Navigating the region s turbulent waters for electric power & the role for innovation and technology

Transcription

1 1 Navigating the region s turbulent waters for electric power & the role for innovation and technology XVIII Annual Latin American Energy Conference Planning the Hemisphere's Energy Future During Economic Crisis May 11-13, 2009 La Jolla, California Darío M. Febré Sr. Strategy Manager GDF SUEZ Energy Latin America

2 Disclaimer 2

3 GDF SUEZ, the new merged group 2007 revenues: 74,3 billion* (2008 revenues: 83,1 billion*) Global workforce: 198,200 employees** E u r o p e 64.2 bn* 181,600 emp. A s i a & P a c i f i c 2.5 bn* 6,000 emp. N o r t h A m e r i c a 4.2 bn* 4,400 emp. A f r i c a 0.7 bn* 3,500 emp. S o u t h A m e r i c a 2.7 bn* 2,700 emp. 3 *Unless indicated otherwise, all financial data are derived from the 2007 and 2008 pro forma financial statements reviewed by the Board of Directors March 4, Regional figures correspond to 2007 revenues ** at June 30,

4 4 GDF SUEZ Energy Latin America 7,853 MW consolidated 2,451 MW more in operation 10,304 MW subtotal 5,361 MW in construction 15,665 MW total Transport Distribution Commercialization LNG Regasification (in construction) Brazil Chile Panama 13 sites in construction 1.Estreito 2. Biomass 3.Areia Branca 4.Pedra do Sal Wind 5.Jirau 6.Motors 7.Coal 8.LNG Regas Mejillones 9.Wind Mills SIC 10. Coal Conversion Mares Hydro 1,086 MW 33 MW 19.8 MW 18 MW 3300MW 100 MW 300 MW 5.5 MMcmd 38 MW (109 MW) 115 MW Rep office in Colombia Peru 12. Gas Turbine MW Costa Rica 13. Wind Mills 49.5 MW

5 5 Content Latin America s turbulence Impact on Energy Markets Technologies and Innovation Final Comments

6 Latam has been going through a period of prosperity. Currently, forecasts are being revised downward. However, volatility is part of our history LATAM GDP Growth (including Mexico) Zoom on last decade (excluding Mexico) Average (p): 2.8 Forecast of World GDP growth (FMI) 6 6 Source: Felipe Larrain, March Apr 8-Oct 8-Nov 9-Jan 09-Mar * 09-Apr 9-Jan 09-Mar * 09-Apr World output to to United States Europe Japan United Kingdom Emerging Countries to to China India Russia Brazil Argentina Source IMF, World Economic Outlook Report - April 2009 * Preliminary figures April 2009

7 Unemployment may increase in next years another challenge for governments 16, , F 12,0 10,0 8,0 6,0 4,0 2,0 0,0 Unemployment Rate Source: EIU March

8 8 Content Latin America s turbulence but turbulence is not exclusive of today Impact on Energy Markets Technologies and Innovation Final Comments

9 MW average MW Average MW Average MW average MW Average MW average MW average GWh MW average GDP% QoQ OYA The impact of crisis in electricity demand is still difficult to be defined. (summer season, elasticity to prices, unavailability's, vacations) % Quarter over Quarter - OYA GDP (1993 based) evolution ARGENTINA 20% 15% 10% 5% 0% -5% -10% Demand (Argentina + Brazil + Chile + Peru + Bolivia + Uruguay + Colombia) Source: CAMMESA - BCRA -15% -20% SIC SING CHILE BRAZIL Source: COES - SINAC Year over Year/Month compared to same month previous year. Energy (MW-average). Red dots Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 indicates March Source: CNE 0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 PERÚ PANAMÁ Source: CND 300 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan Sources: CAMMESA, ONS, CNE, COES, CNDC, DNETN, XM Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 2006 /' /' /'07 Dic '08/'07 URUGUAY Jan '09/'08 Feb '09/'08 Mar '09/'08 1Q '09/'08 Argentina 10.3% 6.3% 2.9% 1.5% -1.0% -2.2% 4.2% 0.7% Bolivia 7.8% 8.8% 7.1% -4.4% 4.2% 5.2% 5.0% 4.8% Brazil 3.9% 4.8% 5.1% -2.0% -2.6% 0.4% 2.2% 0.0% Chile - SIC 5.9% 4.3% -0.4% -0.2% -3.4% -3.5% 1.8% -1.7% Chile - SING 1.8% 5.4% 4.0% 9.6% 8.8% 7.9% 7.1% 8.0% Colombia 4.1% 4.0% 1.9% 0.8% 1.0% 0.3% 4.5% 1.9% Panamá 4.2% 6.1% 3.3% 3.7% 2.7% 3.2% 4.6% 3.5% Perú 7.6% 10.1% 8.1% 2.9% 3.3% 1.8% 1.7% 2.3% Uruguay -0.2% 9.6% -2.6% 5.0% -3.1% 11.4% 17.4% 8.2% / / /2008 Ene '08/ Feb '08/09 Mar '08/09 Argentina 10,3% 6,3% 2,9% -1,0% -2,2% 4,2% Brazil 3,9% 4,8% 5,1% -2,6% 0,4% 2,2% Chile - SIC 5,9% 4,3% -0,4% -3,4% -3,5% ,8% Chile - SING 1,8% 5,4% 4,0% 8,8% 7,9% 7,1% Perú 900 7,6% 10,1% 8,1% 3,3% 1,8% 450 1,7% Bolivia 7,8% 8,8% 7,1% 4,2% 5,2% 5,0% Uruguay 800-0,2% 9,6% -2,6% -3,1% 11,4% ,4% Colombia 4,1% 4,0% 1,9% 1,0% 0,3% 4,5% Panamá 700 4,2% 6,1% 3,3% 2,7% 350 3,2% 4,6% Source: DNETN Source: CNDC Guatemala 6,9% 6,0% 3,5% -2,1% 11,0% -4,9% 300 Rep. 600 Dominicana 9,0% 4,4% 4,2% 0,5% -7,4% -6,2% Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Jan-00 Jan-01 Jan-02 Jan-039Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan Source: XM COLOMBIA BOLIVIA Source: ONS

