Documente Academic
Documente Profesional
Documente Cultură
2010
Copper Connects Life TM
Renewable Energy for Electricity Generation in Latin America Page i
EXECUTION
Gilberto De Martino Jannuzzi
University of Campinas – UNICAMP and International Energy Initiative – IEI, Brazil
Judith Navarro
Energía, Tecnología y Educación, S.C. – ENTE, S.C., Mexico
DISCLAIMER
Although this document has been prepared with due care, the ICA and any other participating
institution are not responsible for the information and analysis presented, which shall be
credited directly to the authors of the study.
2.1 GENERATION OF ELECTRICITY FROM RENEWABLE SOURCES SITUATION AND OUTLOOK .......................6
2.2 THE FUTURE MARKET FOR ELECTRICITY FROM RENEWABLE NON-CONVENTIONAL SOURCES .................8
2.3 COPPER QUANTITY ......................................................................................................... 12
2.4 THE REGULATORY SITUATION, INCENTIVES AND FINANCING ...................................................... 12
2.5 PUBLIC AGENTS, MARKET PLAYERS, PARTNERS AND INSTITUTIONS.............................................. 15
2.6 AN ANALYSIS OF THE MOST ATTRACTIVE ENERGY MARKETS IN LATIN AMERICA .............................. 18
4 REFERENCES............................................................................................................... 137
TABLE 1: ADDITIONAL MINIMUM AND MAXIMUM INSTALLED CAPACITY PER SOURCE AND COUNTRY (MW)....... 2
TABLE 2: ESTIMATED ADDITIONAL COPPER REQUIRED TO MEET PROJECTED ELECTRICITY DEMAND FROM RE
TECHNOLOGIES YEAR 2020 (TON)................................................................................................. 3
TABLE 3: ESTIMATED POTENTIAL OF ALTERNATIVE SOURCES FOR ELECTRICITY GENERATION ............................ 8
TABLE 4: PRESENT INSTALLED CAPACITY AND ESTIMATED ELECTRICITY GENERATION FROM RENEWABLE ENERGY
SOURCES (MW) ...................................................................................................................... 11
TABLE 5: MINIMUM AND MAXIMUM QUANTITY OF ADDITIONAL COPPER PROJECTED FOR 2020 (IN TONNES) .. 12
TABLE 6: LEGAL FRAMEWORKS, INCENTIVES, SUPPORT MECHANISMS, AND FUNDING .................................. 15
TABLE 7: PARTICIPANTS OF THE RENEWABLE ENERGY SOURCES TECHNOLOGY MARKET ................................. 16
TABLE 8: MULTICRITERIA ANALYSIS THE PROBLEM, OBJECTIVES AND POLICY MAKERS ................................... 18
TABLE 9: TECHNOLOGIES AND COUNTRIES UNDER STUDY ........................................................................ 18
TABLE 10: THEORETICAL AND CURRENT HYDROELECTRIC CAPACITY IN LATIN AMERICA AND THE CARIBBEAN,
2005..................................................................................................................................... 21
TABLE 11: GEOTHERMAL ENERGY POTENTIAL....................................................................................... 22
TABLE 12: WIND ENERGY POTENTIAL. ................................................................................................ 22
TABLE 13: SOLAR ENERGY POTENTIAL (HORIZONTAL PLAN TO SURFACE). ................................................. 23
TABLE 14: REFERENCE SCENARIO OF GENERATION AND INSTALLED POWER IN LATIN AMERICA FOR A HORIZON
UNTIL 2030. ........................................................................................................................... 25
TABLE 15: ALTERNATIVE POLICY SCENARIO FOR GENERATION AND INSTALLED POWER IN LATIN AMERICA UNTIL
2030..................................................................................................................................... 25
TABLE 16: PERSPECTIVES FOR CSP ACCUMULATED INSTALLED CAPACITY IN LATIN AMERICA ......................... 26
TABLE 17: PERSPECTIVES FOR ACCUMULATED INSTALLED CAPACITY OF WIND ENERGY IN LATIN AMERICA ....... 27
TABLE 18: INSTALLED CAPACITY OF WIND ENERGY 2008/2009 (MW) .................................................... 28
TABLE 19: INSTALLED CAPACITY FOR ELECTRICITY GENERATION IN ARGENTINA (2008-2009) ....................... 29
TABLE 20: BIDS FOR RENEWABLE ENERGY AND POWER TO BE CONTRACTED ............................................. 30
TABLE 21: REFERENCE SCENARIOS AND ENERGY REVOLUTION................................................................. 31
TABLE 22: PROJECTIONS OF RENEWABLE ENERGY IN BRAZIL ................................................................... 35
TABLE 23: INSTALLED CAPACITY FOR ELECTRICITY GENERATION IN BRAZIL ................................................. 36
TABLE 24: ANNUAL GROWTH RATE BY SOURCE ACCORDING TO THE PDE 2019 .......................................... 37
TABLE 25: EVOLUTION OF INSTALLED CAPACITY PER GENERATION SOURCE (MW), 2010-2019 ................... 39
TABLE 26: LONG-TERM ELECTRICITY SUPPLY EXPANSION, PER GENERATION SOURCE (MW)........................ 40
TABLE 27: ADDITIONAL INSTALLED CAPACITY FORECASTED PER SOURCE FOR THE PNE 2030 AND THE
PRELIMINARY VERSION OF THE PDE 2010-2019. ......................................................................... 41
TABLE 28: SCENARIOS FOR RENEWABLE SOURCES IN 2015, 2020 AND 2030 ............................................ 42
TABLE 29: SPECIFIC AUCTIONS FOR RENEWABLE SOURCES THAT CONTEMPLATED BIOMASS ........................... 43
TABLE 30: REGIONAL DISTRIBUTION OF SURPLUS ELECTRIC POWER GENERATION CAPACITY FROM THE SUGAR
CANE/ALCOHOL SECTOR BIOMASS ACCORDING TO THERMAL-ELECTRICAL GENERATION TECHNOLOGIES
EMPLOYED IN EXPANSION AND RETROFITTING IN THE SUGAR CANE INDUSTRIAL SECTOR IN BRAZIL - MW 44
TABLE 31: PROJECTION OF INSTALLED CAPACITY AND ELECTRICITY GENERATION FROM SOLAR THERMAL
CONCENTRATORS ..................................................................................................................... 46
TABLE 32: INSTALLED CAPACITY USING RENEWABLE ENERGY IN CENTRAL AMERICA, 2008 ........................... 48
TABLE 33: DESIGNED CAPACITY TO BE INSTALLED USING RENEWABLE SOURCES IN CENTRAL AMERICA BY 2015 49
TABLE 34: CENTRAL AMERICA HYDROELECTRIC POTENTIAL, 2008 (MW) ................................................. 50
TABLE 35: INSTALLED CAPACITY AND GEOTHERMAL POTENTIAL IN CENTRAL AMERICA, 2008 (MW) ............. 51
TABLE 36: PROJECTIONS OF RENEWABLE ENERGY IN CHILE ..................................................................... 52
TABLE 37: INSTALLED CAPACITY OF ELECTRICAL SYSTEMS IN CHILE (2008) ............................................... 53
TABLE 38: SIC INSTALLED CAPACITY (MW) ......................................................................................... 55
TABLE 39: REFERENCE AND RE SCENARIOS IN CHILE. ............................................................................. 56
BioC Biofuels
BM World Bank
DR Development of renewables
PV Photovoltaic
FB Bariloche Foundation
INDECOPI National (Peruvian) Institute for the Defense of Competition and Intellectual
Property Protection
LPT National Program for Universal Access and Use of Electric Power - Light for
Everyone
PROURE Program for Rational and Efficient Use of Energy and Other Non-Conventional
Energy Forms
o Environmental concerns
Brazil, Chile
o Energy costs
Argentina, Colombia
o RE Potential
1
Large hidroelectric plants (>30 MW) were not considered, only small hydro (<30 MW).
2
Argentina, Brazil, Chile, Peru, Colombia, Venezuela, Mexico and Central America.
Table 1: Additional minimum and maximum installed capacity per source and country (MW)
Central
Argentina Colombia Venezuela Mexico
Brazil (2020) Chile (2020) Peru (2020) America
(2020) (2020) (2013) (2020)
(2015)
Wind energy 6000- 7800 200 – 8000 1000 – 6122 0 - 403 9 – 100 172 1724 115
SHP 6966 1004 616 - 676 0 – 509 512 – 601 0 465 0
Biomass 8521 300 - 1000 380 – 1742 101 180 0 100 110
Geothermal energy 0 100 – 200 0 – 488 125 – 400 55 0 126 25.5
Solar PV 0 250 - 500 4 80 0 0 0 0
Oceans 0 0 0 0 0 0 0 0
CSP 195 300 0 - 970 0 0 0 0 0
Source: Upper and lower projection values extracted from official sources. See section 3.4.
10. Based on official estimates the estimated additional total copper requirement up to 2020 is
expected to range from 57 to 111 thousand metric ton (Table 2). Wind power and SHP
accounts for 73% of the total copper demand for both upper and lower limits. When
projected biomass based electricity generation is included, these three RE technologies
reach 86% and 93% of copper demand for the upper and lower projection values
respectively.
11. For the lower limit of the projected power capacity, Brazil accounts for 69% of the total
amount of copper, far followed by Mexico with 10%. For the upper limit, on the other hand,
the copper share is better balanced: Brazil, Argentina and Chile account for 40%, 27% and
22% respectively.
Central
Argentina Colombia Venezuela Mexico Total
Brazil (2019) Chile (2020) Peru (2020) America
(2020) (2020) (2013) (2020) (min-max)
(2015)
Wind energy 15000-19500 500-20000 2500-15310 0-1010 20-250 430 4310 290 23050-61100
SHP 13930 2010 1230-1350 0-1020 1020-1200 0 930 0 19120-20440
Biomass 10230 360-1200 460-2090 120 220 0 120 130 11640-14110
Geothermal
0 0-800 0-1950 500-1600 220 0 500 100 1320-5170
energy
Solar PV 0 0-4400 40 700 0 0 0 0 740-5140
Oceans 0 0 0 0 0 0 0 0 0
CSP 780 1200 0-3880 0 0 0 0 0 1980-5860
Total 39940 – 44440 4070 – 29610 4230-24620 1320-4450 1480-1890 430 5860 520 57850-111820
Source: Table 4. Note: Upper and lower projection values extracted from official sources. See item 3.4.
1.6 Stakeholders
17. The presence and activity of stakeholders related to the promotion of RE technologies was
investigated. The study identified the most relevant Project developers, Manufacturers,
Environmental ministries/agency, Trade associations, Industrial and commerce chambers,
International Banks, Multilateral organizations, National agencies.
18. The presence of manufacturers is still very limited and practically inexistent, except for
Brazil (biomass, small hydro and wind) and Argentina (small hydro and wind).
19. Project developers and local partners are more disseminated and the countries with highest
numbers of these stakeholders per technology are PV (Peru and Mexico), biomass
(Argentina and Brazil), small hydro (Argentina, Brazil, Peru, Colombia, Mexico and Central
America), wind (Argentina and Brazil) and geothermal (Peru and Mexico).
3
Please, refer to section 5.1 for a full description of the exercise performed. This exercise was done
considering the contribution of the analysis performed for the 3 components of the present study:
market potential, regulation and policy framework, and local stakeholders. The purpose was to
investigate the most promising pair of country-technology up to year 2020.
4
This section was also based on Multicriteria Analysis (see Annex 5.1) and literature review.
0% 0%
13%
Wind
SHP (≤ 20 MW)
50% Biomass
Geothermal energy
37%
Solar photovoltaic
Source: Table 4.
o Among the countries studied, Brazil is currently responsible for more than 70% of the
7
installed capacity of renewables used for electricity generation, followed by Mexico (9%)
and Argentina (7%). Colombia and Central America, account each one for 4% of current
installed capacity and all other countries account for 2%, with the exception of Venezuela.
The high share of biomass among alternative sources in Brazil and Argentina explains their
predominance in the region. However, in other countries there is now a greater involvement
of SHPs.
5
In this work large hydroelectric plants are not included among 'renewable sources', only SHPs are
included in the study.
6
Argentina, Brazil, Central America, Chile, Peru, Colombia, Venezuela, and Mexico.
7
Refer to footnote (5), considered alternative sources are only: wind, SHPs, solar photovoltaic, and
biomass.
5%
9% Central America
7%
2% 4% Argentina
Brazil
Chile
Colombia
Mexico
Peru
71% Venezuela
Source: Table 4
o Regarding the total hydropower potential, Mexico has explored most of its economically
viable resources, reaching the rate of 87.4%, well above the region average. Brazil stands
out for its large share of hydropower, but remains 58.4% of its economically exploitable
capacity to be used. However, these resources are concentrated in the north of the country
and there are many environmental barriers. Bolivia, Ecuador and Peru are the South
America countries that still have a large availability of water resources for economically
viable use, since these countries do not use even 7% of the available potential. Venezuela
and Paraguay stand out in South America by using more than 50% of the economically
available potential for hydroelectric generation in the region.
o Geothermal energy is an important resource in Mexico and Central America, with installed
capacities of 965 MW and 502 MW respectively, in 2008. In these two cases, it is the main
source of electricity generation. Argentina has high enthalpy fields suitable for geothermal
use for electricity generation, but there is no estimate of the generation potential. Chile is
another country that has sought to develop its geothermal potential. In 2009, the Chilean
Government invited bids for 20 geothermal exploration concessions. During the geothermal
bidding process 59 exploration project offers were received, which granted to 9 companies
the 20 concession areas.
o Biomass is an energy of particular importance in Brazil, where it already surpasses SHPs. It
is also relevant in Argentina and Colombia being highly associated with the ethanol-sugar
industry and has growing interest for co-generation systems in those countries.
o Brazil is the country with the largest installed capacity of wind power, being followed by
Mexico and Argentina. Brazil, Mexico and Chile had the highest growth in wind power
generation in the region between 2008 and 2009 with, respectively, 78%, 138%, and 740% .
o The following table shows the estimated electric generation potentials for the studied
sources. The values were found in the literature and should be analyzed carefully, because
they originate from various authors and studies that have followed different approaches to
these estimates.
Solar PV
Wind energy (MW) SHP (MW) Geothermal (MW) Biomass (MW)
(kWh/m2.year)
Argentina 1800 5000 425-480 150-2000 430
Brazil 1095-2372.5 >250000 25913 360-3000 265401
Chile 663.5-2555 6000-10,000 2600 3500-7000 1000
Peru 1900-2500; 1800 2500 1000 1000-2990 1782
Colombia 1800 21000 25000 552 47
Venezuela 1606-2445.5 45195 15000 910 340
Mexico 1640-2370 40000 32503 6500-8000 800
Central America 1725-2175 400 – 600 W/m2(4) 180003 24400-31500 635
1 2
Notes: Estimated potential for electricity generation from cane bagasse until 2025; Estimated installed
3 4 4
power for 2020 due to lack of more data; small centrals (<10MW); small and large size; values for good
to excellent wind regime.
Sources: Argentina: Asal et al. (2005), SEN et al. (2009), SEN (2008); Central America: Garten Rothkopf
(2009), CEPAL (2007), MINAE (2007); Brasil: Garten Rothkopf (2009), Jannuzzi et al. (2008), Pigatto
(2008), Ecol News (2010), Walter & Ensinas (2010); Chile: Garten Rothkopf (2009), Mocarquer (2009),
Oliva (2008), UTFSM (2008b); Colombia: ESMAP (2007), UPME (2005a); Mexico: Garten Rothkopf
(2009), SENER (2006); Peru: Nogueira (2010), Gamarra (2010), REEEP (2009), DR (2006b); Venezuela:
Garten Rothkopf (2009), Márquez (2009).
MW
5000 2020
4000
3000
2000
1000
0
AR BR CL PE CO VE MX AC
Figure 3: Biomass: current installed capacity and projected values (average) (MW)
Source: Table 4.
o The highest projections for wind power expansion are for Argentina and Chile, although
8
expectations vary from 10 to more than 20 times the current capacity by 2020 for
Argentina, it is even greater for Chile (from present 20 MW to something between 1,000 and
6,122 MW). Wind generation expansion is also significant in Peru, Mexico and Venezuela
(Figure 4).
4500
4000
3500
3000 2008
2500
MW
2020
2000
1500
1000
500
0
AR BR CL PE CO VE MX AC
Figure 4: Wind energy: current installed capacity and projected values (average) (MW)
Source: Table 4.
o The expected expansion of SHPs is more conservative than the one observed for wind
energy, and shall have a higher growth rate in Chile and Peru.
8
Argentina's goal is to meet the electricity demand by 2016 with 8% from renewable sources (Law No.
26.190/06).
