Global warming may aggravate Argentine energy woes

BUENOS AIRES (Reuters) - The effects of global warming could worsen Argentina's energy crunch in the coming years as water levels fall at some dams, and renewable options are costly and scarce, government officials said on Monday.

Less precipitation has been falling in some areas along the Andes mountain range in Argentina, lowering water levels at key hydroelectric plants in the Comahue region of Patagonia, for example.

This phenomenon could continue with average temperatures expected to rise by one degree during the 2020-2040 period, according to a study on climate change that Argentina will submit to the United Nations.

But with little technology transferred from developed nations and with energy prices largely frozen in the domestic market, few companies are investing in renewable energy sources, officials said.

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"Humanity is looking downward for energy and it should be looking upward," Environment Secretary Romina Picolotti said, referring to the focus on underground reserves of oil and natural gas rather than on solar and wind power.

"We have to improve the technology, make it less expensive and promote it ... but we also need for developed countries to transfer this technology once and for all," she said.

Argentina's power system is comparatively clean with about 50 percent of electricity coming from hydroelectric plants, 40 percent from combined-cycle plants that run mostly on natural gas, and 8 percent from nuclear reactors.

But Latin America's No. 3 economy has expanded by more than 8 percent a year in the last five years and demand has outpaced investment in the energy sector, leading to shortages.

Argentina's natural gas reserves are dwindling and the country has had to import dirtier and more costly fuel oil and diesel to run its thermoelectric plants, while also purchasing electricity and natural gas from abroad.

Cleaner technologies tend to be expensive and low energy prices in Argentina may not stimulate the needed investment, said Nazareno Castillo Marin, director of Argentina's Climate Change office.

"There are few incentives (to invest) ... but opportunities are starting to appear in this context of limited supplies," Castillo said.

One option is for companies to try to obtain carbon credits under the Kyoto Protocol, which commits most industrialized nations to cutting carbon dioxide emissions.

The protocol allows companies and investors in richer countries to invest in and profit from cuts in greenhouse-gas emissions in poorer nations.

But Picolotti said although this mechanism is welcome, it is not the solution.

Scientists say global warming is stoked by human use of fossil fuels, such as crude oil, which contributes to icebergs melting and sea levels rising at the earth's poles.