Energy South America

Roberto Lavagna, former Economy Minister of Argentina under Nestor Kirchner, claimed yesterday that an energy crisis has already begun in Argentina. During a luncheon for industrial executives, Lavagna was asked by one executive whether there is a risk of an energy crisis, to which he responded that it has already begun.

He cited as an example the increase of power cuts in Argentina over the same time last year. Lavagna said that frequently electric distribution companies will take lines out of service alegedly for repairs and replacements, when the truth is that there is not enough power to meet demand. These maneuvers amount to concealed power cuts.

Lavagna went on to explain that the energy crisis will lead to increased production costs (leading to therefore increased inflation) when companies use their own generators to power their plants. The cost of those emergency measures is far higher than electricity from the grid.

Bear in mind that Lavagna is a potential candidate for president opposed to Kirchner, but he does not have a reputation for fudging the facts. Whether the crisis is real or potential, it generally accepted that it is caused by the lack of development of power sources over the past several years.