3000 2020
2000
1000
0
AR BR CL PE CO VE MX AC
Figure 5: SHPs: current installed capacity and projected values (average) (MW)
Source: Table 4.
o Estimates of PV electricity expansion are more difficult to be identified within the studied
countries. Argentina, Chile and Peru were the countries for which we could find projected
values of installed capacity, showing strong growth for Argentina and Peru, as shown in
Table 4.
o Geothermal energy will continue to have the greatest representation in Mexico and Central
America, but Argentina, Chile, Peru and Colombia have expectations for expansion.
1400
1200
1000
800 2008
MW
2020
600
400
200
0
AR BR CL PE CO VE MX AC
Figure 6: Geothermal energy: current installed capacity and projected values (average) (MW)
Source: Table 4.
Central
Brazil Argentina Chile Peru30 Colombia Mexico Argentina Colômbia Venezuela Central
Venezuela America Brazil (2015) Chile (2020) Peru (2020) Mexico
(2010) (2008) (2008) (2009) (2009) (2008) (2020) 6 (2020) (2013) America
(2008)
- Geothermal energy 0 0.675 0 0 0 0 965 502 0 11 02, 2003 130 23; 13024; 13025 125.0 400.032 55.035 126 25.5
- Solar PV 20 8 101 029 3.7 1 029 0.11 02, 5003 423, 424, 425 80.033
Table 5: Minimum and maximum quantity of additional copper projected for 2020 (in tonnes)
Central
Argentina Colombia Venezuela Mexico Total
Brazil (2020) Chile (2020) Peru (2020) America
(2020) (2020) (2013) (2020) (min-max)
(2015)
Wind energy 15000-19500 500-20000 2500-15310 0-1010 20-250 430 4310 290 23050-61100
SHP 13930 2010 1230-1350 0-1020 1020-1200 0 930 0 19120-20440
Biomass 10230 360-1200 460-2090 120 220 0 120 130 11640-14110
Geothermal
0 0-800 0-1950 500-1600 220 0 500 100 1320-5170
energy
Solar PV 0 0-4400 40 700 0 0 0 0 740-5140
Oceans 0 0 0 0 0 0 0 0 0
CSP 780 1200 0-3880 0 0 0 0 0 1980-5860
Total 39940 – 44440 4070 – 29610 4230-24620 1320-4450 1480-1890 430 5860 520 57850-111820
9
Wind, biomass and SHP.
10
The requirement applies to generators that provide energy to the Central Interconnected System (SIC)
and to the Interconnected System of Norte Grande (SING), whose installations were connected to the
system as of January 1, 2007. The legislation states that the required percentage of 10% should be
achieved gradually by increasing the volume of such energy, so that, between 2010 and 2014 it reaches
5%, increasing by 0.5% annually from 2015 onwards, reaching 10% in 2024, and ensuring that
participation by 2030.
Central
Brazil Argentina Chile Peru Colombia Venezuela Mexico
America
L/I/E, L/M,
Per, PL, L/I,M , L/I, DR, DR, L-DR/I/M,
L/I, L/E, F/E R L/I L/I
Generation (renewable R/E, R/M DR/E Mc, Per, L/I/Per,
energy sources) R/E
Transmission and
R/E
Distribution
(2) Mechanism type: E - Economic incentive; F - Fund Mechanism; I - Incentive mechanism: M - Market
creation; Mf-Feed-In Mechanism; Mc– Quotas mechanism;
(3) Other: Ep-Study for policymaking; Le - Special auctions; Per-Rural Electrification Program
+ advanced - advanced
SHP
Geothermal
Oceans
Wind
Solar PV
CSP
Biomass
Brazil
SHP
Geothermal
Oceans
Wind
Solar PV
CSP
Biomass
SHP
Chile
Geothermal
Oceans
Wind
Installation Consulting
Local Class
Manufacturers and Research and Funders
Partners/Gov’t Associations
Maintenance Engineering
Solar PV
CSP
Biomass
SHP
Peru
Geothermal
Oceans
Wind
Solar PV
CSP
Biomass
Colombia
SHP
Geothermal
Oceans
Wind
Solar PV
CSP
Biomass
Venezuela
SHP
Geothermal
Oceans
Wind
Solar PV
CSP
Biomass
Mexico
SHP
Geothermal
Oceans
Wind
Solar PV
CSP
Central America
Biomass
SHP
Geothermal
Oceans
Wind
Problem Define the next five-year investment plan in Latin America for power generation from renewable
specification energy sources. The use of copper is the main leveler.
To choose within a set of potential markets, those in which the potential use of copper is both
Objectives
larger and more effective.
o Table 9 presents the technologies listed by ICA and the countries in focus. They are the
decision object-units. They are seven technologies and seven countries and an aggregate
region (Central America and The Caribbean). So there are 56 alternatives (country-
technology pairs) to be evaluated, each represented by a pair of acronyms. For example,
BR_eo represents the wind energy in Brazil, CO_g geothermal energy in Colombia and so
on.
o Criteria selection and weights to prioritize: There are three axes of evaluation or criteria
used for this analysis: market, regulation and actors. The market criterion represents the
estimated amount of copper based on the projected additional installed capacity of the
study horizon in tonnes, i.e., a quantitative criterion. The other two criteria are qualitative
and represent, respectively, the degree of development and the importance of the legal
framework and existing players. The considered values for the multicriteria analysis were
those collected and presented in Table 78, Table 81 and Table 83.
o For whichever scenario, either for the upper and lower estimated amount of copper for the
next 10 years, Brazil stood out compared to others in wind, biomass and SHP modes. The
2. Brazil_biomass
3. Brazil_PCH
4. Argentina_wind
5. Mexico_wind
6. Chile_PCH
o From the list above, the three first pairs stand out in comparison to others. The latter three
also showed a certain prominence, but were followed relatively closely by the next ones.
o Now, when one considers the amount for higher levels of copper, technologies such as
solar PV in Argentina and wind energy in Chile excel. The preferable country-technology
pairs from the ICA standpoint were:
1. Brazil_wind
2. Argentina_wind
3. Brazil_biomass
4. Brazil_PCH
5. Chile_wind
3.1.1 INTRODUCTION
Initially, we present a general analysis on the potential and current exploitation of
resources related to renewable sources and results of projections for Latin America and the
Caribbean.
In the following sections of this chapter, an analysis is made for each of the countries
selected for the study.
The availability and quality of data on each of these resources vary widely, depending
significantly on the nature of the resource being studied. The following analysis provides an
overview of the current status of distribution of natural sources in the region.
Hidroelectricity
Regarding Table 10, some observations can be made with respect to Latin America
hydropower potential. Regarding the total hydropower potential, Mexico has explored most of its
economically viable resources, reaching the index of 87.4%, well above the region average.
Brazil stands out for its large share of hydropower, but still remains 58.4% of its economically
exploitable capacity to be used. However, the remaining resources are concentrated in the
north of the country and there are many environmental barriers. Bolivia, Ecuador and Peru are
the South America countries that still have a large availability of water resources for
economically viable use, since these countries do not use even 7% of the available potential.
Venezuela and Paraguay stand out in South America by using more than 50% of the
economically available potential for hydroelectric generation in the region.
11
The report "A Blueprint for Green Energy in the Americas 2009-v2" was carried out by the firm Garten
Rothkopf by request of the Inter-American Development Bank (IDB) as a product of the bank's
commitment to sustainable growth in the Americas. The opinions contained in the report are not IDB
opinions, and were offered to assist the bank in forming its own opinion. For the report production,
analysts at Garten Rothkopf counted, according to themselves, with the support of over 300 specialists
and held four major events that provided many points of view.
Theoretical Current
Economically Exploitable % of Theoretical % of the Economically
Country Capacity Generation
Capacity (TWh/year) Capacity Used Exploitable Capacity Used
(TWh/year) (TWh/year)
Central America
Belize 1 - 0.08 8 -
Honduras 16 - 1.76 11 -
Caribbean
Haiti 4 - 0.28 7 -
South America
Geothermal energy
Brazil stands out in Table 11 for having the lowest potential for exploitation of
geothermal source in Latin America and the Caribbean, contrary to the Caribbean, Mexico and
Guatemala that stand out in the region by having high geothermal potential. In South America,
except for Brazil and Venezuela, all countries have an average potential around 2.3 GW.
Wind energy
Table 12 shows the excellent potential for generating wind energy in countries like
Mexico, Argentina, Chile, Bolivia and the Dominican Republic, but many other countries in the
region have good wind speeds, such as Brazil, Colombia and Jamaica.
Haiti 5.6-6.4
Jamaica 6.4-7.0
These figures illustrate the potential for larger investment in solar energy for both
thermal (low and high temperatures) and for PV generation.
Country Average solar radiation (kWh/m2/day) Country Average solar radiation (kWh/m2/day)
Haiti 5.5-6.5
Jamaica 5.0-6.0
3.1.3 PROJECTIONS
Some worldwide long-term projections presented below include countries of this study.
The study does not present the major programs and policies considered in elaborating
the alternative policy scenario for the generation sector in Latin America. According to the
study reference scenario renewable energy sources, excluding large hydropower, will continue
to have a marginal participation in relation to domestic energy supply by 2030 in Latin America
(Table 14). Even contributing marginally, renewable alternatives showed the largest annual
growth in the region between 2004 and 2015 (7.3%) in terms of installed capacity, behind only
natural gas (10.0%). Looking more specifically per source, among them, all wind generation
and geothermal were the fastest growing ones in this period, with annual growths of 31% and
5.3%, respectively, during the same. Solar and oceans will not contribute until 2015 to any of
the two scenarios considered.
In the alternative policy scenario, renewable sources, excluding large hydroelectric, are
gaining importance due to their increased participation and due to reduced generation from
fossil fuels and from large hydroelectric plants (UHE). In this scenario, the renewable alternative
sources shall have an annual growth of installed capacity between 2004 and 2015 of 8.5%,
behind only of natural gas with an annual growth over the same period of 9.3%. Looking
specifically per source there is a slight increase, as compared to the reference scenario, of the
annual growth in installed geothermal power capacity in the period between 2004 and 2015.
Wind generation, geothermal and biomass are the ones with the fastest growth in the period,
with annual rates of 26.8% for wind generation and 5.4% for biomass and geothermal energy.
One can also observe that in both scenarios solar generation arises in the region's electric
matrix only in 2030, but already surpassing the geothermal source.
Table 15: Alternative policy scenario for generation and installed power in Latin America until 2030.
The CSP future potential was made considering both technical and economic potential.
The outlook is based on some assumptions to model how the industry will proceed under
different market conditions, which will influence the development of concentrated solar energy
industry. Three scenarios were devised: the reference scenario, and the moderate and
advanced scenario.
The reference scenario is the most conservative. It is based on projections from the
World Energy Outlook 2007 of the International Energy Agency and considers existing policies
and measures, but includes assumptions such as: the continuation of reforms in electricity and
gas markets, liberalization of energy markets by reducing customs barriers and the recent
policies aimed at fighting environmental pollution. The scenario assumes a growth rate of 7%
for 2011, dropping to just 1% in 2015 and remaining at this level until 2040.
After the 2040, the scenario assumes no significant increase in CSP. The moderate
scenario considers all policies already under way or planned in the world that supports
renewable energy. It assumes that renewable energy targets and CSP set by many countries
will be met and considers an increase of investors' confidence in the sector, resulting from a
In the moderate scenario, the growth rates of concentrated solar energy are
substantially higher than the reference scenario, starting at 17% per year in 2011 and
increasing to 27% per year in 2015. The growth rate remains at 27% per year in 2020, falling to
7% in 2030, 2% in 2040 and 1% after 2050. The advanced scenario is the most ambitious. It
assesses how far the concentrated solar power industry could grow in case of a "CSP vision".
In this scenario, all policies in favor of renewable energy, in accordance with the
recommendations of the industry, were selected and combined with the political will to realize
them. It is also assumed a rapid and coordinated increase of the network's ability to collect
solar energy from CSP plants in ideal sites and export it to industrialized countries and
emerging economies with high and growing demand for electricity. The purpose of this
scenario is to show what the concentrated solar energy sector could achieve with the proper
political commitment. In the advanced scenario of concentrated solar energy the expected
growth rate starts at 24% per year in 2010, drops to 19% in 2015, 7% in 2030, 5% in 2040 and
subsequently the growth rate will increase around 3% annually.
Within these scenarios, Latin America will play a marginal role compared to the rest of
the world (Table 16). The average share is 2.5% and 3.3% for 2020 and 2030. In this study,
assumptions for scenarios' elaboration are presented only as a whole without providing further
information on obtaining these scenarios for Latin America.
Table 16: Perspectives for CSP accumulated installed capacity in Latin America
The reference scenario is based on the World Energy Outlook 2007 of the International
Energy Agency and considers existing policies and measures, but includes assumptions such
as: the continuation of reforms in electricity and gas markets, liberalization of energy markets by
reducing customs barriers and the recent policies aimed at fighting environmental pollution. IEA
projections extend until 2030, but the GAC extrapolated them until 2050. The scenario assumes
a growth rate of 27% for 2008 decreased to 10% in 2010 and 4% in 2030, leveling off at around
1% in 2035.
The moderate scenario considers all policies already under way or planned in the world
that supports renewable energy. It assumes that renewable energy targets and wind energy set
by many countries will be met and considers an increase of investors' confidence in the sector,
resulting from a positive outcome of negotiations on the climate change in the UNFCCC COP-
15 in Copenhagen, Denmark, in December 2009.
In the moderate scenario, projected growth rates for wind energy are substantially
higher than the reference scenario, starting at 27% per year in 2008, decreasing to 19% in 2010
For the reference scenario, the share of Latin America in global installed capacity in
2020 and 2030 remains marginal: 1,4% and 1,6% respectively (Table 17). On the other hand,
for moderate and advanced scenarios, Latin America increases its participation in relation to the
world total, passing to represent 9.3% and 8.5% in 2020 and 2030, respectively, due to a jump
of installed capacity in Latin American countries. The study does not mention which countries
are the main responsible for this growth, but highlights the current market wind energy situation
for two countries in particular: Mexico and Brazil. It is noteworthy that the assumptions made for
the elaboration of scenarios are not specifically presented for each region or country.
Table 17: Perspectives for accumulated installed capacity of wind energy in Latin America
GWEC published in February 2010, the additional installed capacity in 2009 for various
countries, and here is the information for Latin America countries (GWEC, 2010a).
Brazil, Mexico and Chile had the highest growth in wind power generation in the region
between 2008 and 2009 with, respectively, 77,7%, 138%, and 740%.
Data on the installed capacity of wind power in Brazil shows a growth (78%) higher than
the world average (31%) in 2009. However, smaller than Latin America (95%) largely due to
considerable growth in Mexico (138%), Chile (740%) and Nicaragua, which went from 0 MW in
2008 to 40 MW in 2009. Brazil alone accounts for nearly half of the installed wind capacity in
12
Latin America (1,274 MW) .
Table 18 shows the growth of wind power installed capacity between 2008 and 2009 for
Latin America and the Caribbean.
12
However, Brazil accounts for only 0.38% of the worldwide installed wind capacity, while countries like
China and India already account for 15.9% and 6.92%, respectively.
Nicaragua 0 40 40 -
Uruguay 20 0 20 0%
Jamaica 22 1 23 5%
Caribbean 35 0 35 0%
Other* 6 0 6 0%
3.1.4 ARGENTINA
The installed capacity from renewable sources by 2009, excluding large hydropower
plants is 1,141.23 MW (Table 19).
Solar Total
(MW) Solar PV Wind Biomass Geothermal SHP Hydro Thermal Nuclear
Thermal MEM
Diesel 238
Additional 200.02,
02, 5003 02, 3003 3002, 10003 02, 2003 1001 02, 03
capacity (2020) 8000.03
1 2
Source: SEN et al. (2009) and CAMMESA (2009a); Reference Scenario (Greenpeace et al.,
3
2009); Energy Revolution Scenario (Greenpeace et al., 2009)
The Nation Energy Secretary published in 2009 the study "Renewable Energy:
diagnosis, barriers and proposals" (SEN et al., 2009) aiming to present a diagnosis of
renewable sources in the country and identify economic, institutional, financial and regulatory
barriers that could affect the development of projects from these sources in the country, and
also to identify strategies, actions and instruments to facilitate the removal of these barriers. The
sources' potential listed below is based on the diagnosis presented in this study.
The "Atlas Eólico del Potential del Sur Argentino", estimates in 5 GW the wind energy
potential technically usable in southern Argentina, where admittedly stands much of the national
potential (SEN et al., 2009, p.13). However, it should be noted that there are projects for
implementation of wind farms whose aggregate nominal output exceeds this value, which,
therefore, must be seen as a lower limit.
According to SEN et al. (2009), on the solar potential of the country, 11 of the 23
2
Argentine provinces have an average annual solar radiation higher than 5 kWh/m .day, the
lower limit for the use of PV systems according to the document. The main application of these
systems in the country is for electrification of isolated areas through the PERMER project. The
total installed capacity in 2007 is 10 MWp (p.11), while in 2002 it was 4.5 MWp (SEN, 2004).
