Los desafíos regulatorios para lograr matrices energéticas balanceadas en América Latina. Experiencia de políticas aplicadas en Brasil

Transcription

1 Los desafíos regulatorios para lograr matrices energéticas balanceadas en América Latina. Experiencia de políticas aplicadas en Brasil Luiz Barroso Seminario Retos y Desafíos para Desarrollo Energético de Chile Septiembre 2 de 2011 Santiago, Chile

2 Provider of analytical tools, R&D and consulting services (economic, environmental and financial studies) in electricity and gas since 1987 Staff of 50 specialists in engineering, optimization, energy systems, statistics, finance, regulation, environment and IT We work in more than 30 countries (Americas, Asia, Europe e Eurasia)

3 The Brazilian power system Brazil has one of the cleanest energy matrices in the world, with about 45% of the overall energy production coming from renewable sources The worldwide average is about 15% The power sector is even greener more precisely, bluer with 80% of the country s 120,000 MW installed capacity coming from hydropower Large plants in cascade over different basins Large reservoirs Hydropower is an essential resource for the country Hydro-thermal coordination allows economic and emissions savings to consumers 3

4 Current institutional structure National Council for Energy Policy (CNPE) Cabinet-level advisory panel for energy policy decisions Ministry of Mines and Energy (MME): Energy Research Corporation (EPE): Government-owned company in charge of planning studies Electric Sector Monitoring Committee (CMSE): monitors security of supply National Regulatory Agency for Electricity (ANEEL) Chamber for Electric Energy Trading (CCEE): wholesale market operation (accounting and clearing) National System Operator (ONS): responsible for centralized system operation and hydrothermal coordination There are other agencies for oil, gas and biofuels, environment, etc 4

5 Business dynamics Wholesale competition in generation with a mixed privatepublic ownership Private companies account for 15% of total energy production Private companies account for 70% of total energy distributed Typical load growth: 5% - 6% per year It is necessary to install 5,000 MW of new capacity per year ~43 TWh/year; 3,200 average MW of firm energy 5

6 Strategies for generation expansion Conventional hydro and gas as mainstream options Hydro resources available in the North region (Amazon): large and run-of-the river plants Local gas resources available Thermal generation contributes to increase the hydro system s reliability It is a dispatchable resource (valuable attribute) Renewable (wind, biomass and small hydro): complementary options Shorter construction time, hedge against load growth uncertainty Smaller scale projects, increases the range of potential investors and provide a hedge against any construction delay of large hydros Easier environmental licensing & location close to the load centers Coal and nuclear are plan B 6

7 How new capacity enter the system? All consumers (free and regulated) must be 100% contracted Verified yearly ex-post, penalties if under contracted Contracts are financial but must be backed by firm energy (MWh/y) Regulated users (70% of the market): contract energy through organized contract auctions Discos are responsible for load forecast; avoids government planners optimism Energy contracts facilitates project financing and reduce the risks for investors reduced prices Energy price = energy + capacity Free consumers (30% of the market) freely negotiate their contracts with generators/trading companies 7

8 The organized contract auctions for new capacity Regular (yearly) auctions exclusive for new energy Organized by the government to contract energy to supply distributor s energy needs Standardized long-term energy contracts offered 3 and 5 years ahead of delivery All technologies compete but the government can interfere in the candidate projects: has been used to organize project-specific auctions (e.g. large hydros), to avoid oil- and coalfired generation as candidate supply and to foster renewable Centralized procurement process (for economies of scale) from distributor s energy needs declaration Reserve energy auctions Organized by the government to contract additional energy to increase the system's security of supply The government defines the volumes to contract, all consumers pay for the energy The government can select the technologies that will participate, has been used to foster renewable 8

9 Outlook of the new energy auctions (1 of 2) New hydro concessions prepared by the government (EPE) and are auctioned in a step before the energy contract auction Investors are free to offer new (candidate) thermal projects Long-list of technical pre-requisites to register a project in the auction: Prior environmental license required for all projects (government obtain the license for new hydros) Grid connection study required Preliminary fuel supply agreement required for thermal plants Historical record and certified production for wind Water supply, right to use the land, etc 9

10 Outlook of the new energy auctions (2 of 2) Financial qualifications presented after the auction finishes and only for winners Guarantees for new energy auctions: bid bond (1% of project s estimated investment cost) & project completion (5% of project s estimated investment cost) An auction committee is formed by staff from regulator, Ministry of Energy, planning company and market operator and have several duties define the auction mechanism & suggest price caps define auction product & duration, prepare tender documents, etc 10

11 Risk allocation between generators and consumers Consumers take the systemic risks, difficult to be priced by investors: Transmission congestion risk taken by the consumer Contracts are indexed to inflation and fuel costs are indexed to international fuel prices High-voltage transmission tariffs estimated before the auction based on a reference transmission plan and pre-fixed for 10 years (tariff stability) EPE plans an integration network with layers of shared collector stations at different voltages to integrate renewable generators to the HV grid. Tailor-made long-term energy contracts offered for each technology Reliability options for thermal plants, assigns benefits of hydrothermal optimization/dispatch risk to the consumer Specific contracts for wind with a multi-year accounting mechanism to manage quantity risk and incentivize/penalize production above/below a given energy threshold. 11

