The recently appointed Minister of Energy wants to show immediate changes to the Ministry he leads. His plans for the Argentine Atomic Energy Commission.
July 2, 2018
Generating foreign trust in order to attract greater investment and making a deep reform to the Argentine nuclear policy are the two pillars on which the newly appointed Minister of Energy Javier Iguacel has started working with a view to a particular objective: Showing immediate changes and improving the image of the complex Ministry he leads after former Minister Juan José Aranguren left office.
In the last four days Iguacel traveled to Washington, met the full staff of the Ministry of Energy and submitted his action plan with concrete measures to President Mauricio Macri.
The purpose of Iguacel’s last-minute trip to the US was to meet Rick Perry, his peer in Trump’s Administration, and show American investors in the oil industry that the Argentine energy policy will remain unchanged after Aranguren left office.
On the contrary, Iguacel mentioned that he will deepen the investment promotion plan, move forward with the long term investment programs of Vaca Muerta and made it clear that the number of changes to the Argentine tariff schedule will be reduced to minimum in 2019.
As sources of the Argentine Government have indicated to Infobae, Iguacel’s meeting with Perry was "very positive" and left "much expectation into the future". Iguacel traveled to Washington as advised by the Ambassador of Argentina to the United States, Fernando Oris de Roa, with the purpose of clarifying the doubts that arose after Aranguren ceased to be the Minister of Energy.
In addition, Iguacel met in Washington with Rafael Grossi, Ambassador to Viena and member of the Treaty on the Non-Proliferation of Nuclear Weapons Organization, with whom he shared part of his intended reform plan for the nuclear energy sector in Argentina.
"Argentina must solve the future of its nuclear plants and its nuclear policy", an officer who met Iguacel in the US mentioned to Infobae. There, the Minister of Energy shared some of the ideas he intends to carry out with the Deputy Secretary of Nuclear Energy, Julián Gadano.
The plan proposed by Gadano to Iguacel –and supported by the Minister of Energy- includes a structural reform of the nuclear energy policy in order to focus on research, development and innovation, which was not so much highlighted by Aranguren.
This way, the Argentine Atomic Energy Commission (CNEA, in Spanish) is expected to develop an innovation program as the one in place in 1960s, 1970s and 1980s, mainly based on the fact that CNEA’s current structure will be modified in order to become "lighter, more flexible and able to quickly change its work subjects, which is essential in science and technology", as detailed by a Government officer.
Iguacel would also support Gadano’s idea of turning CNEA into an entity more of a private type but State-owned, intending to obtain a subsidy to finance the structure and the remaining funds would be allocated to each particular project.
The idea is that the Argentine nuclear energy policy includes a contribution from the National Government but also from the Provinces, Municipalities or the private sector.
In addition, the newly appointed Minister of Energy considers the possibility of changing CNEA’s human resources structure. It is currently not very flexible, with a large staff that is paid little. To such end, they will discuss its staff’s internal skills. Iguacel would intend to turn CNEA into a self-sufficient entity so that its own authorities may have a certain amount of money and freely decide on how many people they want to keep and how much they want to pay them. The incentives to make efficient and responsible decisions would be included in such resources.
As stated by reliable sources from the Ministry of Energy, the idea is that CNEA ceases to be an exclusively nuclear entity. "It must be the public entity focused on science and technology applied to energy. Argentina has the chance of becoming one of the main players of the energy revolution of the XXI century, and CNEA must be part of it ".
The intention of this deep reform is that CNEA’s authorities are empowered within the agency, and, at the same time, it increases its responsibility towards the Government. Iguacel and Gadano consider the possibility of drastically reducing CNEA’s management structure in order for its authorities to have greater decision-making power regarding the handling of funds and creating a Board of Directors whose members are appointed by the Government.
In line with this, they are analyzing the possibility of focusing the nuclear energy policy on investment and development in order to stop diverting attention on technologically amortized industrial plants and activities. Large projects could be transferred to State-owned companies or even to private investment. "Public funds must be allocated to innovation and the technology frontier. They must not compete with private investment", an officer close to Iguacel explained to Infobae.
Regarding Nucleoeléctrica Argentina S.A (NASA), a power generation company, with 79% of its shares owned by the State, and which operates the nuclear plants, the intention of the newly-appointed Ministry Iguacel would be to focus again on electric power generation.
Thus, authorities of the Ministry of Energy highlight that NASA does not have to conduct engineering activities as other companies are doing it much better, such as INVAP. In line with this, during 2017 they worked on a sustainable tariff for NASA which acknowledges the nature of nuclear generation. Now they consider that with such tariff it is possible to finance the sector’s investment.
Therefore, Iguacel’s new plans provide that NASA or CNEA will no longer depend on the Argentine Treasury, and they are working on generating a legal framework towards this end.
Last, the new Ministry of Energy’s administration is considering the idea of carrying out a substantial technological project with CAREM –a type of reactor ideal for supply purposes- given that nuclear generation faces two important problems: a great initial investment and long construction terms. The Government considers that if this does not change, the sector will not have a future.
Small modular reactors such as CAREM are the key to such problems: less initial investment and shorter construction terms.
Furthermore, Iguacel is analyzing the possibility to revise the nuclear sector’s resources. In 2018, approx. 16,500 million Argentine pesos will be allocated to the sector (not including 11,000 million pesos received by NASA for tariffs, or the resources arising from exports). These are resources only from the Argentine Treasury. In light of this, the question is: "How can we return better in achievements what we receive?"
President Macri has decided to postpone the construction project of a nuclear plant with financing from China on the basis of cost reduction. Now Iguacel will face the complex task of redefining the Argentine energy policy with less costs and a greater focus on generating its own resources.
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