The accessible biomass resource and potentially available reaches 148 Mt, as
13
estimated for Argentina by the WISDOM project. The use of biomass residues currently
supplies 720 MW, mainly in sugar mills. Asal et al. (2005) indicates that there is a potential for
electricity generation from biomass source of 430 MW, using mainly wood and agro-industrial
residues, but despite the large potential there are still major barriers to their use.
Argentina has high enthalpy fields suitable for geothermal use for electricity generation,
such as Copahue-Caviahue, Domuyo, Tuzgle and Valle del Cura, but there is no estimate of the
generation potential (although there is a statement that it is possible for a project to reach 150
MW (SEN et al., 2009, p. 17)).
The SHPs installed capacity in the country is 380 MW and government studies indicate
a potential between 425 and 480 MW.
13
WISDOM (Woodfuel Integrated Supply / Demand Overview Mapping) is a Project of the “FAO Wood
Energy Programme” for the survey of agroforestry resources in various locations around the world.
Argentina has a goal to meet electricity demand in 2016 with 8% from renewable
sources (Law No. 26.190/06). Under that same law, it is required to elaborate a federal program
for the development of renewable energy, but by April 2010 there was yet no announcement of
the program elaboration. Therefore, to date, there are no official projections (at least available)
14
that indicate the scenario envisioned for the planning horizon .
What is currently official are renewable sources bids that are being undertaken by the
15
state owned company ENARSA to reach the 8% target under the program GENREN (Table
20). The results of the bidding were announced only in July 2010, indicating slowness by the
Argentine government, which also announced that new bids will be made for technologies such
as wind, biomass and thermal with biofuels, due to low offer of new developments or even none
for some sources (urban solid waste, geothermal, solar thermal and biogas) (SEN, 2010a;
ENARSA et al., 2010). It is important to highlight that the bidding does not set a deadline for an
operation start. The operating date must be specified by the entrepreneur at the time of the
offer.
Thus, from the nine sources covered, only four had signed contracts, despite new bids
for the other sources being established, except biomass, as mentioned, ,. There is the
possibility of new bids for the latter source, along with wind source and biofuels, according to
ENARSA et al. (2010).
Source: ENARSA (2009); ENARSA (2010a); ENARSA (2010b); ENARSA (2010c); ENARSA (2010d).
There are unofficial long-term scenarios as from Greenpeace, 2009, with a 2050
horizon. This study formulates a scenario with great change in the country's energy matrix with
the main objective of reducing greenhouse gases emissions by the energy sector. It forecasts
14
There is a report prepared by SEN (2004) that envisions some future values of installed capacity for
some renewable sorces. Because it is former to Law No. 26.190/06, these were not considered in this
work, but a summary of SEN (2004) is enclosed.
15
GENREN (Licitación de Energía Eléctrica a Partir de Fuentes Renovables) is the name given by the
govenment to this series of bids.
As it can be noted by the difference between these two scenarios, the energy revolution
scenario assumes a fast and structural change of the energy matrix in the period of 2010 -
2020, especially for wind energy, the base source for preparation of this scenario.
Given the significant amount of wind projects offered in the GENREN program first bid
(over 1.4 GW), a growth of 8 GW of installed wind capacity in the 2010's cannot be discarded.
Even though, it would be necessary the conjunction of several favorable factors to achieve this
projection, including the strong support of government and expressive actuation of private
entrepreneurs outside the biddings' framework, what turns installation of 8 GW in ten years
something difficult to achieve, even if a generation capacity in the same order of magnitude is
likely. However, this can change with the successful implementation of the Diadema project,
which foresees the installation of 16 GW (see next section), although there is no indication in
this direction. On the other hand, Recordon (2009) foresees an installed wind capacity in
Argentina of almost 1 GW in 2020.
Reference Scenario
Total generation 25 30 38 47 57 69
Renewable 10 12 14 17 19 21
Hydraulic 10 12 14 16 18 19
Wind 0.0 0.0 0.2 0.4 0.6 0.8
Total generation 25 30 38 44 53 67
Renewable 10 13 24 33 43 60
Hydraulic 10 12 14 14 16 17
Wind energy
As a first step for the development of wind energy in the country, the Argentine wind
map was elaborated (Sistema de Información Geográfica Eólico), which identified a large
potential mainly in Patagonia and on the Atlantic coast near Buenos Aires (CREE et al. 2006).
Thus, the main projects are concentrated in these regions whose potential can reach at least 5
GW.
The official wind source development program is the PENEE- "National Strategic Plan
for Wind Energy (Plano Estratégico Nacional de Energia Eólica)", presented by SEN (2005),
aiming to install 300 MW in three years (the plan was released in 2005).The first project,
Vientos de la Patagonia I, should have been completed in 2006 but in February 2010 only the
first 1.5 MW Impsa wind turbine was in operation. The first phase of the project aims to
homologate this generator and another model of NRG Patagonia, and then install 60 MW using
these generators (CADER, 2009).
• Pico Truncado Wind Farm, with 600 to 900 MW. Announced in 2009 and to be
developed by the Spanish group Guascor Wind, it is expected to start
operations in 2013/2014, although further news on the project development are
required.
• Arauco Wind Farm, in La Rioja, with 12 Impsa generators of 2.1 MW, to reach
25.2 MW. Operation start is scheduled for 2010 and the first turbine is already
mounted.
• Vientos Del Secano, with 50 MW. The operation is scheduled for the end of
2011. The design and environmental impact studies are already completed and
PEPSA, the park operator has already obtained permission to join the
wholesale energy market MEM.
• Diadema, with 6.3 MW. Developed by CAPSA/CAPEX, the project would be the
initial step for the installation of a giant wind farm (16 GW) focused on hydrogen
generation (AAEE, 2010a). Despite the scale of the project, the project is
temporarily suspended (CADER, 2009).
It should be noted that the projects candidate in the bidding are not necessarily in
implementation phase. According to the Interamerican Development Bank, two more projects
are in early stages of study, Arenas Verdes (120 MW) and Pampa Alta (30 MW), in the
framework of the Centrais Eólicas do Sul program, with the bank financing for realization of
initial studies (IADB, 2010).
In the EE 01/2009 bidding, 17 projects were selected totaling 754 MW, representing 254
MW more than the power that would be originally contracted. The winners, listed in the
institutional analysis, were IMPSA (155 MW), Emgasud (180 MW), Isolux (200 MW),
International New Energies (50 MW), Patagonia Wind Energy (50 MW), Energías Sustentables
(20 MW ) and Sogesic (99 MW) (ENARSA et al. 2010; SEN, 2010a). All projects are located in
Patagonia, except the ones from Sogesic, which are in the province of Buenos Aires.
Under the PERMER program (Programa de Energías Renovables en Medio Rural), the
Argentinean government carries out bids for the supply of complete PV systems. In stages I and
II shall be established, for centralized purchasing, contracts for the supply of 862.11 kW (stage
I, with 9 lots) and 1,050.48 kW (stage II, with 10 lots), according to SEN (2010b, 2010c).
For large-scale applications, SEN et al. (2009) mentions the launch of a bid in 2009 for
a PV solar park of 1.2 MW in San Juan and bidding EE 01/2009 which is part of the project
GENREN, for contracting 10 MW of solar PV and 25 MW of CSP (ENARSA, 2009).
In relation to the solar PV plant in San Juan, effectively, Valente (2010) indicates
contracting of COMSA Argentina (part of the Spanish COMSA) to build the plant. According to
complementation by Pastor (2009), several technologies shall be used (amorphous silicon,
mono- and polycrystalline) to assess their suitability.
Furthermore, Diário de Salta (2009) mentions the launch of a generation project with
solar concentration for an initial 1 MW in the province of Salta, though there are no further more
recent indications.
Biomass
The main Argentine biomass resource used is sugar-cane bagasse. The identified
projects' survey indicates a potential of 422 MW (SEN et al., 2009). Projects for the conversion
of sugar mills total 156 MW, mainly in Tucuman and Salta (p.15). Asal et al. (2005) have found
a great potential for agro-forestry residue use, and the recovery of forest-industrial residues
would be made according to the gasification and combustion technology, if maintained the
technological trend of the projects identified in this study.
16
Except for the megaprojects of Dladema (Phase II), and Pico Gastre Truncated, which would expand
the wind installed capacity in Argentina to more than 17 GW.
In the EE 01/2009 renewable energy bidding, 54.4 MW in projects were offered using
biomass resources, but none for the use of urban solid waste (RSU). For this reason, the
supplementary bid EE 02/2010 MSW, specific for RSU, was launched to hire 120 MW. As for
contracting, a nominal power of 110.4 MW was contracted for thermal electric generation from
biofuels, with four projects, three from the company Nor Aldyl (76.4 MW) and one from company
Emgasud (34 MW) (ENARSA et al ., 2010).
Argentina is developing the Small Hydroelectric Program, which aims to conduct studies
to identify potential sites and promote the development of small-scale hydropower projects.
Thus, by identifying the many advantages of small hydroelectric (less required resources,
benefits of distributed generation, simplified authorization procedure), SEN (2008) indicates a
potential of 425 MW (with 80% concentrated in 35 projects - from a total of 116).
A survey by SEN et al. (2009) based on previous work (SEN, 2008) indicated the
existence of 480 MW in projects or identified potential for small hydroelectric exploitations (the
Argentine term for SHP). These are primarily located in isolated communities of the south,
which increases their interest due to increased competitiveness. However, only 30 MW are
under development, and in many cases it is still required the preparation of project and
environmental impact studies. Thus, the report estimates that it is possible to incorporate 100
MW in ten years.
The sketches of the "Plan of Action of Small Hydroelectric Exploitations" include only
the completion of an inventory of existing projects and facilities, examination of federal and
regional laws and the "selection and promotion of more feasible projects" (SEN, 2008, p.25) -
vague objectives for a national plan of action. Thus, the best estimate is still the one prepared
by SEN et al. (2009) of 100 MW in ten years. On bidding EE 01/2009, 10.6 MW of SHP projects
were offered, below the tender contracting limit for the source (60 MW), and all five projects
were contracted (ENARSA et al., 2010).
Geothermal energy
The existing geothermal exploitations in Argentina are used until now only for heat
recovery.
Additionally, the bidding process for the Copahue plant in the Las Melizas geothermal
field, has already been finished, with the Canadian company Geothermal One being selected.
The company shall also build the transmission line for the project, which will generate 230 GWh
per year (Neuquén, 2010 ). In addition, the company Andina Geothermal signed a contract with
the state company Energía Provincial Sociedad del Estado to build a geothermoelectric plant of
5 MW in the Valle del Cura field, with operations scheduled for 2011, if the geothermal resource
is found appropriate (San Juan, 2009).However, it should be noted that the proposed deadlines
for implementation of the project are ambitious, and delays must not be discarded.
Currently, Argentina has an experimental plant for producing hydrogen through wind
source, the Pico Truncado (2.4 MW) plant. As mentioned, there is a project for generation of
hydrogen through Diadema's 16 GW giant wind farm, but progress is uncertain. According to
SEN et al. (2009) in Argentina electrolyzers are not manufactured to produce hydrogen, and
only academic research groups exist.
No specific information was found on how to connect the generation from renewable
sources to the basic network, nor on the need to expand the network in order to interconnect
plants, since there is no Argentine medium or long term plan, at least available, for the electric
system expansion (even if only indicative).
3.1.5 BRAZIL
CSP 195 1
1000 2,
Solar PV
2000 3
29000 2 ;
3000 3000
2; 3; 4111 6; 30000 3;
Biomass 4170 4 8521 5 27400 7 40900 7
7421 5 ; 3106 6 13900 7 6829 6 ;
20700 7
1000 3 ; 10002; 6000 7 ; 4000 2;
16600 8;
Wind 1423 4; 4441 5 ; 1423 4 6041 5 7800 8; 15000 7 ; 44000 7 116000 7
10200 9
3000 8; 2400 9 63009 5000 3 ;
Geothermal 03 03
Oceans 03 03
6066 5;
SHPs 5566 5; 7734 4 6966 5 3330 10 7769 10
7734 4
1 2 3
Notes: Greenpeace and ESTIA (2003); Reference scenario (IEA, 2006); Alternative policies scenario
4 5 6
(IEA, 2006); EPE (2009a); EPE and MME (2010); Surplus electric power generation from biomass of
7
the sugar-cane/alcohol industry (EPE, 2007a); Energy Revolution Scenario (Greenpeace and EREC,
88 9 10
2007); Reference scenario (IAEA et al., 2006); Shift scenario (IAEA et al., 2006); EPE (2007b)
At the end of 2008, Brazil had an electricity generation installed capacity of 103,962 MW
(ESE, 2009b) and a renewable sources installed capacity, excluding large UHEs, of 5207 MW
(ESE, 2009a). Table 23 shows the installed capacity in Brazil per source in 2008.
Year 2008
(MW) Solar PV Solar Thermal Wind Biomass SHP Hydroelelectric1 Thermal2 Nuclear Total
1
Notes: The National Energy Balance 2009 does not break apart the installed capacity by type of
2
hydropower for electricity generation, which is supposed to include SHPs; The National Energy Balance
2009 does not break apart the installed capacity by type for thermal electricity generation, which is
supposed to include biomass power plants.
In Brazil there are two types of official projections: one for medium term and a long-term
one. The medium term is the Ten Year Energy Plan (Plano Decenal de Energia-PDE), updated
annually with a planning horizon of 10 years and major planning study of the Federal
Government for the sector. The long term is the National Energy Plan (Plano Nacional de
Energia-PNE), with 25 years horizon, with the first one published in 2007 with the horizon until
2030, and the next shall be published in 2010 or 2011 with horizon until 2035.
The country also has the Incentive Program for Alternative Sources of Electrical Energy
(Programa de Incentivo às Fontes Alternativas de Energia Elétrica-Proinfa), whose first phase
determined contracting of 3,300 MW by Eletrobrás, equally distributed among 3 generation
sources: wind, biomass and SHPs. After two public calls - the first public call held in October
2004 and in December 2004 ended the biomass projects qualification process for the second
public call - were contracted 1,101.24 MW, 1,422.92 MW and 685.24 MW, respectively, of
SHPs, wind, and biomass thermal plants, which according to Law no. 11,943 as of May 28,
2009, shall come into operation until December 30, 2010 (it is noteworthy that the deadline was
initially set to December 30, 2006). Once the goal of the first phase is achieved, the program
envisages a second phase in which these alternative sources must meet within 20 years, 10%
of national annual consumption of electricity. However, the second phase of Proinfa is now
For the purposes of this paper, the recently published PDE 2010-2019 is used, as
presented below.
The installed capacity annual growth rate of SHPs, UTE and wind plants is,
respectively, 6.6%, 6.64% and 25.33% between 2010 and 2015 (Table 24). The installed
capacity foreseen for 2015 of wind farms, biomass thermal and SHPs are, respectively, 4,441
MW (3.15% share), 7,421 MW (5.27%) and 5,566 MW (3.95%). Figure 7 presents these
contributions for 2015 and 2019.
Table 24: Annual growth rate by source according to the PDE 2019
17
In the chapter on policies and programs to encourage renewable alternatives further details about
Proinfa will be presented.
18
The plan incorporates the results of auctions to buy energy promoted untill December 2009 and deals
only with the National Interconnected System (Sistema Interligado Nacional-SIN), incorporating the
isolated systems that will be interconnected within the study horizon.
Table 25 shows the installed capacity evolution for different power generation sources
throughout the study period (2010-2019).
For the Plan period (2010-2019), it is forecasted the entry of 33.53 GW of UHEs, 1.4
GW of nuclear generation, 9 GW of UTE (except thermonuclear) and 10.67 GW from renewable
sources, an additional total of 54.62 GW. The plan started from an installed capacity of 112.45
GW at the end of 2010.
Looking specifically at renewable sources, it can be noted that the Plan envisages an
installed capacity of nearly 11 GW from biomass, SHPs and wind power in 2019. Wind power
will have 5,241 MW in 2017, well above the 1,423 MW capacity foreseen by the PDE 2007-
2017 for the same year. It is noteworthy that between 2011 and 2012, there is a growth forecast
of 125.7% in wind power installed capacity due to the entry into operation of the 1.8 GW
contracted in the 2nd Energy Reserve Auction held in December 2009 and with the operation
start scheduled for 2012. For 2019, the PDE 2019 forecasts 6,041 MW wind generation
installed capacity, which is quite shy since the plan forecasts an annual growth of only 400 MW
Table 25: Evolution of installed capacity per generation source (MW), 2010-2019
Source: 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
Hydro (a) 83169 85483 86295 88499 89681 94656 100476 104151 108598 116699
Uranium 2007 2007 2007 2007 2007 3412 3412 3412 3412 3412
Natural gas 8860 9356 9856 11327 11533 11533 11533 11533 11533 11533
Coal 1765 2485 3205 3205 3205 3205 3205 3205 3205 3205
Fuel oil 3380 4820 5246 8864 8864 8864 8864 8864 8864 8864
Diesel 1728 1903 1703 1356 1149 1149 1149 1149 1149 1149
Process gas 687 687 687 687 687 687 687 687 687 687
SHP 4043 4116 4116 4516 5066 5566 5816 6066 6416 6966
Biomass 5380 6083 6321 6671 7071 7421 7621 7771 8121 8521
Wind 1436 1436 3241 3641 4041 4441 4841 5241 5641 6041
Total (b) 112455 118375 122676 130774 133305 140935 147605 152080 157628 167078
(a) (b)
Note: Includes the estimate import of Itaipu UHE not consumed by the Paraguayan electric system.
