interaction between adjacent markets in south america

Todos los derechos reservados para XM S.A E.S.P.

2007 APEx ConferenceOctober 14 to October 17

Paris, France

Interaction between adjacent markets in South America

Luis Alejandro Camargo S.Wholesale Market Manager

XM S.A. E.S.P.

2

Contents

• Regional situation

• Regional interconnections

• Andean Community

• Central America Region

• The Southern Common Market (MERCOSUR)

3

Contents






4R

eso

urc

es

15,185

(22%)

NordpoolReference

19,528

(22%)

Latin America Situation

South AmericaMesoamerica

4,269

(3.4%)

460

(1.2%)

InterconnectionMW

(%Demand)

Latin America

4,729

(4.3%)

65,625

(35%)

ReserveMW

[%Cap. Inst.]

19,522

(34%)

79,811

(42%)

Net

58,263 189,595 189,373 88,921

38,741 123,970 109,562 69,393

Cap. Installed [MW]

Demand [MW]

MER (Central America)ITX Méx - Guat

Market coupling (Col – Ecu)

ITXs Other countriesCommon MarketInterconnection situation

5

Natural Gas Reserves

TFC: Trillion Cubic Feet

152 TCF67%

12 TCF 5%

26 TCF12%

2 TCF1%

4 TCF2%

12 TCF 5%

15 TCF7%

1 TCF1%

6

Complementarity (Central América - Colombia)

JAN0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

FEB MAR ABR MAY JUN JUL AUG SEP OCT NOV DEC

AR

-C

A(G

Wh-

mon

th)

COL

JAN0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

FEB MAR ABR MAY JUN JUL AUG SEP OCT NOV DEC

AR

-C

A(G

Wh-

mon

th)

COL

Day of March 2005

20

40

60

80

100

0

1:00

3:00

5:00

7:00

9:00

11:0

0

13:0

0

15:0

0

17:0

0

19:0

0

21:0

0

23:0

00

1:00

3:00

5:00

7:00

9:00

11:0

0

13:0

0

15:0

0

17:0

0

19:0

0

21:0

0

23:0

0

% DemandMax.

COL PAN

Demand

Hydrology

7

Contents






8

Interconnection capacities (MW)

336 MW

500 MW 200 MW

100 MW

6,300 MW900 MW

70 MW

2,000 MW

2,000 MW

600 MW

120 MW

80 MW

80 MW

80 MW100 MW

200 MW

300 MW

Central America

Policies and processes that facilitate the development of regional infrastructure

300 MW

Andean Community

Possible participation of Chile, Venezuela and Panama

Agreement CAN 536 (2002)

Mercosur- The Southern Common Market

Countries with high electricity demand

Many interconnections

Scenery of integration (present)

Scenery of integration (future)

Physical interconnection (future)

Physical interconnection (present)

9

INTERCONNECTION CAPACITY ALLOCATION

E

E

F

F

F

FF

F

E

E

EE

E

E

E

Bilateral Long term bilateral contracts

Market Coupling

Implicit AuctionsDecoupled Systems

Implicit AuctionsCentralized PX

Market Splitting

1

2

3

E

F

Existing

Future

10

Contents






11

Andean Region

336 MW336 MW

500 MW500 MW

100 MW100 MW

CAN 536 CAN 536 Act.Act.

CAN 536 CAN 536 Act.Act.

Col - EcuadorTIE

Ecuador - Peru(TIE in progress)

Col - VenContracts

National networks

• CAN 536 Act. Dec. 2002

• TIE Colombia – Ecuador March 2003

• TIE Colombia – Ecuador - Peru In progress

12

0

50

100

150

200

Jan

Feb

Mar Ap

r

May Ju

n

Jul

Aug

Sep

Oct

Nov

Dec

GW

h

2004 2005 2006

Electricity Interchanges between Colombia and Ecuador

Date

Energy (GWh) Value (Million of US$)

Col → Ecu Ecu → Col Col → Ecu

2004 1,681 35 135

2005 1,757 16 151

2006 1,608 1 127

500MW

13

Contents






14

MER Transactions

0

20

40

6080

100

120

140

160

Jan

Feb

Mar

Apr

May Ju

n

Jul

Aug

Sep Oct

Nov

Dec

GW

h

2004 2005 2006

País/GWh

Guatemala

Imp Exp

El Salvador Imp Exp

Honduras

Imp Exp

Nicaragua Imp Exp

Costa Rica Imp Exp

Panamá

Imp Exp

Total

2005 322 14 22 300 2 58 8 22 69 8 0 104 54.2 530.0

2006 70 0 8 12 11 7 0.3 42 26 104 83 34 201.0

Transacciones anuales

0 500 1,000 1,500

2006

2005

2004

GW

h

-50.4%

-62.1%

Source: Regional Operator -EOR- www.enteoperador.org

National networks

100 MW

80 MW

80 MW

80 MW

120 MW

300 MW(2009)

Annual transactions

15

• Framework Treaty (1995)• Transitory regulations of Operation

and Trading (2002)• Regulator, ISO and PX Regional• MER Regulation (2005)

• Framework Treaty (1995)• Transitory regulations of Operation

and Trading (2002)• Regulator, ISO and PX Regional• MER Regulation (2005)

Lago

Nicaragua

Panamá

Aguacapa

Nejapa

Cañas

Ticuantepe

Parrita

Aguacaliente

Veladero

CajónRío LindoPanaluya

Ahuachapán

Planta Nicaragua

Guate Norte

Palmar Norte

15 de Sept.

