Secretaría de Coordinación de Política Minera Ministerio de Energía y Minería Presidencia de la Nación ENERGY INFRASTRUCTURE IN ARGENTINA OPPORTUNITIES Madrid - April, 2017 Dirección Nacional de Infraestructura Minera Subsecretaría de Sustentabilidad Minera
Energy Infrastructure in Argentina INDEX Argentina s Power System Energy Scenarios Opportunities Renewables Power Transmission System Energy Efficiency Mining 2
Energy Infrastructure in Argentina Argentina s Power System Energy Scenarios Opportunities Renewables Power Transmission System Energy Efficiency Mining 3
Argentina s Power System INSTALLED CAPACITY Thermal Hydro 5% 2% Nuclear Renewable Thermal Hydro Nuclear Renewable Total 23449 10768 1755 753 MW MW MW MW 64% 29% 5% 2% 36725* MW 29% 64% * Corresponds to January 2018 Source CAMMESA www.cammesa.com.ar 4
Argentina s Power System ENERGY GENERATION 138 TWh* * 2016 Source CAMMESA www.cammesa.com.ar 6% Renewable; 0,4; 0% Thermal Hydro Nuclear Renewable 66 28 5,6 0,4 % % % % Thermal 28% Hydro Nuclear 66% Renewable 5
Argentina s Power System ENERGY TRANSMISSION SYSTEM BY VOLTAGE LEVEL AND REGION 6
Energy Infrastructure in Argentina Argentina s Power System Energy Scenarios Opportunities Renewables Power Transmission System Energy Efficiency Mining 7
Energy Scenarios SOCIO-ECONOMIC ASSUMPTIONS 8
Energy Scenarios POWER DEMAND 9
Energy Scenarios ELECTRIC POWER GENERATION All the scenarios reach 25% of electricty generation from unconventional renewable sources. The share of thermal generation is reduced. 10
Energy Scenarios INSTALLED CAPACITY INCREMENTS BY 2030 (GW) Energy efficiency reduces power demand by 8 GW. For 2030, between 14 GW and 18 GW of additional installed capacity from unconventional renewable sources will be required in order to reach 25% of generation from this source. 11
Energy Infrastructure in Argentina Argentina s Power System Energy Scenarios Opportunities Renewables Power Transmission System Energy Efficiency Mining 12
Renewable Energy Opportunties SOLAR POTENTIAL Argentina shares the highest levels of solar radiation worldwide. Puna s altitude of 3.500 m.a.s.l. favours high panel efficiency. 13
Renewable Energy Opportunties WIND POTENTIAL Argentina s wind potential could serve all of its energy requirements Constant winds in many regions, particularly in Patagonia (9-12 m/s, FC> 35%). 14
Renewable Energy Opportunities REQUIRED INVESTMENT PROJECTION 15
Renewable Energy Opportunities REGULATORY FRAMEWORK RENEWABLE ENERGY PROGRAM 2016-2025 Requires the gradual incorporation of renewable source energies: From 8% (01/01/2018) to 20% (12/31/2025) National promotion regime for the use of renewable energy sources for the production of electric power Regulates the operation of the Term Market of Renewable Energies (MATER) and allows Large Users to negotiate the purchase of energy from Generators and acquire the minimum steps required by the Law, or ensure up to 100% of their electricity consumption from renewable sources. 16
Renewable Energy Opportunities RENEWABLE ENERGY NATIONAL TARGETS 2018-2025 19
Renewable Energy Opportunities RENOVAR ROUND 1 Awarded projects: 29 Technology Projects MW GWh/year Provinces Eolic 12 707 2.882 BsAs, Chubut, Río Negro, Santa Cruz, Neuquén, La Rioja Solar 4 400 918 Salta, Jujuy Biogas 6 9 70 Santa Fé, San Luis, Córdoba Biomass 2 15 122 Corrientes, Misiones PAH 5 11 68 Río Negro, Mendoza TOTAL 29 1.142 4.060 14 Agencia Argentina de Inversiones y Comercio Internacional 21
