Transcript Diapositiva 1

The Southern Cone
of South America
Experiences and
Recent evolution
Juan Luchilo – CAMMESA
APEx Conference
October 2004
Leipzig - Germany
South America - Experiences
and Recent evolution
Global Information – Markets and
Systems
Energy integration – gas &
electricity
Argentina Crisis – Impact
Expectations - Concerns
Deregulation of the Electric
Sector
BOLIVIA 1996
BRAZIL 1998
PARAGUAY ?
CHILE 1982
URUGUAY 200?
ARGENTINA 1992
Regional Market - Basic Data
Regional Market, 6 countries:
(Argentina, Bolivia, Brazil, Chile,
Paraguay, Uruguay)
Population: about 250 M
Installed Capacity:  125 TW
Annual Energy Consumption:  500
TWh
Energy Consumption
Uruguay
1.4%
Bolivia
0.7%
Argentina
18.5%
Paraguay
0.5%
Chile
8.4%
Brazil
73%
Integration - Situation
Different resources in each country (Brazil,
Uruguay, Paraguay mostly hydro; Argentina, Chile,
Bolivia, hydrothermal) and level of deregulation
Long distances between main loads and from
resources to load;
Barriers between countries
natural (mountains, rivers)
political => openness to integrate markets
technical and economical viability=>
distances, electrical issues
Opportunities => complementarity of demand
and hydro availability, gas and electricity
integration
Energy Integration - Evolution
Before 1997 => Integration related with
binational hydro power plants; agreement
between countries
Argentina – Uruguay - Salto Grande (1890 MW)
Brazil – Paraguay – Itaipú (12600 MW)
Argentina – Paraguay - Yacyreta (1800 MW)
Only small gas pipelines linking countries
Energy Integration - Evolution
After 1997=> Integration related with market
opportunities=>
 competitive market, gas availability and
new capacity in Argentina
generation needs at northern Chile
complementarity with Brazil and Uruguay
(firm capacity for dry hydro years)
Bolivia as a major gas player
Electricity or/and Gas?
As well as electricity, gas has also become a
product exchange in the south cone:
Brazil imports from Argentina and Bolivia,
and transform part locally in electricity
Chile imports from Argentina, to fuel its new
generation plants
Uruguay is on the same way soon
Argentina began to import from Bolivia in
2004
There’s a competition whether to transport gas
and transform it afterwards in electricity or to
produce electricity and then transport it through
wires; economic viability is related with volume
requirement and scale
Energy Links – Gas & Electricity
High Loads
Hydro Resources
Gas Resources
Electroducto
Argentina Chile
Gasoducto
Atacama y Norandino
Gasoducto
Gasandes 7-8
Gasoducto del
Pacífico 1.5-9
Gasoducto
Bolivia-Brasil 30
Electricity link
Argentina-Brazil
Electricity link
Argentina-Paraguay
Electricity link
Argentina-Uruguay
Impacts (Argentina – Brazil)
 Resources Optimization
Some
Benefits
 Share reserves (seasonal,
hourly)
 Increase reliability, quality
It requires adequate technical coordination
between the interconnected systems
Macroeconomic Changes
 Austral summer 2002 => devaluation and
political crisis
 Since July 2002 => conditions begin to
stabilize; relative normalization of the
behaviour of economy
 2003/4 => strong economy recovery
4
Evolution of exchange rate=>
3
$/u$s
2.5
2
1.5
1
0.5
Jul-04
Abr-04
Ene-04
Oct-03
Jun-03
Mar-03
Dic-02
Sep-02
Jun-02
Mar-02
Dic-01
Sep-01
Jun-01
Mar-01
0
Dic-00
u$s/MWh
Increase of industrial demand due
to greater competitiveness to
export and import substitution
Jan02-oct04
Exchange rate => 200%
Inflation => about 50%
3.5
Electricity Sector Scenario
 Tariffs
to end consumers => social
impossibility to increase tariffs due to
economic crisis and people impoverishment
 Pesification of natural gas, energy and
capacity prices on the WEM
 Increase of imported fuel and maintenance
costs
 Uncertainty related with exchange rate
evolution and expected performance of the
generation units
 After 2003 =>increase in demand (+8%)
% GDP vs Demand
Variación % PBI anual vs. Demanda
15%
10%
5%
0%
1993
1994
1995
1996
1997
1998
1999
2000
2001
-5%
-10%
-15%
PBI
Demanda
2002
2003
2004
% GDP vs Demand
Variation - Annual Demand vs. GDP
15%
2003 vs 2002
% Annual Demand
10%
5%
Estimated 2004
vs 2003
0%
-15%
-10%
-5%
0%
-5%
2002 vs 2001 =>
-2% var Dem para
-11 % var GDP
-10%
-15%
% GDP annual
5%
10%
Annual Peak Demand
MW
Ev de la potencia máxima registrada anual
17000
16000
EXP = 2200 MW
2200
15000
1050
14000
2200
1050 2200
13000
12000
Local = 5700 MW
11000
10000
11243 11776
9000
8000
9035 9325
12269 12730
1375414061 13481
14359 14732
10104 10213
7000
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
Installed Generation Capacity
MW
Potencia Instalada MEM
25,000
HI
CC
TG
TV
NU
20,000
15,000
10,000
5,000
0
1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004
WEM capacity:
1992 = 13267 MW
2004 = 23284 MW  ~70% Increase – Gen => 9700 MW
Electricity Sector Scenario
 This scenario led to severe difficulties, as
regards:
 Lack of gas availability for power plants
 Unusual alternative fuels requirement =>
increase of operative costs
 Inability to cover the energy costs with the
defined tariffs
 Risk of energy crisis in 2004 => due mainly
to fuel availability combined with a hydro
dry year
Crisis - Decisions
Some decisions
 Additional payments for generators that commit
their availability with natural gas
 Agreement with Brazil to import energy during
winter
 Agreement with Venezuela to import a large
amount of Fuel Oil to replace the lack of natural
gas
 Cuts on gas exports (Chile) if needed in order to
avoid restrictions to the local demand
 Gas imports from Bolivia
 Gradual increases in gas prices (from 0.4 to 1.0 u$s/MBtu
(may 04-jul05))
 Slight increase in WEM tariffs only to industrial
consumers; no increases to residential consumers
Results -Argentina – Brazil link
Exchanges Brazil - Argentina - MW avg
1,200
Brazil crisis
1,000
800
EXP
IMP
600
Argentina
crisis
400
200
-
0
-200e-0
En
-400
-600
0
01
02
03
04
00
01
01
02
02
03
03
04
-0
y
y
y
y
y
p
e
p
e
p
e
p
e
a
a
a
a
a
Se
En
Se
En
Se
En
Se
En
M
M
M
M
M
0
Dic-04
Jul-04
Feb-04
Sep-03
Abr-03
Nov-02
Jun-02
Ene-02
Ago-01
Mar-01
Oct-00
May-00
rate $ / u$s
Dic-99
60
Jul-99
Monomial $
Monomial u$s
Feb-99
70
Sep-98
Abr-98
Nov-97
Jun-97
Ene-97
Ago-96
Mar-96
Oct-95
May-95
Dic-94
Jul-94
Feb-94
Sep-93
Abr-93
Nov-92
Jun-92
Ene-92
Ago-91
u$s/MWh
ENERGY PRICE EVOLUTION
90
4
80
3.5
3
2.5
50
2
40
30
1.5
20
1
10
0.5
0
Energy Price Evolution
$/MWh
Wem Average Monomial Prices
70.0
63.0
60.0
50.0
54.0
48.8
40.0
38.7
35.7
31.8
30.0
29.7
28.6
25.3
24.4
26.1
28.9
27.6
23.4
20.0
10.0
10.8
12.9
2002
2003
18.0
21.0
2004
2005
0.0
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
Competitiveness of the market and efficiency of generation units provoked a
fall in spot prices of about 50%  48.8 $/MWh1992 to 23.3$/MWh2002; increase
in M&O costs and use of liquid fuel and gas costs => 54.0 $/MWh2004
Results
 Winter was managed, operating the system in




