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Market IntegrationThe Southern Cone of
South AmericaExperiences
Juan Luchilo – CAMMESAAPEx 2003 ConferenceCartagena, Colombia
Regional Market - Basic Data
Mercosur Market, 5 countries:(Argentina, Brazil, Chile, Paraguay, Uruguay)
Population: about 240 M
Installed Capacity: 120 TW
Annual Energy Consumption: 450 TWh
Regional Market - Basic Data
Different resources in each country (Brazil, Uruguay, Paraguay mostly hydro; Argentina, Chile, hydrothermal) and level of deregulationLong distances between main loads and from resources to load; Barriers between countries natural (mountains, rivers) political => openness to integrate marketstechnical and economical viability=> distances, electrical issuesOpportunities => complementarity of demand and hydro availability, gas and electricity integration
Energy Conssumption
Argentina16%
Brazil73%
Chile9%
Paraguay0%
Uruguay1%
Deregulation of the Electric Sector
BRAZIL 1998
ARGENTINA 1992
PARAGUAY ?
CHILE 1982URUGUAY 200?
Links - Evolution
Before 1997 => Integration related with binational hydro power plants; agreement between countriesArgentina – Uruguay - Salto Grande (1890 MW)Brazil – Paraguay – Itaipú (12600 MW)Argentina – Paraguay - Yacyreta (1800 MW)
Links - Evolution
After 1997=> Integration related with market opportunities=>
competitive market, gas availability and new capacity in Argentinageneration needs at northern Chile complementarity with Brazil and Uruguay (firm capacity for dry hydro years)
Argentina – Chile => new 345 kV link from Salta to Northern Chile; thermal generation built specifically for that purpose; isolatedArgentina - Brazil (2000 MW); 2 back to back DC converters (50/60 HZ) built – firm capacity contractsArgentina – Uruguay – firm capacity contracts (400 MW) using existing link
Electricity or/and Gas?
As well as electricity, gas has also become a product exchange in the south cone:
Brazil imports from Argentina and Bolivia, and transform part locally in electricityChile imports from Argentina, to fuel its new generation plantsUruguay is on the same way soon
There’s a competition wether to transport gas and transform it afterwards in electricity or to produce electricity and then transport it through wires; economic viability is related with volume requirement and scale
High Loads
Hydro Resources
Gas Resources
Energy Links – Gas & Electricity
Electroducto Argentina Chile
GasoductoAtacama y Norandino
Gasoducto Gasandes 7-8
Gasoducto del Pacífico 1.5-9
Gasoducto Bolivia-Brasil 30
Electricity link Argentina-Brazil
Electricity link Argentina-Uruguay
Electricity link Argentina-Paraguay
Resources Optimizatión
Share reserves (seasonal,
hourly)
Increase reliability, quality
Impacts (Argentina – Brazil link)
Some Benefits
It requires adequate technical coordination between the interconnected systems
Results -Argentina – Brazil link
Exports to Brazil from Argentina - MW - % Local Demand
0
500
1000
1500
2000
2500
Ene
-00
Mar
-00
May
-00
Jul-0
0
Sep
-00
Nov
-00
Ene
-01
Mar
-01
May
-01
Jul-0
1
Sep
-01
Nov
-01
Ene
-02
Mar
-02
May
-02
Jul-0
2
Sep
-02
Nov
-02
Ene
-03
Mar
-03
May
-03
Jul-0
3
Sep
-03
Nov
-03
0%
5%
10%
15%
20%
25%
Exp Brasil MAX % Local Demand
Increase volatility in Argentine spot price (2000 MW firm capacity delivered if Brazil needs it; Argentina is a 10000 MW system)
Impacts
Precios Medios Argentina
0
5
10
15
20
25
30
35
40
Ene Feb Mar Abr May Jun Jul Ago Sep Oct Nov Dic
Meses
$/M
Wh
ZONA DE VOLATILIDAD
PRECIOS PARA INTERCAMBIO NULO
PRECIOS PARA INTERCAMBIO MAXIMO
PRECIO PARA INTERCAMBIO VARIABLE
Macroeconomic issues (like devaluation) affect
parties => requires dynamic adaptation to mantain
in the short term operativity, and long term
commercial viability
Lack of regulatory compatibility
Technical and economical complexity to
interconnect countries
Concerns
Quality, Technology & TransparencyFor an Electrical Market without frontiers
¡Thanks for your attention!
Colombia, October 2003
Doubts => [email protected] More info => www.cammesa.com.ar