Does not consider self-production, whereas for energy studies, this is represented as a load reduction.
The PNE 2030 study, published in 2007, was made by the EPE together with the
Research Center for Electric Energy (Centro de Pesquisas de Energia Elétrica -CEPEL) and
other Ministry of Mines and Energy (Ministério de Minas e Energia –MME) participants (being
coordinated by MME's Secretariat of Energy and Development Planning). The PNE 2030
considered four energy scenarios: A, B1, B2 and C, each one having a different annual rate of
GDP growth, energy and electricity consumption.
From the PNE 2030 capacity information for SHPs, alternative wind farms, and thermal
units (RSU and sugarcane biomass) can be obtained, respectively, 1,769 MW, 1,382 MW and
1,821 MW in 2015, and 7,769 MW, 4,682 MW, 7,871 MW in 2030.
Thus, the installed capacity of renewable sources in the Brazilian electricity matrix shall
have a share of 3.64%, -1.29% of SHP, 1.01% wind and 1.33% of bioelectricity - in 2015 and
9.04%, - 3.45% SHP, 2.08% wind and 3.50% of bioelectricity - in 2030. The increase in installed
capacity between 2005 and 2015 for SHPs, wind farms and alternative UTE (RSU and
sugarcane biomass) will be 1,191 MW, 1,353 MW and 1,565 MW, representing 2.79%, 3.17%
and 3 67% of additional capacity over the forecast period. The increase in installed capacity
between 2005 and 2030 for SHPs, wind farms and alternative UTE (RSU and sugarcane
biomass) will be 7,191 MW, 4,653 MW and 7,615 MW, representing 5.50%, 3.56% and 3 82%
The installed capacity expansion until 2030 including the 2005-2015 and 2015-2030
periods are presented in Table 26.
Table 26: Long-Term Electricity Supply Expansion, per Generation Source (MW)
Installed Capacity
Source:
2020 2030
Sugar cane
2971 6571
biomass
Table 27 presents a comparison between PNE 2030 and PDE 2019. Despite the short-
term sector planning presented by the PDE 2008-2017 has taken distance from the long-term
planning (PNE 2030), the PDE 2010-2019 resumed participation of renewable sources in the
Brazilian electric matrix, particularly after 2013, when fossil sources stagnate and generation
expansion of will be based solely on hydro, biomass and wind sources.
PDE 2010-2019
PNE 2030 (MW)
(MW)
Although the corresponding ten-year periods are different (2005-2015 in the case of
PNE 2030 and 2010-2019 for the PDE), for comparison purposes, it is important to notice an
increase in the participation percentage of alternative sources in relation to the total installed
capacity expansion forecasted by the plans. In the PNE 2030, biomass thermals, wind and
SHPs plants have an installed capacity in 2015, respectively, of 1,821 MW, 1,382 MW and
1,769 MW, well below the expected installed capacity foreseen by PDE 2019 for the same
sources in the same year (5,566 MW for SHPs, 7,421 MW for biomass, and 4,441 MW for wind
sources).
In the PNE 2030, alternative sources (biomass thermals, wind, and SHPs) account for
9.63% of the planned expansion between 2005 and 2015. In the PDE 2010-2019 these sources'
share represents 19.53% of the planned expansion between 2010 and 2019. Figure 9 presents
the percentage, per source, of installed capacity for electric generation in 2015 and 2020
according to the PNE 2030, and shows that the PNE 2030 projected for 2015 a higher large
sized hydroelectric installed capacity than expected to the same year by the PDE 2019, while
renewable sources have a much lower percentage share.
Figure 9: Installed capacity per source for electricity generation in 2015 and 2020 according to the PNE 2030
There are several studies showing projections for the national energy matrix pointing
out that it is possible to increase the share of renewable sources and, at the same time, have a
more efficient use of electricity. Table 28 summarizes works' information: The World Energy
Outlook 2006 (IEA, 2006), Brazil - A Country Profile on Sustainable Energy Development (IAEA,
2006) and energetic [r]evolution - Perspectives for a global sustainable energy (EREC and
Greenpeace, 2007), which point to the possibility of a greater use of renewable sources in
cases where there is a concentration of efforts (policies, legislation, mechanisms, fiscal and
economic incentives, among others) for their promotion.
Table 28: Scenarios for renewable sources in 2015, 2020 and 2030
Shift Scenario (GW) Reference Scenario (GW) Alternative Policies and Energy Revolution Scenarios (GW)
Biomass N.A. N.A. 3** N.A. 5** 3** 13.9*** 5**; 20.7***
Wind 2.4* 6.3* 3*; 1** 7.8* 4** 1** 6*** 5**;15***
Geothermal N.A. N.A. 0** N.A. 0** 0** 0*** 0**; 0***
Ocean N.A. N.A. 0** N.A. 0** 0** 0*** 0**; 0***
Source: * IAEA (2006); ** IEA (2006); *** EREC and Greenpeace (2007)
Renewable Sources
Wind energy
In the first Alternative Sources Auction, held in June 18, 2007, no wind project has been
contemplated (eight projects attended the event, but were not considered able to participate).
In the second Reserve Power Auction, specific for wind power, held in December 14, 2009,
1,805.70 MW were contracted, with operation startup scheduled for 2012. In the second
Alternative Sources Auction, held in August, 25 and 26, 2010, 2,047.8 MW in wind projects
were contracted, with operation startup scheduled for 2013.
The Brazilian Wind Power Potential Atlas, launched in 2001, and prepared when the
existing largest turbines were near 2 MW, while they presently exceed 6 MW, highlighted a
potential of 143 GW. However, according to preliminary results of the new Brazilian wind atlas,
still under development, the Brazilian wind potential exceeds 250 GW (Ecol News, 2010).
SHP (≤ 30 MW)
In Brazil, the main incentives given for insertion of SHPs in the Brazilian electrical matrix
were given by Proinfa and by the alternative sources auctions. Proinfa contracted a power of
1,191.24 MW, which deadline for operation start is December 2010. In the 1st and 2nd
Alternative Sources Auctions were hired, respectively, 96.74 MW and 131.5 MW in SHPs, with
startup set for 2010 and 2013. The SHPs' installed capacity in 2010 is 4,043 MW (EPE and
MME, 2010).
The country has a great potential in using biomass for electricity generation, especially
from sugar cane bagasse. The PNE 2030 recognizes this potential and forecasts a greater
participation of this source in the electric matrix.
Some explanations have been suggested: the economic situation that the market was
living at that time, the very attractive values prevailing in the international sugar market, making
mill owners prefer to invest in a business that was already technologically dominated, instead of
getting under Proinfa; the economic value established for biomass was considered relatively
low; uncertainty among investors, with regard to how much investment would be needed to
produce the energy to be delivered to the network; the requirement that the entrepreneurs meet
all the criteria presented in to license each source, i.e., submit documents for legal, fiscal,
19
economic, financial and technical homologation , among others (Martins, 2010).
st nd
However, the 1 Energy Reserve Auction and the 2 Alternative Sources Auction have
contracted a potential above the Proinfa initial provision, ensuring greater insertion of the source
in the national electricity matrix, as shown in Table 29.
Table 29: Specific auctions for renewable sources that contemplated biomass
2009 229.5
1st Reserve Auction 14/Aug/2008
2010 2149.9
Technological advances have increased the prospect of greater efficiency in the use of
bagasse and straw for electricity generation. The greatest potentials are in the existing plants
retrofitting steam generation plants, still concentrated in steam turbines operating at 22
bar/320°C (systems that only enable self-sufficiency in electricity supply) and 42 bar/420°C
(which allow the generation of a modest electric surplus). It is verified that the national most
modern systems of steam turbines currently sold to the sugar cane industry are turbines
operating with steam input at 65 bar and 490 °C and with condensation systems, controlled
extraction and back pressure (CGEE, 2010).These systems allow the production of surplus
electricity.
The reasons often given by the area experts for low utilization of retrofits is the high rate
of return on investment applied in the sugar-alcohol sector, often preferring to invest in new
19
The difficulties of attaching numerous certificates especially regarding labor aspects, considering the
large number of formal and informal manpower associated directly or indirectly to agricultural and
industrial production of sugar and alcohol, are cited as a factor in the lack of interest by the sugar cane
industry (Martin, 2010).
In the second Alternative Sources Auction there were no retrofits contracting, a source
where lies the great bioelectricity potential. To some experts the shy biomass results in the
second Alternative Sources Auction entails from persistent connection to the net, finance and
taxation problems, which, in turn, lead to a dismantling of the national industry of goods and
equipment for bioelectricity (PCH Portal, 2010).
The PNE 2030 considers that the technology most likely to be used for electricity
generation using sugar cane biomass is the steam cycle with backpressure turbines, more
efficient than the current steam cycle used. However, the operation still uses this technology,
restricted to the period of sugar/ethanol production (during the harvest). The cycle with
condensation and extraction, which is independent of the harvest period (but requires access to
major water sources) shall gain ground from 2020 onwards, but will remain a minority. With
these assumptions, it is estimated a surplus generation capacity of 6,830 MW in 2030, "of which
2,480 MW associated to the processing capacity of 2005" (ESE, 2007b, p.186).
For RSU, the estimate is 17.55 GW likely to be installed until 2030. Thus, "It was
considered that the energy exploitation of RSU would be a large scale alternative after 2015"
(EPE, 2007b, p.189). The potential of the rice sector is 200 to 250 MW at current production
level, and silviculture (forestation) falls between 1,434 and 2,867 MW.
Table 30 illustrates the capacity to generate surplus electricity from sugar cane/alcohol
biomass industry in accordance to the PNE 2030.
Table 30: Regional distribution of surplus electric power generation capacity from the sugar cane/alcohol sector
biomass according to thermal-electrical generation technologies employed in expansion and retrofitting in the
sugar cane industrial sector in Brazil - MW
North 5 6 10
Geothermal energy
From Jannuzzi et al. (2008) is obtained that geothermal sources in Brazil are found
between 400 and 1,500 meters deep and that the absence of volcanic regions in the Brazilian
territory explains the low temperatures of the sources.
A survey by the Institute for Technological Research of São Paulo shows that Brazil
hides underground an energy potential estimated at 3 GW. A source such as the one at
Presidente Prudente (63 º C at 1400 meters deep) can reach 5 MW (Jannuzzi et al., 2008).
Solar PV
The use of PV systems in Brazil is largely applied in isolated areas without access to
the electric network. Much of the existing systems in the country were installed through the
Program for Energy Development of States and Counties (Programa para o Desenvolvimento
da Energia nos Estados e Municípios -PRODEEM), in existence since 1994 and linked to the
MME, for applications in water pumping, street lighting and collective energy systems (schools,
clinic and telephone stations, community centers).
Systems in operation connected to the network between 1995 and January, 2010,
totaled only 171.32 kWp, being mostly for research purposes (Zilles, 2010).The work group
established in 2008 under the MME is finalizing a set of public policy proposals for creating a
market for PV systems connected to the network.
Despite the PNE's 2030 consideration that solar PV will remain restricted to isolated
systems, except if a significant drop in installation prices occurs, the elaboration of the PNE
2035 is already considering solar PV as a source that will get some penetration in the plan
horizon.
While there are no national policies in this direction, some States are taking their own
initiative, as is the case of Ceará. It was granted by the Brazilian Agency of Electrical Energy
(Agência Nacional de Energia Elétrica-ANEEL) the construction in Tauá (Ceará) of the first
21
plant to generate solar PV for commercial use in the country with 5 MW of power, greatly
increasing the installed capacity of Grid-Connected PV Systems (Sistemas Fotovoltaicos
Conectados à Rede-SFCRs) in Brazil (Souza, 2010).
In the chapter on incentive institutions for renewable sources and in the chapter on
incentive policies, this initiative will be approached once again, since the plant will benefit from
the creation of the Investment Fund on Solar Energy (FIES - Fundo de Investimento em Energia
Solar) by the Government of the State of Ceará.
In Brazil ocean energy is still an incipient area. There are few investments and low
priority in the sector, but there are important seminal initiatives underway, such as the
installation of a tidal power plant at Pecém's breakwater of the Multiple Utilities Terminal, of the
Industrial Complex and Harbor (Pecém-Ceará) with expected installed capacity of 100 kW The
plant shall operate for three years for assessing the technology that takes advantage of wind
regularity and frequency of waves on the coast of Ceará for energy generation (IAC, 2010).
20
Direct use is with heat exchange pump, system generally used for heating homes and commercial
buildings. That is, the Brazilian potential for indirect use of geothermal energy (as for electricity
generation) is minimal.
21
The plant will have, initially, a capacity of 1 MW, involving investments of about R$ 10 million, with
support from the Interamerican Development Bank (IDB), and will be expanded to 5 MW. Initially, MPX
foresaw for a 50 MW solar power plant, costing $ 250 million, which was considered expensive by
investors. According to the company, expanding to 50 MW will depend on the cheapness of the
equipment. In an attempt to reduce equipment costs, the State Government is working to attract
manufacturers of solar panels to Ceará and plans to create a center for solar energy in the region of
Inhamuns (Souza, 2010).
This is a technology that has been receiving substantial investment in some countries in
the world with specific conditions of solar irradiation, as is the case of Spain, the United States
and countries in northern Africa.
In Brazil it is incipient. It is expected the construction of the solar thermal power plant of
Coremas (Paraíba), with a generating capacity of 50 MW. In the chapter on incentive
institutions for renewable sources this initiative will be addressed again.
Brazil does not have any official projection on generating electricity from solar
concentrators.
Study by Greenpeace projects for 2015 and 2020 the installed capacity and annual
electricity generation for the country by CSP, since incentivized (Table 31). The scenario made
by Greenpeace and Estia is based on improvements to the CSP technologies and on an
increasing number of countries supporting this technology. However the study does not provide
more detail on the assumptions adopted for the preparation of scenarios.
Table 31: Projection of installed capacity and electricity generation from solar thermal concentrators
The work consists of five parts: fundamentals of solar thermal electricity; technology,
costs and benefits; the global solar thermal market; the future of global thermal electricity and
policy recommendations.
This project will modify the terms and the generation logic in the region because it will
allow the implementation of relatively large projects in countries that will not depend on their
22
http://www.eprsiepac.com/descripcion_siepac_transmision_costa_rica.htm
Central America is a region where the use of renewable energy for electricity generation
has always been higher than the use of fossil fuels, but the increasing participation of these
made the capacity of centrals operated with fossil fuels to exceed the hydroelectric production
In 2008, electricity generation in the region reached 39.399 GWh, of which 63% came
from the exploitation of the main renewable sources: hydro, biomass, geothermal and to a
lesser extent, wind. Other 37% were generated using hydrocarbons (CEPAL, 2009).
In the analysis by country, there are significant differences: Nicaragua and Honduras
have a high dependence on the use of oil for electricity generation, which is higher than 60%. El
Salvador, Guatemala and Panama, use fossil fuels to generate electricity at a rate that varies
from 35% to 45%. On its turn, Costa Rica depends on the plants that operate on fossil fuels to
generate only 7% of its electricity (CEPAL, 2009c).
The share in total production by country shows that Costa Rica and Guatemala are the
countries with the largest electricity generation with 24% and 20% respectively, followed by
Honduras with 17%, Panama with 16%, El Salvador with 15% and finally, Nicaragua with 8%
(Figure 10).
Panamá Guatemala
16% Honduras 20%
17%
Figure 10: Electricity generation in Central America, percentage share per country, 2008
With regard to installed capacity, in 2008 Central America had 10,223 MW installed,
being 46% supplied by thermoelectric plants using fossil fuels, 42% by hydroelectric, 5% by
geothermal, 7% employing co-generation and 0.7% using wind turbines (Figure 11).
Hydropower plants
45,8%
Geothermal plants
41,9%
With regard to the installed capacity using renewable sources, more than 84% are
hydro, around 7% are biomass and a little less than 5% are geothermal. A relatively minor
amount derives from wind power plants, which are all installed in Costa Rica (Table 32).
Table 32: Installed capacity using renewable energy in Central America, 2008
To meet the future demand several options are considered: gas turbines, medium-
speed engines, combined cycle and coal thermoelectric plants. As renewable energy sources
hydraulic and geothermal units are considered (CEAC, 2009).
The design capacity of renewable sources in the region, according to each country
official sources, is just over 1,000 MW, of which 77% employ hydropower, 10.5% employ wind
power, 10% comes from biomass and the remaining 2.5% from geothermal sources (Table 33).
