Country Summary Sheet Guatemala

Transcription

1 Country Summary Sheet Guatemala Executive Summary Guatemala provides equal treatment for foreign investors, and incentives for the development of renewable energy projects. Because of the steady energy demand growth of near 5% per year, Guatemala foresees the need to add an additional 2,000 MW to its current 2,175 MW capacity (2010). Additionally, the new SIEPAC (Central American Electrical Interconnection System) line, which extends from Guatemala to Panama and is expected to commence operation in 2012, will greatly facilitate electrical trade. The Mexico-Guatemala interconnection line has been allowing energy imports from Mexico since early Hydro sources are currently responsible for 45% of the energy supply, and this is expected to grow significantly in the next decade. Guatemala possesses a technically usable hydro potential of about 5,000 MW, of which less than 15% is currently being utilized. Some of the challenges currently faced by hydro developers in Guatemala include widespread corruption and deficient infrastructure. Source: CIA The World Factbook Economic Outlook and Investment Climate Since the end of the 36 year civil war in Guatemala in 1996, the government has been pursuing economic stabilization, and even though it has achieved a positive foreign investment climate through several reforms to its laws, its poor infrastructure, corruption and lack of skilled workers continue to be an issue for foreign investors. Please refer to Export Development Canada Guatemala Country Overview: CIA factbook- Guatemala: January, 2012

2 Electrical Market dynamics Electricity Generation by fuel: Electricity Production 2010: Source: AMM statistics Report 2010 Source: AMM statistics Report 2010 Historical Annual Supply and Demand ( ): Source: AMM statistics Report January, 2012

3 Energy Balance Net importer [ ] Net exporter [X] Balanced [ ] Generation (2010) = 8,276 GWh Consumption (2010) = 7,848 GWh Exports (2010) = 132 GWh Imports (2010) = 362 GWh Average SPOT Price 2010 = $ US/MWh *Generation and consumption differences are due to transmission and distribution losses. Source: AMM Statistics Report 2010 Future Electricity supply and Demand The graph presented below was obtained from the Santa Anita Business Plan Presentation, which was prepared in It illustrates the real energy demand (prior to 2007) and projected energy demand (2007 to 2015). As can be seen in the graph, energy demand is expected to grow at a steady rate of approximately 5% per year. The SIEPAC line, which is scheduled to be completed in 2012, will aid in the consolidation of the regional Electrical Market (MER) and increase the security of supply. This is likely to reduce transmission costs and lower electricity costs in general throughout Central America by facilitating a shift towards renewable resources. This will allow for the convergence of supply and demand of energy throughout the area. 3 January, 2012

4 Legal and Regulatory Framework of Electrical Sector The following graph summarizes the different agencies involved in the energy sector in Guatemala. The role of each of these agencies in the development of renewable power projects is explained in detail below. Ministry of Energy and Mines (MEM- Ministerio de Energia y Minas): Government organization responsible for the application and enforcement of the General Law of Electricity, as well as all programs and policies related to the electrical sub-sector. Also responsible for the promotion and authorization of renewable energy projects and for the authorization and provision of transport and distribution services for all plants. National Electrical Energy Commission (CNEE- Comision Nacional de Energia Electrica): Technical division of the MEM, which ensures compliance with all regulations pertaining to the electrical subsector and participating economic agents. Wholesale Market Administrator (AMM- Administrador del Mercado Mayorista) : Nonprofit private entity that coordinates transactions among participants of the wholesale market. Renewable Power Sector The National Electrification institute of Guatemala created a study in 2005, in which it identified the country s renewable potential. Data was obtained for hydro, geothermal and wind power, with a total capacity of 14,256 MW amongst the three, of which only 4.5% was utilized at the time. According to the Guatemala s Energy Expansion Plan ( ) developed by the three regulatory agencies mentioned in the previous section, an additional 2,705MW must be added to the current 1,941MW capacity by the year 2022, and the energy supply form hydro sources should go up from 36.1% in 2009 to 53% in January, 2012

