The Monopolistic and Oligopolistic Burden in the New Energy Competition

State monopolies, competition, data centers and technological innovation reveal new challenges for energy infrastructure and economic development across the Río de la Plata.

The Monopolistic and Oligopolistic Burden
Anchors to Competition, the Energy Dispute and the Asymmetric Challenge of the “China Zorrilla”
By Dr. Nelson Jorge Mosco Castellano

The analysis of how concentrated structures hinder economic development extends beyond traditional monopolies and regulatory constraints. Today, it confronts new challenges of global and technological scale: the pressure placed on the energy matrix by data centers and the disruptive innovations emerging from the private sector that are reshaping electricity markets across the region.
Joseph Schumpeter, although best known for his concept of “creative destruction,” warned about the dangers of static business structures. In his work, monopolies or large temporary oligopolies may foster innovation, but once they become “obsolete” or institutionalized, they suppress the drive of new entrepreneurs and obstruct sustained long-term economic growth.
Daron Acemoglu and James A. Robinson, in their work on extractive and inclusive institutions (Why Nations Fail), argue that economic elites operating through monopolies and oligopolies jealously protect their privileges by creating institutional barriers to entry.
This destroys incentives for broad-based investment across society and slows long-term economic growth.
When incorporating the institutional perspective and recent technical management experience in Uruguay, the case of engineer Alejandro Stipanicic (former president of ANCAP) provides a key example of how state monopolistic anchors operate and of the challenges involved in dismantling deeply rooted oligopolistic or monopolistic structures.
Stipanicic was tasked with managing and bringing greater transparency to one of Uruguay’s most emblematic monopolies: oil refining and the importation of crude oil and fuels. From a liberal and technically oriented management perspective, his administration exposed the intrinsic contradictions of such structures.
Stipanicic repeatedly stated in public that ANCAP’s monopoly had historically been used—and particularly during periods of international price volatility—as a fiscal shock absorber or as a mechanism to artificially contain increases in consumer prices (“ANCAP’s back”), sacrificing its own financial margins to avoid transferring the real costs to the broader economy.
He warned about the institutional contradiction under which state monopolies operate, where the absence of genuine competition discourages efficiency-driven gains and instead transfers the hidden costs of structural inefficiency to the productive economy as a whole.
One of the most significant contributions of his administration was actively promoting the end of specific ANCAP monopolies in logistical areas critical to the country’s competitiveness.
Stipanicic proposed removing outdated regulations that prevented international ships and commercial aircraft from freely refueling. He argued, with technical clarity, that the monopoly over fuel oil and jet fuel supply limited the operational competitiveness of the Port of Montevideo and the country’s air terminals, reducing Uruguay’s attractiveness as a logistics hub.
Following the implementation of regulatory decrees that opened these market segments to private competition, it became evident that dismantling peripheral “monopolistic anchors” directly improves international integration and reduces systemic costs.
From a perspective closely aligned with institutional economics, Stipanicic summarized one of the fundamental problems of state monopolies in Uruguay: the absence of a real and measurable owner. Since public enterprises are accountable to changing political cycles every five years rather than to shareholders exposed to market risk, they tend to consolidate bureaucratic inertia and corporate barriers that ultimately become genuine anchors on long-term growth.
Data Centers and the Structural Limit on New Investment
The rapid arrival of large-scale technological infrastructure and artificial intelligence projects requires enormous volumes of electricity and advanced connectivity. However, in economies characterized by state monopolies and centralized energy systems, the demand generated by these large data centers has begun to create a systemic bottleneck.
The priority assigned to these projects—or the concern over possible electricity shortages resulting from the enormous power consumption of data centers—creates a regulatory dilemma. State-owned energy companies, operating under monopolistic structures, lack the market agility required to expand generation capacity at the pace demanded by the global digital economy. Political distortions affect investment planning according to demand, gradually fostering generation oligopolies as a consequence of their own productive inefficiencies.
When available capacity is restricted to protect domestic consumption or prioritize oversized contracts, medium-sized and emerging businesses face barriers to access, paying higher marginal costs or confronting insurmountable bureaucratic delays.
Rigid, state-controlled infrastructure not only slows productive diversification and discourages technological investment, but also prevents effective policy coordination—even among public entities—to avoid cyclical shortages and meet growing demand.
The “China Zorrilla” Phenomenon: Private Innovation and Binational Energy Asymmetry
On the other side of the equation, the emergence of next-generation maritime transportation—illustrated by the China Zorrilla, the large electric ferry developed by Buquebus—demonstrates how private initiative is challenging traditional energy paradigms across the Río de la Plata.
This vessel operates using massive lithium-ion battery banks that require high-capacity substations at port terminals, on the order of 15 MW per port.
The charging asymmetry (Uruguay vs. Argentina): Although the vessel operates with 100% electric propulsion and produces zero direct emissions while sailing, its actual environmental profile depends on where it connects to the electrical grid and on the fact that renewable energy systems also require fossil fuels to stabilize intermittent generation.
In Uruguay, charging is supplied primarily through an integrated and diversified energy matrix based largely on renewable sources (through agreements with UTE), consuming an amount of electricity comparable to the entire city of Colonia.
In Argentina, by contrast, the electricity supply infrastructure (managed in the metropolitan area through networks such as Edesur) relies on an energy matrix where current electricity generation still depends significantly on fossil fuels (natural gas and related sources), highlighting the structural limitations of achieving a fully clean energy transition without relying on conventional generation or compensatory mechanisms.
This contrast demonstrates that while private innovation drives cutting-edge global technologies, its ecological and operational efficiency ultimately collides with the structural restrictions, regulatory frameworks and energy market differences existing on both sides of the river.

Monopolies and institutions
Energy infrastructure
Competition and innovation

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