(1) Design capacity (2008). Statistical Report of the Administrator of the Wholesale Market in
http://www.infoiarna.org.gt/media/file/areas/energia/legislacion/Politica%20Energetica%202008-2015.pdf;
Renewable Sources
Wind energy
Costa Rica and Nicaragua are the only countries that in late 2009 had wind power
generation: respectively, 95.6 MW and 40 MW (CEPAL, 2009).
In terms of wind energy development potential in the region, estimates made by the
programs of Resource Assessment of Solar and Wind Energy (Solar and Wind Energy
Resource Assesment, Global Environment Facility) and by the United Nations Environment
Program indicate that there is an area of 12,969 km2, with moderate wind potential, with the
exception of Nicaragua, where there is a considerable wind power potential of more than 400
2
W/m (CEPAL, 2007).
SHP
In end of 2008, the installed capacity of hydroelectric power in Central America was
4,270 MW, which produced about 42% of the region electricity (CEPAL, 2009).
In the region there is still significant potential for hydropower generation, which was
estimated at 22,000 MW, of which only 19% have been explored so far, i.e., there are still
almost 18,000 MW that could be used (Table 34).
Panama, Costa Rica and Guatemala are the countries that are in better position to
generate hydroelectricity, as they have a higher number of hydroelectric projects under
construction, concession, licensing and with completed feasibility studies. El Salvador began
construction of a hydroelectric project of medium capacity, while Honduras and Nicaragua have
good expectations, due to recent calls for tender, concessions and contract awards (CEPAL,
2009).
Biomass
In terms of potential, it is estimated that there are 27 plants that could produce 1,200
GWh (CEPAL, 2009). By its turn, a study on the supply and consumption of biomass has been
done in Costa Rica, which showed a potential capacity of 635 MW for electricity generation
(MINAE, 2007).
Geothermal energy
Although to a lesser extent, Central America has played an important role in the
development of geothermal energy in the world. El Salvador uses geothermal energy to
generate electricity since 1975 and today it is an important alternative source of electricity
generation in the region, representing approximately 5% of total installed capacity and
generating 8% of energy in the region.
23
By one side, the relatively small size of the possible uses and, on the other, the high fixed costs and
uncertainty associated to exploitation, raise the price of their possible development.
Panama 0 40 40
However, its usage potential is good. Estimates made by the solar and wind program
(Solar and Wind Energy Resource Assesment, Global Environment Facility) of the United
2
Nations Indicates that the values of insolation in the region are in the range of 4-7 kWh/m per
day (ECLAC, 2007).
In turn, market studies from the World Bank for PV systems in rural areas of Honduras
and Nicaragua, have identified potentials of 51 MW and 34 MW, respectively. Likewise, it is
estimated that the region may have potential for rural solar applications of nearly 250 MW
(CEPAL, 2007).
10 2;10 3;10 4; 550 5; 970 8; 0 210 2 ; 210 3; 476 1; 650 5; 1014 6; 974 7;
CSP 750 5; 011 1000 5; 011
195 8 11 250 4 011
3802; 4203;
4612; 5013; 4761; 26935; 1286 9; 3880 5; 4972 5;
Biomass 3002; 3143; 4004 6454; 17425;
903 4 100011 100011 100011
100011
2404 10;1905 1;
3302; 9983; 178715; 235745;
Wind 61225; 100011 12245 5; 2894 9; 62246;
12004 300011 300011
200011
14212; 16533;
SHPs 6162 ; 6763; 6754 4761; 10136
18504
1 2
Notes: UTFSM scenario (Plataforma Escenarios, 2010); Conservative scenario (Universidad de Chile et
3 4
al., 2008); Dynamic scenario (Universidad de Chile et al., 2008); Dynamic-plus scenario (Universidad de
5 6
Chile et al., 2008); Energetic Revolution scenario (Greenpeace and EREC, 2009); Chile Sustentable
7
scenario (Plataforma Escenarios, 2010); Ecosystems scenario (Plataforma Escenarios, 2010);
8 9 10
(Greenpeace and ESTIA, 2003); Mainstream scenario (Plataforma Escenarios, 2010); Universidad
11
Adolfo Ibáñez scenario (Plataforma Escenarios, 2010); Reference scenario (Greenpeace and EREC,
2009).
The Chilean electric matrix has an important share of fossil fuels, which accounts for
60% of the national energy matrix (CNE and GTZ, 2009, p.25).
Chile has four interconnected electrical systems. In December 2007 the Great Northern
Interconnected System (Sistema Interconectado do Norte Grande -SING) owned 28% of the
installed capacity in the country and attended to only 5.8% of the population, being its
generation predominantly thermal and focused on the mining industry. In the same year, the
Central Interconnected System (Sistema Interconectado Central -SIC) had 71% of the installed
capacity in the country and attended 90% of the population; the Aysen electrical system
corresponded to 0.4% of the national installed capacity and the Magallanes electrical system
corresponded to 0.6% of the national installed capacity.
The Chilean energy sources are very limited. Own oil covers less than 10% of the
country needs, coal is of low quality, and the significant hydropower reserves are away from
Santiago, the main load center of the country (Barroso et al., 2009, p.18). All these features
have made the Argentinean natural gas, a cheap and abundant alternative, resulting in an
energy integration protocol signed in 1995 between the two countries (Barroso et al., 2009).
This situation increased the Chile's dependence on Argentina's natural gas. The
scenario was complicated irreversibly since 2004, when the Secretariat of Energy of Argentina
passed Resolution 659/2004, which authorized natural gas to supply mainly domestic market in
In August 5, 2005 the Argentine government imposed a rationing reducing by 59% the
total volume of gas exported to Chile. In May 17, 2007 restrictions reached their most critical
point reaching 64% of total exports, which resulted in a reduction of 14.1 million cubic meters of
product, while the daily imports from Chile were at 22 million cubic meters (Universia, 2007).
Due to the energy crisis experienced in Chile during the years of 2004 and 2005 a
reform in the electricity sector for regulation of generation and transmission segments was
made. The high share of hydroelectricity and reductions in Argentine natural gas have created a
risky environment for investment in new generation capacity, mainly due to the volatility of the
spot market.
Figure 12 shows the evolution of the main sources of power generation in the SIC and
SING, including natural gas.
The installed capacity of renewable sources, excluding large hydropower plants, was
345 MW in late 2008 and accounted for 2.63% of national installed capacity (Table 37).
(MW) 2008
Solar PV Solar Thermal Wind Biomass SHP ( <20 MW) Hydro Thermal Total
In spite of Chile not having government expansion plans including projections for
generation from renewable alternative sources, the government, through the National Energy
The main regulatory mechanism for encouraging renewable sources in Chile is based
on the quota system and was created by Law 20.257. This law stipulates that 10% of the energy
sold in the SIC and SING in 2024 are derived from renewable alternative energy sources. The
new government's target, although without any official policy to such end, is to achieve 20% of
the total energy capacity from renewable sources by 2020, implying annual installation of 500
MW of clean energy in the next decade (ACERA, 2010)
Following are some studies done by NGOs, foundations and academic institutions, in
which are presented projections and scenarios for renewable and alternative sources in Chile.
The study carried out by Studies and Research Energy Program of Public Affairs at
Chile University and Nucleus Industrial Electronics and Mechatronics of Center for Energy
Innovation at the Technical University Federico Santa María estimates the potential of
unconventional renewable energy sources (energías renovables no convencionales-ERNC) in
Chile between 2008 and 2025 considering the electricity market operation under the current
regulatory framework and a market economy environment. The provisions of the new ERNCs
law establishing mandatory targets for generation companies were considered, which should
ensure that, from 2010 onwards, 5% of the electricity supplied to distributors and customers
comes from ERNCs, increasing the percentage by 0,5% per year from 2015 till 10% in 2024
(Universidad de Chile et al., 2008).
The study developed three scenarios: conservative, dynamic and dynamic-plus. Each
one had different assumptions about the price of energy and its increase. Table 38 presents
the economic and technically feasible capacity in the SIC according to the scenarios developed
for the period between 2015 and 2025.
Sources Scenarios
SHP 616 676 675 1065 1198 1281 1421 1653 1850
Geothermal 130 130 130 355 485 500 810 940 1400
Wind 118 298 440 218 618 800 330 998 1200
Biomass 300 314 400 380 420 645 461 501 903
Total 1178 1432 1659 2148 2851 3396 3332 4402 5753
Figure 13 shows the share evolution of each source in the SIC according to the
developed scenarios and shows the gain of importance mainly of geothermal, solar PV and
CSP sources.
Figure 13: Evolution of installed capacity (MW) of renewable sources in the SIC between 2015 and 2025 for each
scenario
The study is based on two scenarios: the reference and energy revolution (Greenpeace
and EREC, 2009).
The Energy Revolution scenario was built in order to stabilize emissions in the energy
sector in Chile until 2020 and reduce emissions by 21% in 2050. The Energy Revolution
scenario is characterized by significant efforts for energy efficiency in order to fully exploit its
potential, and use all cost effective renewable sources to generate heat, electricity and produce
biofuels.
Ocean energy is the only alternative and renewable source that does not appear on the
horizon by 2050 in the Energy Revolution scenario. In spite of solar PV and CSP energy not
appearing until 2050 in the reference scenario, the participation of both is anticipated for 2020 in
the Energy Revolution setting. During the period, wind energy is the fastest growing renewable
source in participation.
Reference Scenario
Total generation 17 27 37 48 59
Renewable 8 11 14 17 22
Hydroelectric 8 9 11 13 16
Wind 0 1 2 3 3
PV 0 0 0 0 0
Biomass 0 1 1 1 1
Geothermal 0 0 0 0 1
Solar Thermal 0 0 0 0 0
Oceans' energy 0 0 0 0 0
RE Scenario
Total generation 18 29 37 44 54
Renewable 8 21 30 40 52
Hydroelectric 8 9 9 9 9
Wind 0 6 12 18 24
PV 0 4 5 6 8
Biomass 0 2 3 4 5
Geothermal 0 0 2 3 4
Solar Thermal 0 1 1 1 1
Oceans' energy 0 0 0 0 0
With the aim of contributing to a realistic and serious discussion around the Chilean
energy matrix, Empresas Eléctricas A.G., Fundación AVINA-Chile, Fundación Futuro
Latinoamericano, Fundación Chile and Universidad Alberto Hurtado have organized the
The seminar's key input is the discussion of different scenarios for electricity generation
in 2030, resulting in the scenarios: Chile Sustentable, Ecosystems, Mainstream Renewable
Power, Universidad Adolfo Ibanez and Universidad Técnica Federico Santa María, all centered
in the Chilean SIC and prepared respectively by NGOs Chile Sustentable and Ecosystems, by
the English group Mainstream Renewable Power and universities Universidad Adolfo Ibáñez
and Universidad Técnica Federico Santa María.
During the seminar the "Plataforma Escenarios Energéticos-Chile 2030" was launched,
for the joint construction and open discussion of different scenarios for electricity generation in
2030 (EI, 2010).
Wind 2404 (onshore) 2894 (onshore) 779 (onshore) 6335 (onshore) 1905 (onshore)
2027
Geothermal 437 (hydrothermal) 1608 (steam) - 952 (hydrothermal)
(hydrothermal)
1168 (ethanol
Biomass - 1286 760 (BIGCC 25) 476
CCGT 24)
Hydro ERNC
- - - 1.013 476,22
(<20MW)
Renewable Sources
Wind energy
The proven potential of wind energy in Chile is 6,000 MW (Mocarquer, 2009), but one
can find a wind potential of up to 10,000 MW (Oliva, 2008).
Between 2008 and 2009, Chile had the largest increase in installed capacity for wind
generation in Latin America and the Caribbean, corresponding to 740% (increased from 20 MW
in late 2008 to 168 MW in late 2009). Its wind generation installed capacity falls only behind
Brazil and Mexico in late 2009 (GWEC, 2010a). Despite the relatively low participation of wind
24
CCGT: Natural Gas Combined Cycle.
25
BIGCC: Integrated biomass gasification by combined cycles.
In CNE and GTZ (2009), it is possible to obtain the approved environmental impact
studies for wind projects totaling 1,344.35 MW (as of August 31, 2009).
SHP (≤ 20 MW)
The potential for exploitation of hydropower generation through SHPs in Chile is still
very little studied since large projects have been prioritized (Oliva, 2008).However, the proven
and known potentials by the CNE in July, 2009, were 2,600 MW (Mocarquer, 2009).
In CNE and GTZ (2009), one obtains that the approved environmental impact studies
for generation of electricity from SHPs amounted to 258.41 MW in August 31, 2009, reflecting
the small use of this source in the country.
Biomass
In July 2009 biomass had a known and proven potential of 1,000 MW by CNE
(Mocarquer, 2009), but in 2007 the installed power plants for electricity generation from biomass
and in operation totaled only 190.9 MW (UTFSM, 2008a ). All plants installed until this year
used black liquor from the pulp and paper industry, or forest residues as fuel.
The environmental impact studies approved for electricity generation from biomass
amounted to 112.6 MW in August 31, 2009 (CNE and GTZ, 2009).
Biomass sources that have the highest gross exploitation potential in Chile are biogas,
industrial waste and forest management of native forests (UTFSM, 2008a). However, the main
difficulty pointed for the resource use is its distributed location and transportation. As for
electricity generation, biomass competes with other uses such as biofuel production (UTFSM,
2008a).
Geothermal energy
Geothermal Power, in July 2009, had a known and proven potential of 2,000 MW
according to the CNE (Mocarquer, 2009). However, studies show that the Chilean geothermal
potential could reach between 3,500 MW and 7,000 MW (MCH, 2010a).
The Government of Chile, through the Ministry of Mines, started a bidding in June 2009
to grant concessions of 20 geothermal exploration areas. Figure 14 illustrates the areas that
participated in this bidding, totaling 766,800 hectares. During the geothermal bidding process
59 exploration project offers were received, which granted to 9 companies the 20 concession
areas. The process ended in August 24, 2009 (AreaMinera, 2009). More recently, in January
2010, another public bidding process was held awarding the grant of 17 areas for geothermal
exploration to 7 groups.
According to MCH (2010a), Chile could account with at least 500 MW of installed
capacity to generate electricity derived from geothermal energy by 2014.
Chile has 50% of its territory located in the sunbealt, i.e., it is located between 35
degrees north latitude and 35 degrees south latitude (UTFSM, 2008b, p.38). Figure 15
illustrates the direct solar radiation in the world and shows that Chile has one of the world's
highest potential for solar CSP energy (as this technology only uses direct solar incident
energy).
Table 41 presents the global solar radiation in various regions of the country.
In December 2009 the Chilean government has presented the base of the bidding
contest for the establishment of a 500 kW PV plant in San Pedro de Atacama, Region II
27
(Antofagasta) and a CSP plant around 10 MW, which shall connect to the SIC or SING, in the
28
Great North of Chile . The event was attended by over 130 representatives from national and
international companies (CNE, 2009b). The company that wins the tender for building the PV
plant will be the one that requires the lowest subsidy, since the plant size is preset, and the
winner of the bid to build the CSP plant will be the one that provides a greater energy
production for the total amount of subsidy available. Subsidies amount to US$15 million for both
plants provided by the Corporation for Production Development (Corporación de Fomento de la
Producción- CORFO) and the remaining funding will be provided by the private sector (CNE,
2009b). PV and CSP plants should be operational in 2010 and 2012, respectively, (CNE and
GTZ, 2009, p.172).
In August 2009 the Spanish firm Solar Park entered in the "environmental impact
evaluation system" (SEIA) the environmental impact statement (DIA) of the project "Calama
Solar I", a 9 MW PV solar plant with investment of US$ 40 million near to Calama, Region II
(Antofagasta) (mch, 2009).The project has received environmental approval and currently the
company Solarpack is negotiating with local investment funds its incorporation as partner. The
company aims to develop six other projects in the country, which will total 60 MW of installed
capacity in the coming years (mch, 2010b).
In January 2009 the Korean group Daekyeonsolar announced its interest to invest US$
1,350 million in Chile for building a solar PV park with a capacity of 150 MW in the area of
Copiapo, Region III (Atacama), and a factory to produce the required technology . The project
would be developed in three years and the environmental study would be delivered in February
2009 (Portal Energía, 2009).
Study by Greenpeace projected an installed capacity for 2015 and 2020, respectively, of
195 MW and 970 MW (Greenpeace and ESTIA, 2003).The study does not provide further
details on the assumptions adopted for the preparation of scenarios.
26
The solar PV generation has a broader application than the CSP, because it leverages the global solar
radiation (direct and diffuse) unlike solar CSP that uses only the direct solar radiation.
27
The basis of the bidding for the CSP plant establishment can be seen at CNE (2009a).
28
The Great North includes the Region of Arica and Parinacota, the Region of Tarapacá, and the Region
of Antofagasta and is characterized by a desert climate because of the presence of the Atacama Desert
and its extreme aridity.