Renewable Energy Opportunities RENOVAR ROUND 1.5 Awarded projects: 30 Technology Projects MW GWh/year USD / MWh Eolic 10 765,4 3.037 53,34 Solar 20 516,2 1.274 54,94 TOTAL 30 1.281,5 4.311 53,98 Agencia Argentina de Inversiones y Comercio Internacional 22
Renewable Energy Opportunities RENOVAR ROUND 2 Offered projects: 228 Required power: 1.200 MW Technology Projects MW Eolic 58 3.816,9 Solar 99 5.291,5 Biogas 36 74,9 Biomass 20 186,6 PAH 15 31,8 TOTAL 228 9.401,7 Agencia Argentina de Inversiones y Comercio Internacional 23
Renewable Energy Opportunities ROUND 1/1.5/2 24
Renewable Energy Opportunities RENOVAR SUMMARY OF AWARDS 25
Renewable Energy Opportunities OTHER RENEWABLE ENERGY POLICIES 26
Renewable Energy Opportunities CONCLUSIONS Our transition to renewables according to our Commitment COP 21 is going strong Eolic and solar generation are competitive without need for subsidies We will need about 1000 MW a year at least until 2025 A strong regulatory framework is in place and attracting investment There are incentives for local industry: goods and services Energy balance towards reduction of dependency on fossil fuels Perspectives of a long term growth, with direct benefits for the actors of the industry 27
Energy Infrastructure in Argentina Argentina s Power System Energy Scenarios Opportunities Renewables Power Transmission System Energy Efficiency Mining 28
Power Transmission Opportunities PRESENT AND PLANNED WORKS 900 MW RODEO CHARLONE JUNÍN PLOMER VIVORATÁ COMODORO 1000 MW 1400 MW 29
Power Transmission Opportunities BACKGROUND Argentina has set the goal of boosting clean energy consumption from current 2% to 8 % by the end of 2018, and to 20 % by 2025. Renewable energy auction program -designed to promote renewables- awarded 4.500 MW of new capacity. Additionally, thermal energy tendering process awarded another approximately 5000 MW of new capacity. Idle transmission capacity existing prior to the 2016 and 2017 renewable energy and thermal energy tendering processes has already been taken. Transmission lines tender goals: Maintain system balance and stability and increase reach and capacity of the grid. Reduce the infrastructure gap of Argentina by promoting the interaction between the public and private sectors through PPP contracts. 30
Power Transmission Opportunities PPP PROGRAM KEY ASPECTS Public-Private Partnership Program: High Voltage Transmission Lines. 7 Projects; ~2,175 km; 500 kv; ~USD 2.2 Bn. Successive tenders to be launched throughout 2018, beginning 1st Q 2018. Efficient risks allocation between the private contractor and the State in order to lower the costs of the project Tenders aimed at promoting partnership opportunities between national and international companies to undertake the works efficiently and according to high quality standards. Appropriate incentives to be set to allow local and international bidders to offer those products and services that, based on design, currency, term, risk profile and other features, they would be best positioned to provide. Contractual structure of the projects has been designed on the basis of the best PPP practices and project financing experiences in the region. Such structure aims to achieve -among others- the following goals: Homogeneity, simplicity and transparency along the whole PPP program Mitigate construction risks by issuing, on a quarterly basis and against construction milestones, transferable certificates for project financing. Each certificate will grant the final certificate holder an irrevocable, unconditional right to cash on a specific date for 15 years. 31
