Argentina’s Power Capacity to Increase to 61.8GW by 2035, Forecasts GlobalData

­Argentina has been grappling with significant power shortages in recent years, compelling the government to focus on augmenting the nation's installed capacity. through the development of hydropower, nuclear power, and renewable energy. Against this backdrop, the cumulative power capacity of the country is forecast to reach 61.8GW in 2035, registering a compound annual growth rate (CAGR) of 2.8% during 2024-35, according to GlobalData, a leading data and analytics company.

GlobalData’s latest report, “Argentina Power Market Outlook to 2035, Update 2025 – Market Trends, Regulations, and Competitive Landscape,” reveals that the power generation sector in Argentina is marked by outdated and inefficient equipment, which significantly reduces the actual available capacity compared to the installed capacity. Consequently, there is a minimal margin between supply and peak demand, often leading to supply shortages. Typically, this gap is managed through government-imposed consumption restrictions; however, the lack of such measures at other times necessitates the importation of additional electricity.

Attaurrahman Ojindaram Saibasan, Senior Power Analyst at GlobalData, comments: “Reliance on Bolivian natural gas represents a significant vulnerability for Argentina. Declines in Bolivian production have led to diminished exports, placing strain on Argentina's energy supply. The resultant increase in fuel import costs exacerbates Argentina's trade deficit and inflation, contributing to currency devaluation and escalating energy expenses.

“Additionally, energy tensions between Brazil and Argentina occasionally surface, stemming from limitations on power transmission and disputes over hydroelectric resource utilization during periods of drought.”

With regard to nuclear power, the country is advancing the development of its first indigenously designed power reactor prototype, CAREM25. The National Atomic Energy Commission (CNEA) received authorization for site use and construction from the Argentine Nuclear Regulatory Authority (ARN) in September 2013, and the pouring of the first concrete occurred in February 2014, with the first reactor expected to be commissioned by 2030.  

But the major focus is on hydropower and renewables. Since their inception in 2016, the RenovAr auctions have established competitive, long-term power purchase agreements (PPAs) for utility-scale wind, solar, and small hydro projects. The more recent MATER mechanism allows corporate off-takers to sign PPAs directly. These initiatives ensure stable revenue streams, mitigate project risks, and have catalyzed the development of nearly 6GW of new renewable energy capacity since their launch. 

Saibasan adds: “Historically, utilities' finances have been burdened by periodic freezes and blanket subsidies, leading to distorted price signals. In response, successive administrations have implemented targeted subsidy-reduction programs. These programs are progressively transitioning to means-tested support and cost-reflective tariffs to enhance financial viability, attract private investment, and discourage overconsumption.”

To better integrate dispersed renewable energy sources and enhance system resilience, regulators have given priority to the construction of new high-voltage transmission lines. They have also strengthened regional interconnections with Brazil, Uruguay, and Chile, and mandated planning for "network readiness" in new generation licenses.

Saibasan concludes: “Compañía Administradora del Mercado Mayorista Eléctrico Sociedad Anónima (CAMMESA) is working towards better alignment of policies to drive power capacity expansion. CAMMESA's merit-order dispatch rules, spot-market pricing mechanisms, and capacity payment designs evolve through regulatory decrees. These elements shape which technologies operate and when, how risks associated with scarce capacity are priced, and ultimately influence investment decisions across thermal, hydro, nuclear, and renewable assets. 

“Collectively, these policy drivers lay the financial, regulatory, and technical foundation that governs Argentina's power market dynamics. They guide decisions regarding who builds what and where, as well as the associated costs, while balancing the objectives of affordability, reliability, and decarbonization. This is expected to bolster renewable capacity.”