Table 42: Priority sites for the development of wave energy projects and estimated annual production of energy
2
for a wave park of 30 MW Pelamis (1km )
Table 43 identifies the main areas with potential for improving the generation from the
tidal flow and identifies the Chacao Canal and the Strait of Magellan as the main areas for the
harnessing of tidal power in Chile.
Table 43: Identified areas with good potential of harnessing tidal Power.
Potential zones Coordinates Site width (km) Site length (km) Peak flow (m/s)
Boca de Gusto
43 23 S; 73 36 W 5 25 ~1.8
Chiloe SE Ápice
Primera Angostura
52 34 S; 69 40 W 3 14 ~4
(Estreito de Magallanes)
3.1.8 COLOMBIA
Table 44 shows the capacity for the Colombian National Interconnected System (SIN)
and non-interconnected zones (ZNI), but it should be noted that there are differences between
the estimates for the installed capacity in Colombia, even among official sources.
Natural FO and
Coal Minors Total
gas Diesel
Current
capacity 1 0 18.4 35.02 / 134.03 472.0 8525.0 2757.0 984.0 621.0 83.4 4445.4 13495.8
(2009)
1 2
Notes: According to the Colombian definition plants with capacity below 20 MW; Includes cogeneration
from coal (indústrias Coltejer) and natural gas (indústrias Papeles Nacionales) due to the aggregation of
3 4 5
data from reference; Ingenio Providencia (2009); Recordon (2009); Nominal Power (not effective
6 7
power); Accounted registered but non-started projects; Termocol plant of 210 MW is dual (gas/liquid
fuels).
Source: XM ([s.d.]) (Effective Power); Chacon (2009); UPME (2009a) and own projects compilation.
The importance of conventional sources of electricity generation in the SIN can be seen,
accounting for more than 95% of installed capacity, despite the significant growth of
cogeneration between 2009 and 2008 (42.9%) (XM, [s.d.]). The largest variations in installed
capacity data occur with the PV capacity, for which there are various estimates for earlier
periods, and for cogeneration, due to the dynamism of the sector and form of accounting. Thus,
for example, Asocaña (2010) reports the entry into operation in 2009 of the Engenho
Providencia cogeneration plant, with 40 MW, but the actual installed capacity accounted for in
the SIN is only the one that exceeds the plant's own consumption.
ESMAP (2007) conducts a survey of the generation potential from renewable energy
sources in Colombia. However, the report indicates that studies of potential generation are
insufficient and difficult, and besides access to these studies is not always possible, despite the
Colombian potential being important with respect to the use of solar, wind and hydro energy.
The Colombian government, through the Energy and Mining Planning Unit aims to
contract the preparation of a development plan for non-conventional sources of energy,
according to UPME (2010), indicating that the sources with the best known resources are wind,
solar and geothermal energy. Moreover, the Colombian government had already ordered a
study on different scenarios for the inclusion of renewable sources in the Colombian generating
park (Rincón, 2007), and it has published the National Energy Plan 2030, which features a
section on renewable sources (Fundación Bariloche, 2010).
For wind energy, ESMAP (2007) indicates a potential for installation of 21,000 MW in
the department of Guajira, with annual average winds above 6 m/s at a height of 50m, while the
Colombian Atlas of Wind and Wind Energy indicates strong winds also in the departments of
Magdalena, Atlántico, César, Bolívar, Chocó, Meta and Casanare (UPME, 2006). Additionally,
UPME (2008) studied the inclusion of up to 1,400 MW in the Colombian system.
According to ESMAP (2007), the average daily solar radiation in Colombia is 4.5
2 2
kWh/m , reaching up to 6 kWh/m in Guajira. The Colombian solar radiation atlas confirms the
high level of solar radiation, also highlighting the department of Guajira, in case of wind energy
(UPME, 2005a). Two main regions concentrate the highest Colombian solar potential radiation
The potential for geothermal power exploitation is less well known. UPME has drawn a
map of soil temperature at 3 km deep covering part of Colombian territory. According to this
map, the area with the best potential is a diagonal band stretching from the department of
Nariño, in the southwest, until Santander, even though the department of Cordoba also
presents a comparable potential, with areas that reach temperatures of up to 370° C (UPME,
[N.A.]). ESMAP (2007) indicates that OLADE in conjunction with IPSE have identified three
areas with high potential for geothermal exploitation in Colombia, Azufral, Cerro Negro-Tufiño
and Paipa.
On the other hand, the state of Colombian potential biomass studies is more advanced
than the geothermal potential. UPME (2003) conducts a study of Colombian biomass potential,
being therefore, one of the earliest studies of potential available, which indicates a gross energy
potential of more than 16 GWh/year of primary energy. Crops and residues with potential for
diesel production totaled almost 0.66 GWh/year, those that enable the production of alcohol 2.6
GWh/year and those suitable for combustion 11.8 GWh/year. Clearly, the crops and residues
that could create direct combustion are most suitable for generating electricity, but one cannot
rule out the use of ethanol or diesel for this purpose. Additionally, residues of natural forests
account for 0.7 GWh/year while residues of planted forests reaches a potential of more than 0.4
GWh per year. Comparatively, the demand of the Colombian national interconnected grid in
2009 was a little above 54.5 GWh (electric) (XM, [N.A.]), thus indicating the importance of
biomass potential, although it is necessary to consider that the potential for electric generation
is necessarily smaller than the primary energy potential. In addition, ESMAP (2007) indicates
that Colombians landfills would present the potential for 47 MW of installed capacity.
As UPME (2010) indicates, there is little information about the potential for generating
electricity from ocean energy. Nogueira (2010) states that "500 MW would be available on the
Pacific coast" in tidal energy, while the power of the waves of the coast is 30 GW. (Parra, 2003)
conducted a study on the potential energy of the oceans, primarily by analysis of five sites for
generation using the OTEC technology (ocen thermal energy conversion), concluding that the
most suitable location for the deployment of the technology is the island of San Andrés, with
conditions comparable to other global locations where the technology will be firstly commercially
viable. As for the generation from tides, the paper analyzes the potential of Bahia Málaga and
concludes that with modifications on the input channels it could receive 70 MW to 100 MW
power plant, but with environmental impacts. For power generation from the waves, the study
concludes from the analysis of the waves of the Caribbean coast that it would be possible in
Colombia only with the development of technology and improvement of efficiency. Finally, the
study indicates the data insufficiency of "hydrodynamics and wave climate of the Colombian
coasts," though offset by the availability of international databases (p.101).
Under Law No. 143/1994, the Energy and Mining Planning Unit of the Colombian
Ministry of Mines and Energy should develop the National Energy Plan and the Plan for
Expansion of the electric sector, which would be indicative to the private sector. Originally, the
projects identified in these plans should be mandatorily developed by the Government if there
were no interest from the private sector, but after some modifications introduced by Law No.
1.151/2007 the government should carry out the projects only if they are "financially and fiscally
sustainable" (art. 18).
Thus, the National Energy Plan (PEN), with a 20-year horizon and the Generation-
Transmission Reference Expansion Plan (PER), with a 15-year horizon are the guide for the
expansion of Colombian interconnected system, providing strong indications for the electrical
sector. In June 2010 the most recent versions were the PEN 2006-2025 and PER 2010-2024
(the latter in a preliminary version). Nevertheless, estimates of the integration of renewable
energy in the energy matrix are rare, and even the UPME tries to address this characteristic
seeking third party elaboration of a development plan that includes future scenarios (UPME,
2010).
In the PEN for 2025 base case (the only one developed) the demand for electricity is
expected to grow 3.3% per year until 2025, the report considers a limit of 200 MW wind power
and 3,900 MW hydroelectric installable by 2025 (UPME, 2007b). In this case, hydroelectricity
retains a share of almost 75% in the energy matrix, even in the sensitivity analysis, while wind
power generation is still of little significance (less than 0.1%); other renewables were not
analyzed. Nevertheless, the PEN 2025 identifies the non-conventional sources and the rational
use of energy as a crosscutting theme and aims to identify "barriers and obstacles to distributed
generation, in order to facilitate its development" (p. 163). The Plan also focuses the
electrification of non-interconnected zones (ZNI) with funds from the Financial Support Fund for
the Electrification of Non-Interconnected Areas (FAZNI) and the use of local energy resources
in accordance with the traversal theme, indicating also the FAZNI underutilization and listing
drawing up plans to use non-conventional energy sources and implementating the regulatory
changes necessary and for direct subsidies for rural energization as a strategy. Thus, given the
base case and the recommended strategies developed by the PEN 2025, this report clearly
indicates that in the medium term the development of generation from renewable energy
sources in Colombia will take place mainly in ZNI.
This focus on isolated systems is supported by PER 2024. This Plan elaborates three
scenarios of electricity demand by 2031, with an annual growth rate of demand in the period
2008-2024 between 4.2% (high scenario) and 2.1% (low scenario) (UPME 2009a). The PER
2024 identifies 8,500.5 MW of possible projects for large hydroelectric, 2,884.6 MW coal UTEs,
2,520.5 natural gas UTEs, 127.9 MW in SHPs, 44.9 MW cogeneration and 20 MW wind power
plants. Additionally, among the projects under development and considered for the Plan one
has only 4 SHPs adding 39.7 MW with startup scheduled for the end of 2010. As other
generation projects from renewable sources were not considered, the two scenarios of the
Colombian generating park expansion analyzed by PER 2024 includes only the installation of
SHPs in the period 2010-2024.
The PER 2024, in its preliminary version, examines in less detail than PER 2023 the
inclusion of renewable energy sources in the Colombian energy matrix. On PER 2023, one of
the scenarios developed is precisely the one seeking a greater input of these sources in the
period 2009-2023, with the inclusion of 20 MW wind farms in 2012, 98 MW cogeneration from
More importantly, in the second half of 2010 was published the National Energy Plan
2030, representing the only known study to conduct a longer-term assessment about the energy
scenario in Colombia, including renewable sources (Fundación Bariloche et al., 2010).
Unfortunately, the study does not present proposals for expansion of the national electricity park
beyond 2017, and in addition the study recommends a reduction in the hydropower participation
to a range of 60-65% in 2030. A positive point of the study is the continuous insistence on
energy sources diversification, which although capable of causing a growing share of fossil fuels
also provides major support to the development of renewable sources to generate electricity. To
achieve this goal, some indicated proposals are: to prepare studies for an investment portfolio,
application of the load availability mechanism and rules and incentives for renewable sources
and internalization of conventional sources environmental costs.
Renewable Sources
Wind energy
As indicated in Table 44, the effective installed wind power plants capacity in Colombia
in 2009 was 18.4 MW, corresponding to the Jepírachi wind farm. The nominal installed capacity
of this park is 19.5 MW, which came into operation in 2004 and was built by Empresas Publicas
de Medellin (EPM) with CDM resources, (EPM, [N.A.]).
According to UPME (2009a), the only wind project registered with UPME was Jouktai,
under the responsibility of Colombian generator ISAGEN in conjunction with the company
Wayuú, with 31.5 MW and that will count with CDM resources, but it is worth noting that
registration of projects is not compulsory (ISAGEN, 2010). The company also conducts studies
of other areas in partnership with Spain's Iberdrola (ISAGEN, [N.A.]). In addition, IPSE (2009a)
indicates the deployment of 200 kW of wind turbines for ZNI, backed by diesel generators and
LPG, with startup in 2011.
The oil company Ecopetrol stated to study a wind power project with 2 MW power
(Higuera, 2010). On forecasts of the wind installed capacity, Recordon (2009) indicates that the
wind installed capacity in Colombia in 2020 will be approximately 100 MW, in contrast with the
Generation-Transmission Reference Expansion Plan 2010-2024 that, as mentioned, does not
foresee the inclusion of wind power plants to the interconnected system in the analyzed period
(UPME, 2009a). However, the minimum contribution in 2020 of non-conventional sources of
energy established by Resolution No. 18-0919/2010 shall probably alter predictions (refer to
analysis of laws and regulations) (MME, 2010).
As seen, the determination of solar PV capacity installed in Colombia is not simple due
to the variations between estimates, while electricity generation from concentrated solar power
is non-existent.
According to UPME (2009a) there are no generation projects recorded in the SIN, and
institutional analysis indicates that although there are manufacturers of PV modules in the
country, they are of low capacity, and power and engineering companies operate mainly in
installation of low power systems, isolated or not. The IPSE (2009b) indicates the development
of midsize projects for PV generation (combined with generation from diesel, LPG and wind) in
the ZNI, with 10 groups of 12.5 kW each, totaling 125 kW of power, and Ecopetrol oil company
was considering installing 2 MW PV energy for its own use (Higuera, 2010).
Thus, for the development of PV generation in the Colombian SIN, there are no actors
dedicated to manufacturing equipment and to implement large projects, such as for generation
from concentrated solar power. On the other hand, development in ZNIs shall be higher, with 16
projects registered and under analysis (IPSE, [N.A.]).
Biomass
Asocaña (2010) indicates that the cogeneration plant of Ingenio Mayagüez with 37 MW
is scheduled to start operations in the first half of 2010, while Ingenio Providencia's plant (40
MW) began operations in 2009, with both projects listed in (UPME, 2009a).
In the period 2019-2023 the Plan does not consider the entry into operation of other
smaller projects, although there are 127.9 MW of hydroelectric power smaller than 20 MW,
indicating that these could be built by 2024.
Geothermal energy
There was no geothermoelectric generation plant installed in Colombia until June 2010.
The institute INGEOMINAS produced a geothermal map of Colombia to a depth of 3 km
(UPME, 2005b).
Nogueira (2010) reports that in 2003 a drilling of one exploration well in the area of the
volcano Nevado del Ruiz was made, which according to UPME (2005b) presents hydrothermal
manifestations with temperatures between 150° C and 250° C. The company ISAGEN
supported by Colciencias, INGEOMINAS and the National University of Colombia has started a
project in the area, with preliminary studies in 2008-2009. In 2010-2011 further studies will be
held on the site, and a 50 MW geothermoelectric plant could start operation in 2013 (Bastidas,
2010). The oil company Ecopetrol may also implement a prototype for generating
geothermoelectric (Higuera, 2010).
Energy Storage
As indicated in Table 44, large hydroelectric plants account for over half of the installed
generation capacity in Colombia. One does not find major development projects or research in
new electricity storage technologies in Colombia, despite some academic groups working with
hydrogen, such as GEA (GEA, [N.A.]).
Most large power plants in Colombia are connected to the transmission net at 230 kV,
and this transmission network has a mesh profile in the central region (around the capital
Bogota) and a radial profile in other regions like the northern peninsula, while places as the
Amazon are not part of the interconnected system (UPME, 2009b; Millán, 2009). Thus, the
installation of generation plants from renewable sources away from major transmission routes
can be greatly hampered, since the generator must bear the costs of connecting to the network
regardless of the energy source, as described in the laws and regulations' analysis.
3.1.9 MEXICO
Potential and Installed Capacity In Mexico, hydrocarbons have the highest participation
in primary energy supply, 73.1%, while the renewables contribution is 24% (Figure 16).
3%
Combined cycle & gas turbine
24% 38%
Thermopower plants (fuel oil and diesel)
Figure 16: Installed capacity of the Mexican public sector in 2008 (MW)
The installed capacity of electric power utility in 2008 generated 235,871 GWh: 48.8%
(115.105 GWh) from combined cycle plants and gas turbines, 18.7% (44,107.5 GWh) from fuel
oil and diesel power plants, 8.9% (20,992.5 GWh) from thermal coal; 16.5% (38,919 GWh) from
hydroelectric, 3.1% (7312 GWh) from geothermal energy and wind, and the remaining 4.2%
(9907 GWh) from nuclear (SENER, 2009).
As for renewable energy, 24.2% of installed capacity from the electric power sector
(public service) in 2008 corresponded to technologies that use renewable sources of energy,
with large hydroelectric power plants providing the largest weight.
The installed capacity of electric power utility in 2008 generated 235,871 GWh: .
Wind 85 255
Biomass 243 n.a.
The high idleness of the national electric system (above 40%), accentuated by the
economic crisis of 2009 led to the postponement of proposed new plants development.
This situation led to an electrification processes based on extensions of the power net,
although this has occurred unevenly in Mexico and Central America, since in Mexico and Costa
Rica electrification levels are close to 100%, while the other, as is the case of Nicaragua, have
less than 65%.
The Mexican government plans reflected in the so called Planning of the Electricity
Sector (jointly developed by SENER and CFE, the national electricity company) and states that
generation will grow at a rate of 4.1% per year (almost the same as consumption), indicating a
reduction in the percentage of thermo power plants and gas turbine engines, although there is a
concept of "free" generation that does not specify the type of technology to be used.
Thus, in addition to a possible expansion of the Laguna Verde Nuclear Power Plant,
large hydroelectric plants, combined cycle plants, the internal combustion and coal generation
will continue to participate in nearly the same proportion as today (SENER, 2009).