12 Auction Results (1 of 3) (regular auctions of new capacity) 40% of new energy contracted since 2005 is fossil-fueled, 40% conventional hydro & 20% renewable (60% renewable in total) Average price: ~ 80 US$/MWh Source: PSR, from CCEE s data. Graph shows energy contracted in each year for future delivery (from 2008 to 2016) 12

13 Auction results (2 of 3) (Project-specific auctions) Large hydros contracted by specific auctions 2007 and 2008 (Madeira river plants): Santo Antonio (3,150 MW) & Jirau (3,300 MW), prices around 55 USD/MWh 2010: Belo Monte (11,233 MW): ~ 52 USD/MWh Winners: consortium of state-companies (50%), local private constructors, private Gencos (e.g. Suez Energy) and investment funds (e.g. Santander, Banif) Winners of the transmission auction: Madeira river (2500 km DC link): mix of private and public players; Belo Monte transmission system being designed 13

14 Auction results:(3 of 3) (Technology-specific auctions results wind power) Total of 5.8 GW of wind contracted in 82 US$/MWh 1.9 for 61 US$/MWh (2011) PROINFA was the first RES support mechanism in the country and based on a feed-in tariff (administratively set) * Wind competed against small hydro and biomass ** Wind competed against small hydro, biomass and gas-fired plants 14

15 Conclusions Brazil uses a combination of planning and competition to best deploy its energy resource portfolio Planning: develop networks and drive energy policy decisions Competition: auctions select players to develop generation and transmission projects 46 generation auctions organized, including 24 auctions for new capacity (7 auctions for RES) Overall private participation in winning projects: 75% What have we learned? Risk allocation is everything Long-term market reduce risks for investors and facilitates financing Centralized procurement process increases competition and creates economies of scale to contract larger projects State participation has played a role in large hydro developments (but limited to Eletrobras participation limit of 50%) Auctions provide transparent and efficient outcomes that are unlikely to be challenged in the future as the political and institutional scenarios change 15

16 For further reading* 1. Electricity Auctions: An Overview of Efficient Practices, by L.T. Maurer, L.A.Barroso, J. Chang, P.Benoit, D. Fields, B.Flach, M. Herrera-Dappe and M.V. Pereira., Forthcoming, C. Batlle, L.A.Barroso, Review Of Support Schemes For Renewable Energy Sources In South America - IAEE Energy Forum, Fall issue, L.A. Barroso, H.Rudnick, F.Seinsuss and P. Linares Economic and market impacts of renewable integration in Europe and Latin America IEEE Power & Energy Magazine, Vol.7, Issue 4, September-October 2010, Page(s): R. Moreno, L. A. Barroso,, B. Bezerra, S.Mocarquer, H.Rudnick, Auction Approaches of Long-Term Contracts to Ensure Generation Investment in Electricity Markets: Lessons from the Brazilian and Chilean Experiences - Energy Policy, vol. 38, Issue 10, , F. Porrua ; B. Bezerra; L.A. Barroso; P. Lino; F. Ralston; M.V. Pereira,, Wind Power Insertion through Energy Auctions in Brazil IEEE General Meeting, July 2010, Minneapolis, Minnesota, US 6. S.Mocarquer, L.A. Barroso, H.Rudnick and B.Bezerra, Energy policy in Latin America: the need for a balanced approach, IEEE Power & Energy Magazine, Vol.7, Issue 4, September-October 2009, Page(s): L. A. Barroso, R. Moreno, B. Bezerra, S.Mocarquer, H.Rudnick, Auctioning Adequacy in South America Through Long- Term Contracts and Options: From Classic Pay-as-Bid to Multi-Item Dynamic Auctions- IEEE PES General Meeting 2009, Calgary, Canada 8. L.A.Barroso, P.Lino, F.Porrua, F.Ralston, B.Bezerra Cheap and Clean Energy: Can Brazil Get Away with that? - IEEE PES General Meeting 2008, Pittsburg, USA 9. L.M. Thomé, L.A. Barroso, M.V.Pereira and F.Porrua, Planning for big things in Brazil: Planning and Building Large-Scale Transmission Networks in Competitive Hydrothermal Systems: Technical and Regulatory Challenges, IEEE Power & Energy Magazine, Vol. 5, Issue 2, September-October L.A.Barroso, B.Bezerra, A.Guimarães, J.Rosenblatt, M.V.Pereira, Auctions of Contracts and Energy Call Options to Ensure Supply Adequacy in the Second Stage of the Brazilian Power Sector Reform; - IEEE PES General Meeting 2006, Montreal, Canada. 11. L.A. Barroso; H. Rudnick, S.Mocárquer, T.Castro The Challenge Of Conciliating Energy Development & Environmental Constraints In South America; - IEEE Power and Energy Magazine, Vol 4, July-Aug * available at 16