The price of renewable energy in Argentina is shaped by two parallel realities. On the one hand, there are contracts awarded through public tenders, such as the RenovAr programme or schemes linked to specific infrastructure works. On the other hand, there are private bilateral agreements under the Term Market for Renewable Energy (MATER), where direct competition between market players prevails.
In traditional public auction mechanisms, awarded prices have fluctuated significantly over time. On average, they have ranged between USD 60 and USD 110.5/MWh, depending on the year of the call, the technology involved, project location and financing conditions.
By contrast, in the term market – where bilateral contracts are signed between private parties without subsidies or regulated prices – the most recent deals are being closed at around USD 60–70/MWh. This represents a gap of up to 50% compared with the highest prices seen in public auctions.
“Prices are now closer to USD 60/MWh and the market is quite competitive, but we don’t expect them to fall below those levels,” a source familiar with the mechanism told Energía Estratégica.
According to industry players, solar and wind projects under MATER are currently cheaper than bundled purchases through public tenders. However, the final price depends on multiple variables, including the contract structure, the offtaker, contract tenor, capacity factor and the project’s location.
A key difference between the two models is contract duration. Private agreements typically have shorter tenors, ranging from three to ten years, compared with the 20-year average seen in public tenders organised by the government in previous years.
Public tenders versus private contracts
Public auctions include initiatives such as different rounds of the RenovAr programme and RenMDI. Between 2016 and 2023, these schemes awarded a total of 5,929 MW across 283 power purchase agreements (PPAs).
However, Argentina’s wholesale market administrator, CAMMESA, reports that only 123 contracts are currently in force, with an average wholesale market cost of USD 73.5/MWh. This figure reflects the final energy cost of the contracts, including incentive factors, indexation mechanisms and recognised market costs.
In the Renewable Energy Term Market, project awards are mainly granted through dispatch priority to supply large consumers. Since 2023, this has been complemented by mechanisms introduced under Energy Secretariat Resolution 360, which allow projects conditional on transmission upgrades or demand expansion.
According to the latest CAMMESA report, 136 projects have been granted dispatch priority, totalling 6,019.7 MW. Of this capacity, 96 projects fall under the Full MATER category, representing 3,726.5 MW, while the remaining 40 are classified as Reference A, accounting for 2,293.2 MW.
Nevertheless, only 85 projects are currently in effective operation, contributing 3,646.5 MW to the system. This highlights persistent barriers preventing contracted capacity from becoming dispatched energy, mainly due to grid infrastructure constraints.
An additional 3,015 MW has been awarded under schemes requiring associated infrastructure works or justification based on demand growth, and these projects remain at different stages of development. This gradual expansion has helped sustain activity while the market awaits clearer definitions on privately concessioned high-voltage transmission tenders.
New rules, a new market
Under new guidelines issued by the Energy Secretariat, electricity distribution companies must now cover at least 75% of their seasonal demand through bilateral contracts. This shifts procurement responsibility to individual market participants and strengthens the role of the term market as the main tool for structuring tailored supply agreements.
At the same time, the government has re-authorised thermal, hydroelectric and nuclear power plants to participate in term contracts, provided they are commissioned after 1 January 2025. This broadens available supply and increases competitive pressure on renewables, which will need to compete more directly on price and efficiency.
“The market is changing. Now that the term market has been fully opened, we will have to see how contracts to supply large consumers evolve,” industry sources said.
Looking ahead, market dynamism will depend on the negotiating capacity of stakeholders, improvements in electricity infrastructure and the political framework that ultimately consolidates this transition.