Moreover, the Law for Utilization of Renewable Energy and Energy Transition Funding
forecast that units operating with renewable energy will reach, in 2012, an 8% share of national
production of electric energy, without considering the contribution of large hydroelectric plants.
However, the Power Sector Projection for 2009-2024 shows that in 2015 the proportion of
renewable resources will reach only 7.7% of capacity. In addition, if one takes into account the
hydroelectric power plants over 30 MW, would have an increase of 24.2% in 2008 to 27.7% at
the end of the period.
Thus, the estimated capacity of public service plants operating on renewable energy
would be comprised, mainly, of SHPs followed by wind and geothermal plants. For its part, the
29
Power Sector Projection for 2015 finds that the "free" generation will be on renewable energy,
so that the installed capacity of such plants by the year 2015 shall be 2,775 MW (Table 46).
29
On page 125 of the "Forecasting for the Electric Sector 2009-2024," published by the Department of
Energy in 2009, is reported: Among the strategies to diversify electricity generation sources, projects
Sureste I-IV are scheduled, which correspond to the free capacity that could be achieved through wind-
Type of plant Estimated capacity in 2015 (MW) Estimated capacity in 2020 (MW)
On the other hand, facilities for electricity production from self-producers show a strong
30
growth. The installed capacity of plants operated with self-sufficient renewable energy has
grown significantly and is expected to have significant growth in the near future. Particularly in
the Isthmus of Tehuantepec, the main area of wind projects development, wind generation
capacity should increase by 1,491 MW between 2009 and 2012 (SENER, 2009).
To these one must add other plants of smaller capacity and various technologies in
different parts of Mexico.
Renewable Sources
Wind energy
In late 2009, Mexico had 202 MW of wind power and about 570 MW under construction
(AMDEE, 2010).Of these, most projects aimed at self-production.
As noted earlier, the installed capacity of wind power plants from self-producers has
increased significantly, outlining a remarkable growth in the near future, since it predicts an
increase of 1,500 MW between 2009 and 2012 (SENER, 2009).
SHP
In Mexico, hydroelectric plants are mainly used to meet peak demand, i.e., they are
designed to operate a few hours a day.
electric technology with total capacity of 1,216 MW, thereby contributing to the expansion of the
renewable energy to public service park. In addition, other projects that may contribute to the
diversification of production are: Oriental I and II in Veracruz (1,400 MW) and Noreste II and III in Sonora
(1,400 MW). In this context it is important to note that in the Third Report on the Work of the Ministry
of Energy was published the recent evolution participation of primary energy sources used to generate
electricity, which provides for the composition of the generation park consistent with the indicators and
targets in the Energy Sectorial Program 2007-2012".
30
As self-sufficiency is considered "the generation of electricity for own consumption, where and when
such power is intended to meet the needs of individuals or entities and is not inconvenient for the
country.”
In 2008 the installed capacity of hydropower plants was 11,720 MW, 11,343 MW of
which corresponded to large power plants and the remaining 377 MW to several small plants
that operate in the states of Jalisco, Veracruz, Durango, Colima, Michoacán and Guerrero
(SENER, 2009).
Biomass
By the end of 2008, the Energy Regulatory Commission (CRE) had approved 224 MW
for hybrid systems (fuel oil - sugar cane bagasse) and 19 MW for electricity generation from
biogas (SENER, 2009).
Geothermal energy
Mexico is a important country in the world's geothermal energy scene, ranking third in
the world with a geothermal production capacity of 965 MW up and running that generated just
over 7,000 GWh in 2008 (SENER, 2009).
The Federal Electricity Commission estimated that the geothermal potential can be 2.5
times higher and add 2,400 MW to the current capacity (SENER, 2006)
In Mexico, there are conditions for the use of solar energy for electricity generation on
isolated systems, as well as for net-connected installations. With an average insolation of 5
2
kWh/m , the country's potential is one of the largest in the world.
Over the past ten years, mainly with funds from the World Bank and the consignation of
agricultural-cattle production (FIRCO), the installed capacity of PV systems in Mexico increased
from 7 MW to 15 MW, generating more than 8,000 MWh per year for rural electrification stand-
alone systems, water pumping and refrigeration (SENER, 2006).
More recently, there have been small-scale applications of systems connected to the
31
network and there are already regulations that allow them under the concept of "net energy" .
In particular, there is a housing project in the north of the country where the PV systems
31
Net amount of energy refers to the balance between energy received and delivered. Note that in the
case of Mexico, the balance may be zero but never negative, i.e., the concessionaire never has to pay
the owner of the photoelectric facility.
One estimates that by the end of 2013 there will be a potential of 25 MW obtained by
use of solar energy through PV systems for use in isolated rural communities (SENER, 2006).
3.1.10 PERU
Despite not having published a document assessing the state of electricity generation
from renewable energy sources in Peru, the Peruvian government has gradually implemented a
policy for supporting this type of generation, even conducting informational presentations, but
more importantly implementing incentive mechanisms like biddings.
Table 47: Current Installed Capacity and Projections for Electricity Generation in Peru (2009)
Solar Conventional
Solar PV Wind Biomass SHP 32 Geothermal Wind Biomass Hidro 33 Total
PV thermal
Coal Total
Current
capacity 3.7 0.0 77 210.0 0.0 0.7 0.0 0.0 2954.4 141.87 3046.2 6000.6
(2009)
Source: MEM (2009a); COES SINAC (2010)a; Gamarra (2009); OSINERGMIN (2010b); DGER (2009);
MEM ([s.d.]); MEM (2010a); Artieda (2008).
According to MEM ([N.A.]) Peru has some sites with excellent wind conditions for the
development of wind power. The departments of Ica, Ancash, La Libertad, Cajamarca,
32
Hydroelectrics smaller than 20 MW
33
Includes SHPs
According to Nogueira (2010) Peru has a high solar potential due to low cloud cover
and its equatorial location, and analyzing the Solar Atlas of Peru it is clear that coastal regions
are those with the highest levels of solar radiation, usually with annual averages above 5.5
2 2
kWh/m /day even reaching values between 6.5 and 7.0 kWh/m /day in the south, in the
departments of Tacna, Moquega, Arequipa and Ica. However, it should be noted that Nogueira
2
(2010) indicates a potential slightly lower, with radiation in the range of 4-5 kWh/m /day, and
2
radiation greater than 5 kWh/m /day in the Peruvian highlands, while Gamarra (2009) confirms
the initial values, though clearly based on the Atlas. Despite these differences, it is clear that
Peru has high levels of solar radiation suitable for generating electricity.
The energy potential of agricultural, livestock, agro-industrial and urban residues in Peru
comes to 1.31 Mtep (15.25 TWh) per year, while the wood potential energy reaches 66 Mtep
(767.58 TWh) per year (Nogueira, 2010). However, one must distinguish this energy potential
from the potential for generating electricity. Gamarra (2009) indicates significantly higher
potential, since although the wood potential is about the same, the livestock residues annual
potential is of around 18 TWh, agricultural residues 8 TWh, and urban residues 3 TWh, while
the use of rice hulls has a potential of 0.71 TWh and sawmills residues 0.37 TWh per year.
Also according to Gamarra (2009), the exploitation of sugar cane bagasse has a potential to
generate 5 TWh per year.
Nogueira (2010) shows no potential for geothermal power in Peru, showing only the
most promising locations for using this energy:
A map with these locations can be seen in DR (2006a), where one realizes that these
areas are still too wide to establish a specific location for the installation of a geothermal
recovery. Gamarra (2009), in addition to name these already mentioned places, indicates the
possibility of installing power generation with capacity between 1,000 and 2,990 MW.
The Peruvian government has developed in the 1970s in partnership with the German
government a study of the hydroelectric potential of the country (MEM, 1979). Although it
considers only the most powerful plants, of at least 30 MW, except for isolated systems projects
(which in that time covered an area larger than the current one), the report identified 163
projects with a capacity of up to 100 MW, with a large amount below 30 MW, and 114 with
power between 100 MW and 300 MW. The total hydroelectric potential identified was 58,937
MW, a potential mentioned again in 2009 by Gamarra (2009) and that could generate up to 400
GWh per year, while Nogueira (2010) indicates a potential of 33.2 TWh per year. Despite this
latest assessment seeming small, it should be noted that this would amount only to the proven
As mentioned, the Peruvian government has not yet published a study on the
development of renewable energy in the country, but in 2010 it published a call to hire a
consultant for the "Development of a Institutional Strengthening Study, Development of
Mechanisms for Promoting Renewable Energy (RE) and Biofuels (BioC), and dissemination of
its results ", valid until June 17, 2010, (MEM, 2010a).
In 2009 the Ministry of Energy and Mines of Peru (MEM) published the Electricity
Reference Plan 2008 - 2017 (PRE, 2017), indicative and updated every two years, considering
the development of renewable non-conventional energy (MEM, 2009a). In the same year,
tenders were published for the "Bidding for the Supply of Electricity with Renewable Energy
Resources", with the award for the first bid made on February 12, and for the second on July
23, 2010 (OSINERGMIN, 2009; OSINERGMIN , 2010a).
As indicated, the ERP 2017 includes consideration on the inclusion of renewable energy
sources in the electric matrix due to the Peruvian government policy. Although considering that
renewable sources of energy are not viable in the short term and that they still shall have a high
cost in the medium term, the document states that the objective of long-term generation
expansion is to "maximize the utilization of the country's hydropower potential complemented by
thermal generation and renewable resources", so they are considered an alternative, but not the
main driver.
In the PRE 2017 base scenario, it is considered the inclusion until 2017 (medium-term)
of wind generating capacity (450 MW), geothermal (125 MW) and SHPs up to 20 MW (143
MW), totaling 718 MW, according to Table 48. Although the document still draws optimistic and
conservative demand scenarios, the inclusion of renewable generating capacity does not
change.
Table 48: PRE 2017 – Base Scenario – Insertion of Renewable Generation Capacity
(MW) 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Total
Geothermal - 0 0 0 0 0 0 25 50 50 125
This installed capacity would corresponds to the generation of 263 GWh wind, 372 GWh
geothermal and 325 GWh SHPs in 2017, or 960 GWh total in this year
Proposed Projects 2 6 6 14 17
Contracted Projects 2 3 4 9 17
As the PRE 2017 did not consider the inclusion of PV or biomass generation, this is
outdated since the contracted capacity should be in operation by 2012, and the Plan considers
only the input of 100 MW wind up to this year. In addition, the second bid aimed to contract 419
GWh/year generated from biomass and 8 GWh/year from solar energy, with the possible
participation of hydroelectric exploitations of up to 20 MW and therefore a reassessment of the
Reference Plan is necessary.
Moreover, in spite of the Peruvian Energy Policy Proposal maintaining the development
of hydroelectric projects as a priority, non-conventional renewable energy has a greater
significance because of the energy independence goals and the wish of having an energy
sector with low environmental impact (MEM , 2010C).
For the supply of electricity to communities outside the interconnected system, the
Peruvian government developed the National Plan for Rural Electrification (PNER) 2009-2018
(DGER, 2009). The plan amply makes use of renewable energy sources (hydroelectric, solar
and wind), being these sources prioriraty for electrification, and aiming to install 88 PV
generation projects, 2.6 MW hydroelectric and 2.758 MW wind.
There are few independent studies that develop energy scenarios for Peru, and clearly
their influence is small compared to the Reference Plan of Electricity. Studies of the Developing
Renewables project, funded by the European Commission, indicate the following possible
development by 2020 to generate electricity:
However, some of the assumptions used in the study, as the consideration of PV only in
isolated systems, although consistent in the year of publication of the study (2006) no longer
align with government policy and recent developments of renewable electricity generation in the
country.
Wind energy
By Table 47 the Peruvian installed wind capacity until 2009 was insignificant, a fact
confirmed by Gamarra (2009) and Garten Rothkopf (2009). While the wind farms with temporal
concessions in 09/2008 totaled 5,535 MW (34 projects), temporal concessions on April 2010 in
Peru amounted to 8,620.0 MW (with studies to be completed by 2011), a significant increase,
although in November 2009 more projects were indicated (MEM, [N.A.], MEM, 2008, MEM,
2009b). These projects have concessions and are developed in large part by the companies
Huayra Kallpa, Gaz & l'Énergie, Generalima, Iberoperuana Inversiones, Peru Renewable
Energy, Soleol and SoWiTec. Gamarra (2009) mentions 58 temporal concessions totaling
approximately 9,400 MW.
In the first bidding for renewable generation of 2010, the Peruvian government granted
the concession for the construction of three wind projects that should start operating by the end
of 2012, with 30 and 80 MW for the company Energía Eólica and 32 MW for the consortium
Cobra Peru / Peru Energía Renovable. Despite the total power contracted by the bidding for all
sources being below the target of 500 MW, the annual supply of electricity from wind power
contract was higher than the goal of 320 GWh (571 GWh were contracted). One must however
be attentive to the development of projects since the capacity factors are high (the lowest is
43% and the larger 52.93%), and sometimes wind projects end up generating less energy than
expected. If these developments are confirmed and the Peruvian government maintains its
policy on renewable generation, the PRE 2017 scenario with 450 MW wind can come true and
even be surpassed.
However, it should be noted that the first bid determined a maximum wind power
injection in the power grid, initially limited to 375 MW in total, which after criticism was enhanced
to 640 MW, therefore no longer being an additional impediment to the PRE 2017 scenario,
except in the limit for injection in a single bus (which can be of 5 MW on the Tumbes bus)
preventing the development of projects in promising areas (OSINERGMIN, 2009; REVE, 2009).
Moreover, the inclusion of wind power in the Peruvian power matrix faces resistance from
traditional generators (Marticorena, 2009).
Additionally, the Peruvian government aims to install 2,758 MW in wind farms with wind
turbines of 0.15 kW at 280 locations for isolated communities in the period 2011-2018 (DGER,
2009). The project will initially be deployed in some departments, and later at national level, but
a better definition of the program is still going to be made.
While there is no generation capacity from solar concentrators in Peru, Gamarra (2009)
mentions 3.7 MWp PV installed in the country. In June 2010 there was no solar generation
projects registered with the Ministry of Energy and Mines of Peru. In the first bidding for
renewable sources generation in 2010, four generation projects of 20 MW each were
contracted, the companies responsible being Group T-Solar (2 projects) and consortia
Panamericana Solar and Tacna Solar (both with participation of T- Solar). Projects should be
operational by the end of 2012 and should produce 172.942 GWh annually, with capacity
factors between 28.9% and 21.4%. The contracted energy was slightly below the goal of 181
GWh, which motivated a second bid for hiring 8 GWh. All solar PV winners of the first auction
Biomass
The share of generation from biomass in the Peruvian energy matrix is low, despite the
high potential that this source represents. Gamarra (2009) indicates the existence of 77 MW of
installed capacity for generation from sugar-cane bagasse, while in spite of there being
registered thermal biomass plants with final concessions none were in development ( MEM,
2010b).
The first bidding for renewable generation had low participation of the biomass source,
with only two projects offered, but the second bid was devoted almost exclusively to it, with a
small share for solar power. The goal of the second bid was to hire 419 GWh of electricity
annually, of projects that must be operational by the end of 2012. Using the average capacity
factor of the first bidding for projects that use biomass (65%) this would correspond to an
installed capacity of 73.59 MW.
Finally, a project developed by the French company Bionersis, with CDM resources
aims to collect and burn (flare) landfill gas, indicating the possibility of modifying the project at a
later stage to produce electricity, as happened with the company's Bucaramanga project in
Colombia (CDM, 2008). The Huaycoloro recovery of landfill gas project funded by the World
Bank may also include the generation in a second stage with an output of 5.74 MW (WB, 2010).
As mentioned, Peru has a huge hydropower potential, confirmed in studies in the 1970s
(MEM, 1979). On April 30, 2010, there were nine hydroelectric power plants with capacity of
less than or equal to 30 MW with temporal concessions, totaling 175.67 MW (100.17 MW if one
considers only the six projects of less than 20MW), with studies to be completed between 2010
and 2012 (MEM, 2010d). Additionally, there were six projects with final awards, totaling 58.62
MW, with startup scheduled between 2011 and 2012 (MEM, 2010c).
Moreover, according to the National Plan for Rural Electrification, the Peruvian
government plans 2.6 MW hydroelectric in isolated Peruvian communities until 2018.