5 Policies & Measures towards the Renewable & Small Hydro In 1996, the General Law of Electricity was formed, establishing the freedom to produce electricity. The law allows the free production, as well as private transportation and distribution of electricity, without authorization from the state. Authorization is required only if the use of goods from the public domain is involved. The prices for the use of electrical services are subject to authorization as well. The transfer of energy between generators, traders, importers and exporters, which result from the operation of a wholesale market, are subject to the terms and conditions of the law. In 2003, the Congress approved a law of incentives to develop renewable energy projects which declares the urgent need to ensure their rational development, instructing the Ministry of Energy and Mines (MEM) to inventory these resources and award incentives (exemptions from customs tariff and value-added tax during the construction stage, and income tax during the first ten years of commercial operation). In addition, with the purpose of promoting renewable resources, the government has created the Information and Promotion of Renewable Resources Center and the program of Energy Project Promotion. National Hydro Potential and Regional Conditions According to the MEM, the gross theoretical potential of the rivers in Guatemala has been estimated to be 10,900 MW. The technically usable potential is close to 5,000 MW. From this, only 13.5% is currently being utilized. Generation from hydroelectric plants in 2009 totaled 2,893 GWh and 3,767 GWh in The table below summarizes the stages of different hydroelectric projects that have been identified in Guatemala, along with their status and capacity: Status In Operation (Government- owned) (Privately- held) Authorized Granted License - Construction Explanation Capacity Percentage of Technical (MW) Potential (5,784 MW) Fully Licensed % (215) (371) % Applied for Awaiting License % Authorization Denied Authorization % Other Conflicting Reports % Identified & under study Identified & Awaiting Development Temp. 1yr authorization Available with a study- not staked % % Not identified- Remaining Potential Available for greenfield projects Source: AGREGAR % 5 January, 2012

6 The two tables below were obtained from the Guatemala Energy Expansion Plan, and provide a list of the hydroelectric plants currently operating in Guatemala, and those which have applied for authorization and are awaiting approval. From the Candidate Hydro Plants table, only Hidro Zacapa and Hidro QuicheII have already received authorization and begun the construction process Hidro Quiche I completed its construction in Source: Expansion Plan Hydro Plants in Operation Candidate Hydro Plants 6 January, 2012

7 Guatemala has three hydrographic slopes: Pacific, Atlantic and Gulf of Mexico, with a total of 38 basins. A map illustrating Guatemala s hydrographic basins is provided in the following page, followed by a map of the current Guatemala transmission system. Source: MEM Invest in Renewable Resources in Guatemala Source: AMM statistics Report January, 2012

8 Small Hydro Permitting Process and Timeline The following flowchart outlines the typical hydro licensing process in Guatemala: Project Identified Prefeasibility Study includes site visit, plant layout and construction and production estimates Project attractive? Project Staked by claiming Temporary Water Rights at Ministry of Mines and Energy Feasibility Study includes detailed hydrology, geology, design and construction cost estimates Project feasible? Environmental Impact Study Approved by Ministry of the Environment Grid Connection Study Approved by National Electrical Energy Commission Project Registered at Ministry of Mines and Energy (simpler staking for < 5 MW) 50-year Water Rights Claimed at Ministry of Mines and Energy (detailed staking for >5 MW) If Dam: Safety Study Approved by National Electrical Energy Commission Construction & Commissioning 8 January, 2012

9 TYPICAL FLOWCHART FOR THE APPLICATION OF PROJECTS OVER 5 MW - GUATEMALA Prefeasibility study 1.5 months Necessary for Project layout to be presented in Environmental EIS and Electric impact study. Beginning of application Temporary license (MEM) 3 months for approval Environmental EIS (MARN) 2 months to prepare 3 months for approval Electric impact study (CNEE) 1.5 months to prepare 3 months for approval This is not necessary to apply for in any case, it can be done parallel to the EIS and electric impact study. Water use concession (MEM) 1 month to prepare 3 months for approval Once this has been obtained, the construction permit application may be submitted. Conclusion (10.5 months) 9 January, 2012