10 Average USD/MWh Average USD/MWh Average USD/MWh USD/MWh Behavior of prices is determined by nature, fleet, fuel availability, prices, reserve margin May low fuel prices release pressure towards substitution of liquid fuels? BRAZIL Rationing Program June 01 - February 02 N NE S SE/CO Source: CCEE Monthly Avg. Half year Avg. Annual Avg. PANAMA Jan-99 Jan-00 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan Monthly Avg. Half year Avg. Annual Avg. Regulated Price PERU Source: OSINERG 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 USD/MWh & USD/Barrel Average 2008 Jan '08 Jan '09 Feb '08 Feb '09 Mar '08 Mar '09 Brazil Chile - SIC Chile - SING Panama Peru WTI USD/MWh & USD/Barrel Avg 08 Mar 08 Mar 09 Chile - SIC Chile - SING Brazil Panama Peru WTI Source: CND 0 Jan-01 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09 Source: CDEC-SIC; CDEC-SING SIC monthly Avg. SING Monthly Avg. SIC. Regulated Energy Price SING. Regulated Energy Price CHILE 0 Jan-02 Jan-03 Jan-04 Jan-05 Jan-06 Jan-07 Jan-08 Jan-09

11 USD/MWh Volume (MWaverage) 11 Price (BRL/MWh) Pass-through prices remain a challenge for governments (short term cost of energy, long term signal, consumer ability to pay, political constrains) SING Power SING Capacity SIC Power SIC Capacity ,81 139,15 116,43 144,67 141,35 146,65 138,94 130,79 144, , ,1 96,7 85,3 133, ,95 72,83 84,55 74, ,1 22,2 27,2 50,2 28,6 33,5 35,6 37,3 14,4 9,1 11,5 14,7 11,5 11,9 12,8 12,5 13,5 12,8 15,6 14,7 14,7 15,3 Feb-03 Feb-04 Feb-05 Feb-06 Feb-07 Feb-08 Feb-09 Source: CNE, February ,6 49, Old Energy Source: CCEE data New Energy (Thermo Hydro) Up to ~ 1000 MW Prices: January, 2009 Structural Projects

12 12 Content Latin America s turbulence but turbulence is not exclusive of today Impact on Energy Markets turbulence has somewhat an effect but inherent volatility continues to be main issue Technologies & Innovation Final Comments

13 USD/MWh 13 Volatility in spot prices is mainly driven by supply side s dynamics other than demand (if systems well balanced under normal conditions) 350 Illustration of Triple Contingency Water, Fuels Availability and Prices Extra cost in case of low hidrology / lack of fuels and high fuel prices (triple contingency) Extra cost in case of low hidrology / lack of fuels What the demand pays in normal conditions MW

14 14 Latam technology mix mostly driven by local primary energy availability. ref: IEA 2006, except Puerto Rico; PREPA 2007, Chile: CNE 2007, Belize & small Islands, EIA 2005, Rest of South America EIA 2005.

15 15 Latam has an important potential in non conventional renewable primary energy sources (1/3) Geothermal: 25% of world s potential Geothermal potential world-wide (IGA, 2001). High-temperature resources suitable for electricity generation Conventional technology in TWh/yr of electricity Conventional and binary technology in TWh/yr of electricity Low-temperature resources suitable for direct use in million TJ/yr of heat (lower limit) Europe % % % Asia % % % Africa % % % North America % % % Latin America % % % Oceania % % % World potential % % %

16 16 Latam has an important potential in non conventional renewable primary energy sources (2/3) Wind Energy: important potential, local dynamics to be analyzed World Wind Atlas Oceans Annual Wind Speed at 50 m Source: Example of Wind Turbine Generators Evolution

17 17 Latam has an important potential in non conventional renewable primary energy sources (1/3) Solar Power: located in altiplano area Solar Power Potential

18 In addition, Latin America has important untapped hydro resources... Practicable Hidropower Geographic Total Developed 1990 Remaining 1990 Region TWh/a TWh/a % TWh/a % Europe 1, Asia 3, , Africa 2, , North American Latin American 2, , Oceania World Total 10,480 2, , Source: World Energy Council 2000 World practicable hydropower < 20% of world gross hydropower 18 18

19 19 Content Latin America s turbulence but turbulence is not exclusive of today Impact on Energy Markets turbulence has somewhat an effect but inherent volatility continues to be main issue Technologies & Innovation important untapped renewable energy resources. Final Comments

20 20 Final Comments Latin America has passed over several crisis during past decades. Is this time different? A question for the economists Latam has important hydro resources still to be developed. Innovation is still an important issue for the Long term. Expansion with non conventional renewable energy sources in Latam: Current conditions may not be favorable to develop new projects, but also demand for these technologies is being eased Financial markets stressed Market electricity prices and cost of technology may not be completely in line. Stagnated demand? Capacity Payments? Our region shows important primary energy resources (solar, geothermal, wind, small hydros) So, expansion with non conventional renewables as well as conventional renewables seems appropriate in the long term.

21 21 Thank you Darío M. Febré Sr. Strategy Manager GDF SUEZ Energy Latin America