Click Here to Go Directly to the Story
Register/Subscribe
Home


 
 


U.S. EDITION
Full Table of Contents
Cover Story
Up Front
Readers Report
Technology & You
Letter From Brussels
Books
Economic Viewpoint
Economic Trends
Business Outlook
News: Analysis & Commentary

In Business This Week
Washington Outlook
International Business
International Outlook
Developments to Watch
People
Management
Government
The Corporation
Economics

Legal Affairs
BusinessWeek Investor
The Barker Portfolio
Inside Wall Street
Figures of the Week
Editorials


INTERNATIONAL EDITIONS
International -- Editor's Memo
International -- Spotlight on Argentina
International -- Readers Report
International -- Asian Business
International -- European Business
International -- Latin America
International -- Finance
International -- Int'l Figures of the Week
International -- Editorials




MARCH 26, 2001

INTERNATIONAL -- SPOTLIGHT ON ARGENTINA

These Windmills Spin Pure Gold...But Will It Reach the Heartland?

 
  STORY TOOLS
Printer-Friendly Version
E-Mail This Story

Related Items Map: Argentina

In his five-year, around-the-world voyage on the HMS Beagle, few places made as strong an impression on Charles Darwin as the plains of Patagonia. Upon his return to England in 1836, the naturalist confessed to having been plagued by a recurring image of "piercingly cold" winds sweeping across "wretched" lands. Almost two centuries later, Patagonia's windswept, empty landscape has hardly changed--a testament to how hard life here is.

But now, these forces of nature may turn into a gold mine. In February, on treeless wastes outside the village of Pico Truncado, population 12,000, Germany's No. 1 windmill maker, Enercon, installed two sleek, mammoth turbines that supply 1.2 megawatts of energy, almost half Pico Truncado's needs. Funding for the $1.5 million project came from Enercon and a German government program, appropriately named El Dorado, that supports wind projects in Latin America. "For those of us who've suffered a lifetime battling the wind, it's the best revenge yet," says Eduardo Campano, Pico Truncado's public services chief.

And the revenge may get a lot sweeter. Sky-high gasoline prices and endless service-station lines in Europe, power shortages in California, and the development of larger, more sophisticated turbines are giving a lift to wind power by eroding the huge cost gap with conventional forms of energy. Around the world, wind's generating capacity grew 26% last year, representing annual sales of close to $4 billion, according to the American Wind Energy Assn.

COLD BLASTS. If the trend holds, Patagonia could become the Mideast of the wind-energy world. That's because nowhere else on earth boasts such an abundance of strong winds. At average speeds of 40 kilometers per hour, airstreams in Patagonia can generate three times as much energy as the 27 kph gusts in areas such as the North Atlantic or Baltic Sea, because total power generated is a function of wind speed cubed. At times, the cold blasts rushing down the Andes hit much harder. In Pico Truncado, Enercon waited more than a week before a predawn calm allowed time for a hefty crane to mount the 21.5-meter blades on its turbines.

Such hazards aren't discouraging the world's turbine powerhouses. In December, Spanish energy giant Endesa and industrial conglomerate Elecnor formed a joint venture, Energias Argentinas, to develop 3,000 Mw of wind capacity in Patagonia over the next 10 years, the equivalent of 21% of the country's current consumption. The first 280 Mw will be installed by 2002 as part of an initial $235 million investment.

Already, the skyline near Patagonia's largest city, Comodoro Rivadavia, is getting a face-lift. In 1999, the city's electrical cooperative settled on an $8.3 million bid from Spain's Gamesa Eolica--one of eight offers from international companies--to add 11.2 Mw of capacity to its current farm of 10 windmills. When the 16 new turbines go on line in June, they'll satisfy almost 18% of the energy needs of Comodoro's 140,000 residents. Says Eduardo Schmidt, general manager: "Manufacturers are eager to invest here because Patagonia's strong winds are a showcase for their equipment." Darwin might have called it survival of the windiest.

Of course, living in a wind tunnel affords no protection against tunnel vision. The cash-strapped Argentine government has been slow to build links from Patagonia to the national power grid. As a result, windmills in Pico Truncado have simply been shut down in moments of extreme turbulence, squandering a bounty of energy because the isolated grids they feed into can't handle the surge. Plans exist to extend the grid from the southern edge of the pampas, 375 km southward. Construction will begin in six months and should be finished in two years. But that'll still leave corridors around Pico Truncado, where the wind is strongest, some 600 km short. "Without a high-tension link, our activity in Patagonia will be limited to a cute little experiment," says Juan Dueñas, manager of Gamesa's local unit.

There's also concern that greedy provinces or the federal government could impose taxes on "their" wind, much as they reap royalties from the extraction of nonrenewable resources such as oil. If that happens, the half-dozen wind farms now in Patagonia might never mushroom. Instead, industry executives and environmental groups say Argentina should follow the example of developed countries and get serious about providing clean energy producers with incentives such as subsidies and guaranteed access to the wholesale energy market--and then start counting their blessings as the storm winds blow.



By Joshua Goodman in Pico Truncado

Edited by Harry Maurer

Get BusinessWeek directly on your desktop with our RSS feeds.XML

Add BusinessWeek news to your Web site with our headline feed.

Click to buy an e-print or reprint of a BusinessWeek or BusinessWeek Online story or video.

To subscribe online to BusinessWeek magazine, please click here.

Learn more, go to the BusinessWeekOnline home page

Back to Top

MARCH
TODAY'S MOST POPULAR STORIES

  1. Oracle's Sun Deal: Oracle May Need to Loosen Its Grip
  2. The Cars You Won't See in the U.S.
  3. Stocks: Five Market Mistakes to Avoid
  4. Picks of the Week: Berkshire, Starbucks, Cisco, MasterCard
  5. Why This Real Estate Bust Is Different

Get Free RSS Feed >>
  MARKET INFO

Portfolio Service Update

Stock Lookup

Enter name or ticker



Media Kit | Special Sections | MarketPlace | Knowledge Centers
McGraw-Hill Cos.