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Argentina's state-run energy company Enarsa this week opened bidding for multiple renewable-energy projects whose combined output will total 1 gigawatt.

The projects, which aim to produce cheaper energy and reduce Argentina's reliance on non-renewable sources of power, call for the building of new wind, solar, geothermic, and biomass plants. The government expects 500 megawatts of the new power to be generated by wind turbines.

Government officials hope the new projects, which each offer 15-year contracts, will lead companies to invest around $2.5 billion in the sector.

The government wants to boost the percentage of power generated with renewable energy to 8% by 2016. Green energy now accounts for about 1% of locally generated power.

Energy Secretary Daniel Cameron said this week that the government is committed to promoting the use of Argentine components in the construction of power plants.

"We're taking this new step to improve the quality of our lives, protect the environment, create jobs and increase national production," Cameron said.

However, it's not clear how the requirement that companies use Argentine-made components might affect bidding or the construction of power plants.

Energy companies and even government officials have said repeatedly that in the past such requirements have stifled plans to build renewable energy generators. Among other things, one problem has been that local companies lack the capacity to mass-produce such components.

A spokesman for Enarsa was unavailable to comment.

In 2005, the government outlined a $300 million plan to produce more than 300MW at various wind farms across the country - whose most unpopulated areas in Patagonia and elsewhere often receive constant, howling winds.

But most of those grandiose projects have so far gone nowhere. Despite growing interest worldwide in renewable power, volatile oil prices, and a growing shortfall in its domestic output of natural gas and crude oil, Argentina has only managed to marginally expand its wind power capacity - from 10MW a decade ago to 29MW.

According to local media reports, companies that have expressed interest in the new projects include the U.S.-based AES Corp. (AES), the Danish wind power giant Vestas Wind Systems (VWS.KO), Spain's Endesa SA (ELE.MC), Argentina's Pampa Energia (PAMP), the Techint Group (TCNT.YY), Brazil's Petroleo Brasileiro (PBR), or Petrobras, and Germany's SoWiTec, among others.

Bids will be opened on Aug. 26.

-By Taos Turner, Dow Jones Newswires; 5411-4103-6728; taos.turner@dowjones.com