T

Río Claro

SIEPAC Network

Interconnection substation

230 KV line

National substation

300 MW capacity 15 substationsCable OPGW

Country KMSGuatemala 281

Salvador

Honduras

Nicaragua

Costa Rica Panamá Total

230 KV, single circuitCost M US385

285

270

321

490

150

1,797

Operation date April 2009

80 MW

120 MW

80 MW

80 MW

100 MW

Common Electricity Market

www.eprsiepac.com

16

Contents






17

Interchanges electricity - Mercosur

PS: Regional interchanges included of thefollowing binational generators:

• Itaipú (Brazil – Paraguay)• Yacyretá (Argentina – Paraguay)• Salto Grande (Argentina – Uruguay)

Electricity Importation

0

10

20

30

40

50

TW

h

200320042005 Electricity Exportation

05

101520253035404550

TW

h

200320042005

0.0 20.0 40.0 60.0

2003

2004

2005

Exportations

Importations

Annual Transactions

Source: Olade

200 MW

6,300 MW900 MW

70 MW

2,000 MW

2,000 MW

600 MW

High physical integration

Low market integration

Capacity networks

18

CONCLUSIONS

19

Conclusions

Net benefits for coupled markets

However:

Political interference (subsidies, congestion

surplus) Policy of self-supplying

Price formation asymmetries: (fixed costs

recovery) Arbitration and Conflict Dispute Resolution

New interconnections in progress

CAN 536 Act application

Andean Countries

20

Conclusions

Regional electricity market with common rules Interchange reduction

High fuel prices Technical restrictions

Regional interconnection under construction

(2009)

MER – Central American Market

MERCOSUR

Bilateral physical contracts …

21 Links and information source

Argentina

Regulator http://www.enre.gov.ar/

Transmission http://www.transener.com.ar/

ISO http://www.cammesa.com.ar/

Power Exchange

Bolivia

Regulator http://www.superele.gov.bo/

Transmissionhttp://www.tde.com.bo/

http://www.isa.com.bo/

ISO http://www.cnb.net/cndc/

Power Exchange

Brazil

Regulator http://www.aneel.gov.br/

Transmissionhttp://www.eletrobras.gov.br/

http://www.eletrosul.gov.br/

ISO http://www.ons.org.br/ons/

Power Exchange http://www.mae.org.br/index.jsp

Colombia

Regulator http://www.creg.gov.co/

Transmission

http://www.isa.com.co/

http://www.transelca.com.co/

ISO http://www.xm.com.co/

Power Exchange

Ecuador

Regulator http://www.conelec.gov.ec/

Transmission http://www.transelectric.com.ec/

ISO http://www.cenace.org.ec/

Chile

Regulator http://www.cne.cl/

Transmissionhttp://www.transelec.cl/

http://www.cgetransmision.cl/

ISOPower Exchange

http://www.cdec-sic.cl/http://www.cdec-sing.cl/

Peru

Regulator http://www.osinerg.gob.pe/

Transmission

http://www.isa.com.pe/

http://www.rep.com.pe/

http://www.redesur.com.pe/

ISOhttp://www.coes.org.pe/

Paraguay

Regulator

http://www.ande.gov.py/Transmission

ISO

Uruguay

Regulator http://www.ursea.gub.uy/

Transmission http://www.ute.com.uy/

ISO http://www.dncu.gub.uy/

Power Exchange http://www.adme.com.uy/

El Salvador

Regulator http://www.siget.gob.sv/

ISOPower Exchange

http://www.ut.com.sv/

Guatemala Regulator http://www.cnee.gob.gt/

Honduras

Regulator http://www.cne.gob.hn/

TransmissionISO

http://www.enee.hn/

Nicaragua

Regulator http://www.ine.gob.ni/

Transmission http://www.entresa.com.ni/

ISO http://www.cndc.org.ni/

Panama

Regulator http://www.enteregulador.gob.pa/

Transmission http://www.etesa.com.pa/

ISO http://www.cnd.com.pa/index.htm

ISOPower Exchange

http://www.amm.org.gt/

interaction between adjacent markets in south america

Documents

tie colombia ecuador

peru tie

col ecuitxs

col ecuadortieecuador

mw900 mw70 mw2

mwhvalor miles

mandlatin america4

south americamesoamerica4