MercoPress. South Atlantic News Agency

Argentine energy crisis leaves industrial customers idle

To avoid residential blackouts the Argentine government imposed stricter electricity consumption restrictions plunging some industrial customers to an indefinite supply cut off as demand again peaked when temperatures plunged to freezing levels.

The government instructed companies and government offices to save 1.200 MW per peak hour consumption, which is between 18:00 and 22:00 hours. This is the toughest restriction so far since the cold spell begun generating electricity supply problems two weeks ago and is equivalent to the demand of 3.6 million people. At the end of May the target was 800 MW, 50% less. Restrictions are extensive to the whole Argentine territory and reached 4.275 clients, including companies, factories, leisure centers, universities and even ministerial offices. Apparently the alarm went off when consumption reached 18.319 MW at 19:50 hours Thursday while today the level was brought down to 17.500 MW Problems were twofold: peaking demand and fuel (natural gas and gas oil) supply shortages for generating plants which forced some of them to appeal to faster burning and therefore dearer, fuel oil. Furthermore one of the country's main dams is short of water and a generating plant in Ezeiza broke down causing a 900 MW shortage. Something similar happened with the country's two largest natural gas distributors who were instructed to privilege home consumption and cut off supplies to some industrial customers. Officials at Metrogas SA and Gas Natural BAN, both based in Buenos Aires, said they stopped gas deliveries to 158 companies in order to ensure sufficient supplies for residential users. Neither company would say when gas flows would resume. Both companies asked the 688 gasoline stations they service in Buenos Aires to suspend until further notice sales of compressed natural gas which is used by most of the city's taxi fleet. Energy shortages threaten more than four years of economic growth exceeding 8% in Argentina, a boom fueled by exports of commodities and industrial goods such as automobiles. A cold front at the end of May forced rolling blackouts in the capital, causing fuel shortages in South America's second- biggest economy and leading Argentina to cut natural gas shipments to Chile. Government officials blame the shortages to the most severe autumn in 45 years (winter begins June 21st in the Southern hemisphere), but a national weather service spokesman said the temperatures are within the ''normal'' range for this time of year. Energy market analysts argue that government price controls on the sale of energy have damped investment throughout the industry. Argentina hasn't allowed energy rate increases since 2002. The supply problem at this growing rate of demand is forecasted to continue for the next two winters at least, because energy investments take time to mature. "Industrial supplies will be cut as long as the low temperatures continue and domestic consumption remains high", said Betina Llapur, director of external affairs at Gas Natural BAN. "Industries can use alternative energy such as diesel fuel or fuel oil since we are obligated to ensure supplies to residential clients'' insisted Llapur. The industry shortage is proving increasingly troublesome for the auto sector at a time when all companies must increase production capacity to meet car demand both domestically and from Mercosur's main partner Brazil.