24 biomass is that it is a more expensive energy source. It costs between $1M and $2.5M per MW of installed capacity, while the limit guaranteed under FODER and the World Bank is $500,000 per MW (Ministry of Agriculture, Livestock, and Fisheries, 2013). Furthermore, biomass brings additional value in the form of diversification. The provinces that have primarily invested in this technology are also the ones in the northeast region of Argentina that have limited potential for wind and solar. Cost Analysis When evaluating the viability of a large infrastructure project, it is critical to conduct a cost analysis. First, the short-term costs must be estimated to see if the immediate costs are reasonable. These short-term costs are measured by the total overnight capital cost of installing new electricity production capacity. According to the US EIA (2020b), currently natural gas plants have an overnight cost of approximately $1M per MW. Solar is between $1.05M and $2M. Wind is approximately $1.6M per MW, hydropower is $2.68M per MW, and nuclear is $6M per MW. Even though in the long term, solar and wind farms are better investments, getting the credit at acceptable rates in the near term may be difficult with Argentina’s inflation and history of default. Although in the long term, renewable energy sources are competitive and will quickly be a much better investment, their immediate costs are higher. These costs will continue to decline as economies of scale grow for renewable energy products and the technology improves. With short-term costs evaluated, it is critical to ensure that these large investments will pay off in the long term and that the cost of producing electricity through renewable methods will create more affordable options. Doing so reveals that renewable energy currently is the cheapest option for Argentina without considering environmental externalities, and it is overwhelmingly better when the externalities are included in the accounting. Externalities are impacts that are not included in the direct cost calculations but have impacts for the consumer or the larger economy. Examples of externalities include smog created by a fossil fuel plant, decreased property value near a nuclear plant, and changes in wind patterns below wind turbines. Currently the externality costs of renewables are much less expensive to operate, with natural gas costing between €13.5 and €15.2 per MWh of electricity, depending on carbon capturing, with nuclear costing approximately €7.7 per MWh and solar and wind costing approximately €1.5 per MWh of electricity (Rafaj & Kypreos, 2007). While these costs do not entail the total cost, the externalities can be a sizable portion that, when not considered, certainly change the calculations. These externalities account for anywhere from a marginal amount of the operating cost up to approximately 40% of the total cost of the energy. Ram and colleagues (2018) studied the costs of different energy production methods while including externalities and estimated that currently renewable energy is much less expensive and, forecasting to 2030, that the gap between the cost of renewable energy and nonrenewable options will only grow. Figure 1 shows projections of the generation costs of electricity produced through different sources per MWh at the time of production. The lowest cost of energy for onshore wind was approximately €25 per MWh, whereas offshore and solar methods cost between €75 and €100 per MWh. These costs will continue to decline and are expected to be approximately €25 to €75 per MWh in 2030. At the same time, natural gas using turbines, Argentina’s largest energy source, is projected to grow from €75 to €100 per MWh to €125 to €150 per MWh, including the externalities; and nuclear is expected to stay relatively steady, at approximately €75 per MWh, with an additional cost of externalities of €7.7 per MWh, keeping its cost significantly below that of nonrenewable sources. Furthermore, with the energy production costs becoming much more attractive with renewable energy, that market also can develop into a thriving economic sector for Argentina. The technology will continue to improve and, in turn, push the number of renewable projects to expand, thereby further driving down the development costs (Agora Energiewende, 2017). On a global level, this energy transition can create 36 million jobs by 2050 in comparison to the 19 million
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