Power Transmission Opportunities PPP PROGRAM PROJECTS PIPELINE 500 kv TRANSMISSION LINES Length (km) AMOUNT (MM USD) HVTL RIO DIAMANTE/CHARLONE + TS CHARLONE 490 480 HVTL ATUCHA / BELGRANO II + TS BELGRANO II 35 80 HVTL BELGRANO II / SMITH + TS SMITH 100 170 HVTL ATUCHA II / PLOMER + TS PLOMER + DOBLE HVTL 35 km (ring GBA) 130 190 HVTL CHARLONE / PLOMER 415 420 HVTL PTO MADRYN / CHOELE CHOEL + HVTL VIVORATÁ / PLOMER 705 600 HVTL RODEO / LA RIOJA SUR + TS RODEO + TS LA RIOJA SUR 300 300 TOTAL 2175 2240 32
Energy Infrastructure in Argentina Argentina s Power System Energy Scenarios Opportunities Renewables Power Transmission System Energy Efficiency Mining 33
Energy Efficiency Opportunities PROGRAMS IMPLEMENTED Energy Diagnostics FAEE (Argentine Fund for Energy Efficiency ISO 50001 Implementation Tagging Street Lighting Public Buildings Goal: to reduce the electric energy demand in 16.8% compared to the trend scenario in 2030 34
Energy Infrastructure in Argentina Argentina s Power System Energy Scenarios Opportunities Renewables Power Transmission System Energy Efficiency Mining 35
Energy Opportunities in Mining GEOLOGICAL MINING POTENTIAL 14 Production 2 Construction 11 Feasibility 21 Advanced exploration 111 Initial exploration Gold and silver Copper Lithium 37
Energy Opportunities in Mining NOA ENERGY DEMAND 500 437 454 454 2022 2025 2030 450 MW MW 400 300 187 200 100 0 7 2018 2020 MW CUYO 900 800 700 600 500 400 300 200 10010 0 2020 821 821 2025 2030 820 MW 335 2022 MW PATAGONIA 70 60 5040 40 30 20 10 0 2022 63 2025 55 2030 60 MW 40
Energy Opportunities in Mining PROPOSED PROJECTS NOA 860 km 860 Mill USD TSEA-SHM TSEA-LQ HVTL from TS "El Altiplano" to limit Salta-Catamarca. TS (132/66/33 kv). HVTL from TS"El Altiplano" to La Quiaca (limit. TS (132/66/33 kv). SHM-ALU LRS-ALU HVTL from Salar del Hombre Muerto to TS Alumbrera. HVTL from TS Alumbrera to TS La Rioja Sur, through Catamarca and La Rioja. 41
Energy Opportunities in Mining PROPOSED PROJECTS CUYO 380 km 360 Mill USD ETR-CONST HVTL from TS Rodeo to Lama, next to TS La Mesa (150 km) and to Constelación (100 km). CAL-PEL HVTL from Calingasta to Los Pelambres (Chile). 42
Energy Opportunities in Mining PROPOSED PROJECTS PATAGONIA CLP - PSJ - GG HVTL 132 kv C. Piedra Buena - San Julián (110 km) TS San Julián (132/33 kv) HVTL 132 San Julián Gob. Gregores (200 km) TS Gob. Gregores 132/33 kv 1490 km 1273 Mill USD CC - GG - PM HVTL 500 kv Cóndor Cliff - Gob. Gregores (170km) HVTL 500 kv Gob. Gregores - Perito Moreno (250 km) PM - G - PA HVTL 500 kv Perito Moreno Gastre (500 km) HVTL 500 kv Gastre Piedra del Aguila (260 km) 43
Exploration companies Argentina 2017 Company (operator) Trident Southern Expl. Patagonia Gold S.A Minera Sierra Grande S.A Glencore - Goldcorp - Yamana. (Minera Alumbrera Ltd.) YMAD Silver Estándar Resources Inc.(Mina Pirquitas Inc. ) Glencore (Comapañia Minera Aguilar S.A) Glencore (Comapañia Minera Aguilar S.A) Austral Gold (Troy Resources Argentina Ltd.) Yamana Gold (Minas Argentinas S.A) Barrick Gold Corp (Minera Argentina Gold S.A (MAGSA) AngloGold Ashanti Ltd - Fomicruz (Cerro Vanguardia S.A) Goldcorpo (GoldSilver S.A) Pan American Silver Corp (Minera Triton Argentina S.A) Hoschild Mining - McEwen (Minera Santa Cruz S.A) Hunt Mining Corp. (CERRO CAZADOR S.A) Patagonia Gold - Fomicruz (Patagonia Gold S.A) FMC Lithium Corp (Minera del Altiplano S.A) GoldCopper S. A. - Toyota Tsuho - Jemse (Sales de Jujuy