The challenge of liberalisation of the Argentine Wholesale Electricity Market in 2025

A risk governance process

Abstract

This article addresses the “normalization” of the Argentine Wholesale Electricity Market (MEM) through the lens of institutional economics and public policy. The reform is conceptually interpreted as an exercise in “regulation through deregulation”, where the State transitions from its historical role as a direct planner and provider to a meta-regulator that designs the framework for competition. The fundamental objective is to reconfigure the sector under the principles of the Liberal Regulatory State established by Law 24.065 of 1992. The central focus of the research lies in risk governance as the structural axis of the new regulatory matrix. This is settled through key instruments such as the obligation for distributors to contract 75% of their demand in the Forward Market (MAT) and the introduction of the Adapted Marginal Rent (RMA) for generators. These mechanisms replace administrative price control with a new architecture for private management of market exposure. The study concludes that the success or failure of this institutional engineering critically depends on the State’s capacity to manage the materialization of the transferred risks. Three systemic vulnerabilities are identified that condition the reform’s sustainability: macroeconomic volatility (inflation and exchange rate), the challenge of social legitimacy in the face of inevi table tariff increases for final users, and the necessity of building robust institutional credibility to ensure the predictability of rules in the long term.