Views of implementing a GHG market mechanism in Chile

Transcription

1 Views of implementing a GHG market mechanism in Chile XIII IEA-IETA-EPRI Annual Workshop on Greenhouse Gas Emission Trading Putting climate policy into practice Ignacio Fernandez Ministry of Energy Chile September 11th, 2013

2 Size of the economy Chile: Country profile Population : 17.4 million GDP : US$ 268 billion GDP per capita : US$ Annual growth rate : 5.9% Unemployment : 6.6% Inflation : 3.3% Main economic activities Mining (copper) Agriculture (wines, forestry) Services (finance, tourism) Source: World Bank, IMF, Chile s Central Bank

3 Background: Electricity supply mix ( ) 20,000 18,000 16,000 14,000 12,000 10,000 Natural Gas Diesel Coal Solar Wind Biomass Hydro < 20 MW Hydro > 20 MW Fossil Fuels 8,000 6,000 4,000 2,000 0 Source: National Energy Commision: Electricity Statistics

4 Background: Electricity sector profile Electricity production in ,546 GWh Supply mix in ,600 MW Natural Gas 2,356 Fuel Oil 216 Wind 383 CHP 25 Coal + Petcoke 5,029 LNG 10,101 Large Hydro 12,054 Coal 21,828 ROR Hydro 8,069 Diesel 3,609 Diesel + Fuel Oil 48 Biomass 1,828 Wind 1.6 Hydro < 20 MW 1.7 Solar 0.0 Biomass 2.1 Coal 24.2 Diesel 15.3 Hydro > 20 MW 30.8 Natural Gas 24.2 Source: National Energy Commision

5 Background: Electricity profile (2012) Two main electric grids SING (Great north) Mining: 35% electric demand 4,3 GW Installed capacity 16,751 GWh Thermal SIC (Central) Large population centers 14,1 GW Installed capacity 26,539 GWh Thermal 20,046 GWh Hydro 383 GWh Wind Source: CDEC SIC (Central zone power generation system operator)

6 Chile s GHG Emissions

7 Energy Policy

8 Renewable Energy Policy (Law 20,257) RPS that requires that a given % of the electricity sold by power generators comes from renewable energy sources Increase of the requirement: : 5% : goes up 0,5% annualy up to 10% by 2024

9 Projections of the Renewable Energy Law Historic rate of implementation of RE projects Projection based on projects under construction (MW) Proyección-Proyectos en Construcción Instalación Historica de Proyectos ERNC Required total additionality by RE Law and RE power generation estimate (GWh) Proyección Obligaciones ERNC Ley Proyección Inyecciones ERNC 9

10 New 20/25 Renewable Energy Law Incentive mechanism based on competition that improves the conditions for developers to get financing for NCRE projects Increases the share requirement of NCRE to 20% by 2025 and introduces an energy block bidding mechanism exclusive for NCRE Characteristics Annual public bidding of energy blocks (GWh) Each party bids on an amount of energy (GWh) and a price per unit of output (US$/MWh) Price is first criteria, going up until the entire energy block is completed There is a price cap for the bids 23% 20% 18% 15% 13% 10% 8% 5% 3% 0% Ley Nueva Meta

11 Teracalorias Energy Efficiency Action Plan Consumo de energía proyectado con EE Consumo de energía proyectado sin EE 12% Sector Total savings by 2020 (Tcal) Savings on 2020 (Tcal) Savings on 2020 (%) Buildings 36,071 8, Appliances 12,905 3, Industry & Mining 62,046 16, Transport 22,396 5, Firewood 36,637 7, Total 170,055 41, Actions to implement EE Action Plan Sets MEPS Design and implement EE programs such as CFL, industrial energy audits, etc. Massive awareness campaigns Channels financing for EE for both public and private sectors

12 Climate Policy

13 National Climate Policy: Relevant Initiatives Ministry of Environment Ministry of Energy Ministry of Agriculture National Forestry Service

14 PMR Preparation Phase ETS elements SCM MRV elements MRP Proposal National situation Chile s PMR Implementation Phase Diagram PMR Implementation ETS Design Stand alone tools: MRV Registry Capacity building Complementary instruments Additional funding ETS Energy sector Government technical & political analyses ETS at 14 National scale

15 Criteria design for an ETS in Chile Mapping and Diagnostic Regulatory and Institutional capabilities for MRV Macro-economic analysis Build on long term mitigation scenarios (MAPS) Development of a DSGE model Micro-economic analysis Development of appropriate elasticities, MAC curves, modeling for specific sectors MRV Improve and strengthen capacities and standards for bottom-up MRV Technical and communication strategies Development of communications strategy and stakeholder outreach*

16 Policy Integration

17 IEA s Policy Integration Study for Chile Integrating emissions trading with existing energy policies: Issues for Chile Objective: Create a general guidance document to help countries, like Chile, contemplating the introduction of CO2 pricing to integrate this well with existing energy policies.

18 Thanks