S.A) GoldCopper (Borax Argentina SA) Project Andacollo Lomada de Leiva Sierra Grande Bajo La Alumbrera Farallón Negro Pirquitas Mina Aguilar Planta Palpalá Casposo Gualcamayo Veladero Cerro Vanguardia Cerro Negro Manantial Espejo San José MINA MARTHA El Tranquilo (Cap oeste) Fenix Salar de Olaroz Tincalayu Main mineral Gold Province Neuquén Santa Cruz Rio Negro Stage Re engineering Closing Closed Copper Catamarca Operation Gold Silver Lead Operation Operation Operation Gold Gold Catamarca Jujuy Jujuy Jujuy San Juan San Juan Gold San Juan Operation Gold Santa Cruz Operation Gold Santa Cruz Operation Silver Santa Cruz Operation Silver Silver Gold Lithium Santa Cruz Santa Cruz Santa Cruz Catamarca Operation Operation Operation Operation Lithium Jujuy Operation Borax Salta Operation Operation Operation 44
Coming Mining Projects Argentina 2017 PROVINCE Neuquen Santa Cruz Jujuy Salta Santa Cruz Mendoza Catamarca Chubut Salta Salta San Juan Salta Chubut Río Negro San Juan Mendoza Salta Jujuy San Juan San Juan Chubut Mendoza Salta Salta Salta San Juan San Juan Santa Cruz Santa Cruz Santa Cruz San Juan San Juan PROJECT Andacollo Cerro MGold Caucharí-Olaroz Salar del Rincón El Tranquilo (Cap-Oeste) Potasio Río Colorado Agua Rica Suyai (Esquel) Lindero Sal de Vida El Pachón Taca Taca Navidad Calcatreu Lama San Jorge Sal de los Angeles Chinchillas Constelacion (Josemaría) Los Azules Laguna Salada Don Sixto (La Cabeza) Diablillos El Quevar Salar de Centenario Del Carmen Altar Joaquín Pingüino La Josefina Valle de Chita Filo del Sol Company (Operator) Main Metal Trident Southerm Explorations SPA Gold Yamana Gold (Estelar Resources Lmtd) Gold, Silver Lithium Americas (Minera Exar SA) Lithium, Potassium ENIRGI Group (ADY Resources Ltd) Lithium, Potassium Patagonia Gold S.A. Gold, Silver Potasio Rio Colorado S.A. Potassium Yamana Gold (Minera Agua Rica SA) Copper, Molybdenum Yamana Gold Gold, Silver Fortuna Silver Mines (Mansfield Minera SA) Gold Galaxy Resources Limited Lithium, Potassium Glencore (Pachon Minera SA) Copper,Molybdenum,Gold First Quantum (Corrientes Argentina SA) Copper,Molybdenum,Gold Pan American Silver Corp (Minera Argenta SA) Silver, Lead, Copper Pan American Silver Corporation (Minera Aquiline S.A.) Gold, Silver Barrick Gold (Barrick Exploraciones Arg. SA) Copper,Gold,Silver Solway Investment Ltd (Minera San Jorge SA) Copper Lithium X Energy Corp. (PLSA) Lithium Grosso group (Golden Arrow Resources) Silver,Zinc,Lead NGEX Resources (DEPROMINSA) Copper,Gold,Silver Minera Andes Inc. (McEwen Mining) Gold,Silver,Copper U3O8 Uranium Yamana Gold (Extorre Gold Mines Lmtd) Gold Silver Standard Resources Inc. Gold, Silver Golden Minerals Company (Silex Argentina S.A.) Silver, Lead ERAMET (Eramine Sudamericana SA) Lithium Barrick Gold (Barrick Exploraciones Arg. SA) Gold Sibanye Gold Lmtd (Stillwater Mining Corporation) Gold,Silver,Copper Pan American Silver (Coeur Argentina S.R.L) Gold, Silver Austral Gold Gold,Zinc,Lead,Silver Hunt Mining Corp (Cerro Cazador) Gold Minsud Resources (Minera Sud Argentina) Copper, Gold, Molybdenum Filo Mining Corp Copper Start operation nd 2018 2019 2019 2017 nd 2020 nd 2019 2019 nd 2023 2020 nd 2025 2020 2020 2018 nd 2023 nd nd 2025 2025 2020 nd 2025 nd nd 2018 nd nd Power to Install (MW) 25 3 9 12 40 7 25 125 6 6 80 50 26 130 10 2 12 10 40 8 31 103 28 250 17 20 5 7 23 50 10/16 10 20 7 9 15 48 160 35 240 10 8 10 2 12 10 15 7 40 17,5 8 35 32 80 nd 2 nd 2 5 2 10 13 nd 2 LOM 50
Thank you! Pedro Bartolomé Palmés ppalmes@minem.gob. ar