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Reliability Charge
Colombia, an investment oportunity
Paris, Octuber 15-16th, 2007
Content
3. How to participate
4. Rights and Obligations
5. Schedule
2. An investment oportunity in the Colombian power market
1. Colombian Electric Sector
Colombian Electric Sector
Plantas hidráulicas 8.532,0 Plantas térmicas 4352,66 Plantas menores 427,4Cogeneradores 19,5
Total 13.331,5 MW
EcuadorImportación 215,0 MWExportación 285,0 MWVenezuelaImportación 205,0 MWExportación 336,0 MW
Volumen máximo 16.339,5 GWh
110-115 kV 6.125,3 Millas138 kV 9,6 Millas220-230 kV 6.665,2 Millas500 kV 900,8 Millas
Demanda 50.815 GWhCrecimiento 4,07%Demanda máxima de potencia 8762 MW
Demanda de energía eléctrica, 2006
Capacidad instalada (MW)
Interconexiones internacionales
Embalses
Sistema de transmisión
Colombian Power Market data (2006)
Generation
36
Transmission
11
Distribution 32
Retailing
67
13.280 MW installed
(64% hydro 33% thermal)
Peak demand: 8762 MW
(Growth: 1.42%)
Energy demand: 50.815 GWh
(Growth: 4.07%)
Firm energy (declared by
suppliers): 60,6 TWh-year
12 years of operation
Generators and retailers
Centralized transactions
Spot and bilateral prices
0
100
200
300
400
500
600
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/01
/19
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/07
/19
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/07
/20
06
$ (
dic
, 20
06
) /k
Wh
Precio de Bolsa Precio de Contratos
Transactions in the wholesale energy market (2006)
$ 537.76 18.44%
$ 549.00 18.83%
$ 175.78 6.03%
$ 1 653.61 56.71%
$ 2 916.16 mlls
Delivery of energy in scarcity conditions
Building and operation of power assets
Constant payment ($/GWh) of Firm EnergyCommitment period: up
to 20 years
Firm Energy Auction to allocate FEO
What is the oportunity?
When? Supply-Demand Balance
ACTUAL
Dic.12-Nov.13
Dic.13-Nov.14Dic.14-Nov.15
52.000
54.000
56.000
58.000
60.000
62.000
64.000
66.000
68.000
70.000
72.000
74.000
76.000
78.000
80.000
52.000
54.000
56.000
58.000
60.000
62.000
64.000
66.000
68.000
70.000
72.000
74.000
76.000
78.000
80.000
Dic.06-Nov.07 Dic.07-Nov.08 Dic.08-Nov.09 Dic.09-Nov.10 Dic.10-Nov.11 Dic.11-Nov.12 Dic.12-Nov.13 Dic.13-Nov.14
GWh
GWh
BALANCE DEMANDA - OFERTA DE ENERGÍA FIRME
Oferta 95% PSS Esc. Bajo Esc . Medio Esc . Alto Oferta Base
Termo Yopal - 224 TermoMorro - 378 TermoCandelaria 2 - 1213 Urrá - 296TermoCandelaria 1 - 224Tebsa - 315 Cartagena 1 - 121SubTotal (GWh) 2771TermoEmcali - 154Barranquilla 4 - 33 Guajira 2 - 152 SubTotal (Gwh) 339
ACTUAL
TermoFlores3 - 135 Tebsa - 281 Barranquilla 4 - 93 Guajira 2 - 208 Total (GWh) - 717
TermoFloresCC - 1421 Amaime - 16Bugalagrande - 54SubTotal (GWh) 1491
Porce3 - 3547Miel I - 210
REPUBLICA DE COLOMBIA MINISTERIO DE MINAS Y ENERGIA
UNIDAD DE PLANEACION MINERO-ENERGETICA
How to participate?
1. To Inscribe a project of power generation in Colombia
Requirements for the Inscription
Feasibility studiesFinancial and management schemeApproval of Environmental Alternatives DiagnosisInformation about land acquisition optionsRequest of conection to the transport networkFuel acquisition schemeDesigns in execution Presentation of environmental alternatives Studies
Information about power generation projects in Colombiaupme.gov.co
www.upme.gov.co
How to participate?
3. To build and operate the generation asset
2. To bid in the Firm Energy Auction
P2
P3
Round 5
Round 4P4
P5
13.4 = P6
Round 3
Round 2
P1 Round 1excess supply
13.00 = P6’
Aggregated supply
Clearing price = CXCD
DUS$/MWh
26.8 = P0
MWh
Starting price
Energy to be auctioned and commitment period
2007 … 2011 2012 2013 2014 2015 2016 ........ 2028 2029 2030 2031 2032 2033 2034 2035 2036 2037 2038
GWh
Demand
Transition Period
Energy to be auctioned
years
Commitment up to 20 years
Generator: Obligations and Rights
1. To have a generation asset to back the FEO
2. To have the fuel to generate
3. Deliver the energy when Spot > Scarcity prices as dispatch required it
Obligations Rights
1. To receive the Reliability Charge, even if the FEO is not required, during the commitment period.
2. FEO protected by Colombian Laws and Regulation
Spot price
FEO is required
Demand: Obligations and Rights
Obligations Rights
To pay the reliability charge during the commitment period, even if the FEO is not required.
To buy the energy up to the Scarcity Price when Spot Price>Scarcity Price
Legal Stability of CXC
• Electricity Law inforce to evaluate reliability each plant gives to SIN
• This regime is part of code of Wholesale Energy Market (MEM).
• CXC is one of transactions of the MEM
• The Firm Energy Commitment (OEF) is a legal relation as a result of the acution with well defined rigths and obligations
• CREG has defined integrally the regime of the transaction: Assignation of OEF, duration, responsability, risks, guarantees, settlement, billing and payment.
• There is a legal stability clause
• Each agent will be certify by ASIC for a legal stability of the transaction.
Guarantees
1. Entrance before commissioning period
2. Fuel availability
3. Declaration of firm energy higher than Base Firm Energy
4. Declaration of higher firm energy due to IHF improvements
5. Payment of commission to remunerate a succesful auction promotion.
Reconfiguration Auctions
Security Rings
Secondary Market
Demand Response
Last resource generator
Incentives
• Fixed CXC incomes– Up to 20 years for new plants– Up to 10 years for Closing Ciclo and Under
cosntruction– Up to 5 for minor repowering in transition
• Alternatives for ensuring fuelContract or guaranties
• Legal stability.• Improvment of availability.
Schedule
• 2007
– Transition period assignment 2008, 2011, 2012
• 2008
– 2013 Firm Energy Auction– 2009 Firm Energy Assignment
