy, imports more than it exports, and its chronic energy deficit increases.
The world is strongly impacted by the energy consequences of the war in Ukraine. There are countries that have benefited and others that have been harmed by the conflict. Argentina –despite its enormous availability of energy resources– has not been able to capitalize on this global demand for greater volume requirements and higher sales prices.
The report shows that the country has suffered heavy losses in its foreign energy trade. In 2021 the energy trade balance was negative US$559 million; in 2022, that deficit multiplied eight times, reaching US$4.47 billion. It was also verified that the import quantities increase in greater proportion than the export quantities.
3.- Hydrocarbons, dual performance: sustained growth in Vaca Muerta, and fall in the rest of the basins.
The country accentuated its external dependence; Several factors came together. A great annual growth in the production of crude oil from Vaca Muerta -49% compared to 2021-; in addition, a 37% increase in gas production in the formation. These values are negatively offset by the falls in all the conventional basins whose production drops by 3.3% and 8%, respectively, something that is of great concern to non-Neuquén union leaders.
As a result, the annual increases in both oil and gas are modest, reaching 13% in total oil and 7% annually in natural gas. When these values are confronted with the increase in domestic demand for both gas and oil, there is not much cloth left to cut.
4.- A special praise to the national producers of biofuels.
Biodiesel and ethanol take the productive palms. The increase in its production in twelve months (data as of November) exceeded that of all traditional items: biodiesel has expanded by 23% in 2022; and ethanol, by 14.8%. They supplied the market and also exported.
* Former Secretary of Energy and President of IAE Gral. Mosconi.
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