fairly good supply conditions ….. but winter was
mild and hydrology wasn’t so bad
Operation costs soared due to increase of natural
gas price and usage of liquid fuel and imports
Stabilization fund exhausted since jul-03; debt of
the fund with generators of about 1200 M$ (6
months of payment).
Operative inefficiency due to unavailability of
natural gas
Due to Argentina’s role in the region, the
situation affected the operation in Chile and
Uruguay
generating
stress
between
governments in the peak of the crisis (march-may)
Expectations - Concerns
 Macroeconomic issues (like devaluation) affect



parties => requires dynamic adaptation to maintain
in the short term operability and in long term
commercial viability
Increase of tariffs required to gradually normalize
situation. The whole situation seems very difficult to
handle politically
Demand increase along with default of the
stabilization fund may lead to a significant increase
of the deficit of supply risk
Medium and long term viability and the lack of new
investments in generation is then one of the major
concerns, until the regulatory framework may be
adapted and political solutions adopted.
Next steps
From CAMMESA’s point of view
 Be flexible enough to implement changes on
rules and keep on running the system and the
Market, in a delicate environment.
 Study and analyse scenarios to identify and
anticipate risks, in order to help in the search
of solutions.
Quality, Technology & Transparency
For an Electrical Market without frontiers
¡Thanks for your attention!
Leipzig, October 2004
Doubts => [email protected] More info => www.cammesa.com.ar