Geothermal energy
Peru does not have geothermal generating plants, although there are potential sites for
installation in various parts of the country, as mentioned. Gamarra (2009) indicates
development studies in Calientes, with 150 MW, and Borateras, with 50 MW, both in Tacna, in
the very south of the country, and PRE 2017 states that Peru "has 156 geothermal identified
areas" (MEM 2009a, p. 210). The two ongoing studies mentioned are made with Japanese
funding agencies (Nakao, 2008), whereas with the support of Peruvian, Caribbean and
European investors the company Andes Power Peru develops the exploration of geothermal
resources in the country and aims to develop a project generating approximately 200 MW,
operational by 2011 (Artieda, 2008). The mining company Aruntani also develops a generation
As seen from Table 48, the PRE 2017 considers the inclusion of 125 MW by 2017 (25
MW in 2015, 50 MW in 2016 and 50 MW in 2017), without forecasting further additions to the
system in the period 2018-2027, but with good chance of change since this prediction only
considers structuring projects (MEM, 2009a). According to Nakao (2008) the first steps
necessary to spur development of geothermal energy in Peru are: a more detailed development
of geothermal resources in the country with the establishment of a Geothermal Plan; the
completion of exploration and drilling activities by the government in order to reduce the risk of
the private investor, and perhaps facilitate public-private partnerships, whereas the government
currently develops this Geothermal Plan through the INGEMMET Institute (INGEMMET, 2008).
It should be noted that this model, while reducing the investor risks, transfers to the government
a costly and risky phase of the projects, since the drilling of exploratory wells is costly and
sometimes fruitless.
MEM (2009a) presents a map of Peru's interconnected system, where one can see that
the power plants of the center system are usually connected in 220 kV transmission lines, while
plants in other systems (south, mid-north, and north) are connected more frequently in the 138
kV grid and sometimes at 66 kV and 33 kV, while the four systems are interconnected by 220
kV lines. According to OSINERGMIN (2009, 2010a) renewable resources prospect generation
projects should connect to the system on buses allowed by tenders. For the wind generation
most permitted buses are 220 kV buses (with two more buses of 60-66 kV and two 138 kV
buses) and these also have a maximum power, as mentioned above, while for other forms of
generation (solar, biomass and hydro) there are more connection options, but with the majority
being 138 kV and 220 kV buses, and no limitation of connected power. In the first bid of
renewable generation there was a winning wind project that was disqualified since it exceeded
the maximum power injection in the bus, although the COES could consider such cases as
permissible if well-founded (OSINERGMIN, 2010b; De Oca, 2009).
3.1.11 VENEZUELA
The information presented in this chapter was obtained from literature searching, mainly
on the internet. Not all sources are safe, but all obtained information will be presented in an
attempt to contribute to a better perception on the renewable energy situation in Venezuela.
Venezuela ranks among the largest worldwide oil exporters, being the largest oil
exporter of the Western Hemisphere and, therefore, of the Latin America. In 2008, the country
was the eighth largest worldwide oil exporter, what shows the importance of oil the sector to
Venezuela's economy, accounting for three quarters of the country total export income, half of
the government total revenue, and one third of the Venezuelan GDP (EIA, 2010).
In 2008, the country accounted for, approximately, 66% of 7.35 trillion cubic meter of
proven natural gas reserves of Central and South America (ANP, 2009, p.40).
The installed electricity system renewable sources capacity in the Bolivar America in
2008 was 14,597 MW, corresponding only to hydropower (slide 5) (Ravelo and Sepulveda
2009), as can be seen in Table 50.
(MW) 2008
Solar PV Solar Thermal Wind Biomass SHP (<20 MW) Hydro Thermal Total
Steam 4366.0
34
Organization of the Petroleum Exporting Countries (OPEC / OPEP): a multinational organization
established in 1960 to coordinate oil policies of member countries. It is formed by the following
countries: Angola, Algeria, Libya, Nigeria, Indonesia, Iran, Iraq, Kuwait, Qatar, Saudi Arabia, United Arab
Emirates, Ecuador and Venezuela.
Other renewable sources can be found in Venezuela, however, they are related to
specific experimental activities, as for instance, bio-digesters installed in Pedraza Barinas and
solar PV systems to attend communities in isolated regions (Nogueira, 2005, p.43). However,
according to the same source, despite having high fossil energy resources, Venezuela is one of
the few oil-exporting nations with good transition prospects to a sustainable scenario.
“Venezuela faces a unique challenge: properly define the space for renewable sources
in a diversified and rational form” (Nogueira, 2005).
Residue - 20
Subtotal 165.5
In Venezuela, three expansion plans for the electricity sector were possible to find,
these are called: The Generation Expansion Plan 2009-2012 (“Plan de Expansión de
Generación 2009-2012”), The Generation Expansion Plan 2008-2014 (“Plan de Expansión de
Generación 2008-2014”) and The Development Plan for Renewable Energy Sources (“Plan de
Desarrollo de las Fuentes Renovables de Energia”).
We found no documents with further details on these plans, so we will give a short
presentation of the same.
The Development Plan for Renewable Energy Sources is a part of the Plan for
Economic and Social Development of the Nation 2007-2013 (PDESON) (slide 14) (Márquez,
2009).
Among the policies and strategies defined in the PDESON, incentives are include for
alternative, renewable and environmentally sustainable energy sources, besides the target of
turning the country into a worldwide energy potency (RBV, 2007). Paradoxically, it is also part of
the PDESON policies and strategies "to increase the generation of electricity with fossil energy".
The Pilot Plan for Wind Power Generation (Plano Piloto de Generação Eólica- PPGE) is
part of the plan to diversify Venezuela's energy matrix, which shall provide in its first installation
phase 100.32 MW in the Community of Los Taques, in the State of Falcón, and 72 MW in three
wind farms: Chacopata, in the Sucre State, with 24 MW, Isla de Margarita and Isla de Coche, in
the State of Nueva Esparta with, respectively, 20 MW and 4 MW, and the Peninsula de la
As of February 8, 2010 it was published in the Official Press, issue No. 39.363, the
Decree No. 7228 that declares "state of emergency" on the provision of domestic electricity
services, including facilities and related assets for a 60 days period, extended in April 8, 2010
by another 60 days (Venezuela, 2010). Since then various measures were taken. In addition to
the fines imposed on companies and private users who do not meet the reducing energy
consumption goals, the country has made scheduled four hours cuts every two days in
electricity supply at several points. Several measures are being taken in an attempt to address
the continued emptying of the "El Guri" dam, responsible for 73% of the country supply.
The electricity sector 2008-2014 development and expansion plan is expected to invest
an amount around 20 billion dollars. With this investment it is expected to achieve an additional
installed capacity of 10 GW, one third of the present installed capacity (RANAV, 2009).
Table 52 presents the developments that are part of the Generation Expansion Plan
2009 -2012, which does not mention sources. It was found, through research on the internet,
that the plan plants are basically fossil and hydroelectric power plants.
From Table 52 the enterprises to be carried out until 2012 are found, totaling a capacity
of 4,410 MW, which is less than half the capacity to be installed in the country until 2014
according to the Generation Expansion Plan 2008-2014.
Renewable Sources
Wind energy
By the year 2013, 172 MW of wind power shall be installed in Venezuela according to
the PPGE. Figure 19 presents the country potential use for wind energy.
Biomass
Figure 20 presents locations with potential for biomass use in Venezuela, these add to
340 MW.
Solar PV
Venezuela has so far installed 806 PV systems that benefited 107,590 people and
provided access to electricity for 551 communities, being 235 indigenous and 316 isolated
locations (Ecoloquia, 2010). However, no plans were found of PV system installations to be
connected to the country electric net. Figure 21 presents the solar energy potential, per area, in
Venezuela.
3.2.1 ARGENTINA
In spite of some criticisms, Argentina has a relatively well-established legal framework
for promotion of renewable energy sources, not only setting goals, but also defining resources
and creating different rates and adequate conditions for the local market development. These
35
sources are: SHPs , wind, solar, geothermal, ocean, biomass, landfill gas, process gas and
biogas.
The start of this framework was Law 25.019/1998 that mainly promoted the
development of solar PV and wind energy. The most expressive is Law 26.190/2006, which
established that in a ten years period since its regulation (2016), 8% of the country's electricity
generation must come from renewable sources.
The country has not yet seen the federal program for the development of renewable
energy published, as established by Law 26.190/2006, and does not offer long term stable
signals to the market, despite of performing specific public biddings for these sources.
35
Defined for power smaller than 30 MW.
Law No. 24.064/92, the electric power regimen, determined that electricity transport and
distribution are public services, while generation is of "general interest". The law was amended
by Decree No. 804/2001 (of deregulatory trend), but this was revoked by the Congress, thus
prevailing the original articles.
The law guarantees free access to the transmission system (for the excess of the
already contracted capacity) and states that the National Regulatory Authority for Electricity
(Ente Nacional Regulator de la Electricidad - ENRE) should regulate electricity transport and
distribution, always maintaining "fair and reasonable rates", but ones that stimulate "private
investments", assuring competitiveness whenever possible. Transport and distribution shall be
performed by private players through the executive power concessions, with the State only
acting in the process if no bidders are found. Furthermore, companies with major state control
can only receive payment for its costs, with the surplus passed to a fund intended to finance
works already existent upon the law enactment and to stabilize prices paid by distributors. On
the other hand, controllers of transport companies cannot operate in other segments of the
industry.
Energy distributors are excluded from the players' definition of the wholesale market
36
(“Mercado Eléctrico Mayorista” - MEM ) and therefore cannot actuate on it (therefore these
must sign contracts directly with generators). These would participate according to the revoked
Decree No. 804/01, as well as self-producers and cogenerators. However, according to the
definition of Article 5 the latter ones, as generation agents, can participate as players (by
Authors' interpretation). Additionally, despite of the law, distributors are actually MEM agents,
they only do not participate in the spot market.
According to amendments to Law No. 15.336/60, only hydroelectric projects with power
over 500 kV and public service activities of transmission and distribution require concessions by
the executive power.
This Law, the initial legal framework for the development of electricity alternative
sources in Argentina, originally focused mainly on the development of solar PV and wind power.
The law firstly determines that the Energy Secretary shall promote the research and use
of renewable or non-conventional energy sources, and that generation from solar and wind
37
sources do not require an authorization from the Executive Power for installation. VAT
36
For further details of their operation, see the attachments section of this report.
37
Value Added Tax - a tax charged on the sale of a product, and passed on to the end consumer,
The Federal Electric Energy Council can apply FEDEI funds for solar and wind
generation. Energy purchase receives a treatment similar to hydroplants without reservoir
capacity (preferential dispatch). Due to changes introduced by Law No. 26.190/2006, special
rates were extended to other sources for a fifteen years duration. These are:
The marginal production price of a large combined cycle gas plant (620 MW) was
417.82 $/MWh as of 31/03/2010. According to CADER (2009), these incentives are small for
wind energy as compared to the spot price for electricity traded in the Argentinean market.
This Law, regulated only in 2009 by Decree No. 562/2009, intends to achieve an 8%
share of renewable sources in electricity generation within ten years - until 2016 (SHPs, wind
energy, solar, geothermal, tidal, biomass, landfill and sewage treatment gas, and biogas). The
law determines that the Executive branch must elaborate a "Federal Program for Development
of Renewable Energy", to stimulate the development of technologies and equipment, enter
cooperation agreements, train human resources and promote renewable energy acceptance by
the society.
The law (which should have been regulated 90 days after it publication) determines a
wide range of responsibilities to the enforcement authority, yet to be determined, from
development of human resources to pilot projects for hydrogen use (obtained from renewable
energy sources or from fossil fuels). Thus, the effectiveness of these measures will depend on
the regulation, although the delay is a negative signal on the political will to regulate the Law.
The law also creates the "National Fund for Hydrogen Development (FONHIDRO -
Fondo Nacional de Fomento del Hidrógeno)", whose resources shall be determined through the
Union budget, without any other fixed source of funds. The value-added tax (VAT) paid on
With this resolution the concept of distributed self-generator is established, which allows
a company to produce electricity and use the transmission network to transmit the generated
energy for its own consumption, and even sell the surplus. This may allow an industry to invest
in renewable generation to ensure its energy supply, however the producer and consumer legal
entity must be the same (Cader, 2009).
In 2004 the government created Argentine Energy S.A. (ENARSA - Energía Argentina
Sociedad Anónima), a company operating with fossil fuels, nuclear, and renewable power
sectors, motivated by the country's energy crisis. The main ENARSA asset is the possession of
the not yet granted concessions to exploit oil and gas in Argentina, but the company was
established to actuate in all energy fields.
Existing Bills
The project includes fiscal stability and relief from import duties (for items with no
national equivalent) as directives of a favorable tax treatment. Furthermore, it increases the
special rate for wind source feed (from 0.15 to 0.31 $/kWh), solar PV and CSP (from 0.9 to 1.00
$/kWh). This bill is more limited in scope, and tax changes are its most important issues in
terms of incentive potential, but apparently the bill expired in 2010 in the Senate and the project
was abandoned. More consistent, project 4001-D-05 increases taxes collected for the FNEE by
0.8 $/MWh to pay for wind power up to 40% on the price of conventional energy sources (30%
for sites with average wind speed above 23 km/h) for 15 years. Conventional sources energy
price definition clearly depends on the regulation and on the definition of "average wind speed"
(as a function of height and other parameters). Moreover, as the bill date is 2005, therefore
preceding Law No. 26,190, its approval is uncertain.
The following initiatives were identified, which can have a positive impact on the
advancement of renewable sources technology:
• Wind: 0791-05
Under the Program for Renewable Energy in Rural Areas (PERMER - Programa de
Energías Renovables en Mercados Rurales) bids are regularly published for supplying PV
power generation systems. The current bids (as of 30/March/2010) are "Provision and
Installation of Photovoltaic Equipment and Internal Installation in Rural Houses in Various
Provinces", phases I and II, "Provision, Installation and Commissioning Service of 238
Photovoltaic Systems in Rural Schools" and "Repowering of Rural Schools in the Province of
Jujuy".
Energy PLUS
Established by resolution 1281/06, the Energy Plus ("Energía PLUS") program requires
major users of the wholesale market to "contract in the energy market their consumption above
their actual 2005 demand" (Cader, 2009). Also, according to this source, Resolution 220/07
(which stimulates generation projects through contracting by CAMMESA for a 10 years period)
would be the only possible form to incentive wind power, since this study precedes regulation
and the bids mechanism institution.
Renewable energy sources, except for hydro and wind power, must comply to the
procedures specified for hydroelectric units without reservoirs, except when otherwise specified
(Procedures' Annex 39 ) addressing the issues described in following.
Network Procedures for Renewable Sources Except for Wind and Hydraulic
The non-synchronous generator units with rated power of less than 1 MW cannot
consume reactive power from the grid, and shall have voltage control when necessary.
Generators of 1 to 25 MW must keep a power factor above 0.95, and shall have voltage control
when necessary. Generators above 25 MW must meet the requirements of Technical
Procedure No. 1. Synchronous units must comply to normal procedures, or with the ones of
Annex 4 according to their request, in case of impossibility.
A wind project may participate in the MEM if its minimum power is 1 MW. The wind farm
must respect a power factor of 0.95. Otherwise, it shall pay the costs paid to any generator to
maintain such an equipment, of 0.45 $/MVArh, if the impossibility of providing the reactive
power was informed in the station quarterly programming. Otherwise, the cost is $ 4.5 / MVArh,
and breaching of rules may result in disconnection from the network at critical moments.
Procedures separate wind farms into two types according to their influence on the
network: type A - the ones with the greatest impact and type B - the ones with less impact,
ranked by nominal power rating and the rated short-circuit power at the connection point.
Type A shall not cause voltage variations larger than 1%, 2% or 3% for networks with
voltages larger than 132 kV, between 132 kV and 35 kV, and lower than 35 kV, respectively,
(calculated for the lowest short-circuit power at the connection point). If the wind farm cannot
provide active power or the speed of the joint voltage control is not enough, the system operator
may require the installation of an additional equipment. The generator must also provide a
"countermeasure or strategy" for a simultaneous turbine shutdown situation due to extreme
winds. Shut-down and reconnection shall be made in a manner adequate to the primary power
reserves. The farm must support the same islanding / under-voltage conditions of other
generators, and provide generation control (increase or decrease) according to the operator.
TYPE B
If the wind farm meets the criteria for voltage variation of a type A central even in case
of an instantaneous shutdown of the nominal power, the wind farm is type B. The requirement
is to respect the 0.95 power factor, and the farm does not need to perform voltage control.
For both types, if necessary, a shunt capacitor may be used to respect the power factor.
In case of shut-down or start-up the voltage variation limit plus 1% must be respected.
Moreover, both types must show strength against frequency variations required from other
generators. Additionally, wind generators must comply with the IEC 61400-21 Standard "in
respect to harmonics, flickers, etc.".
According to Guzowski et al. (2008), the high risk of renewable generation projects is an
obstacle to their development in Argentina. Analyzing Law 26.190/2006, it may be concluded is
that its contribution to projects' risk reduction is modest. Despite the various tax exemptions,
there is no clear mechanism for investment in projects, and the delay of the executive to
regulate the law does not indicate a strong political will. However, with the 2009 ENARSA
bidding, it is possible to foresee a further development of alternative sources. Of course, this
depends on the enactment of new bids or of a reform of incentive mechanisms, such as an
increase in power tariffs. Furthermore, the bid’s projects constructions must be accompanied to
ensure that they are effectively implemented.
The Hydrogen Promotion Law No. 26.133/06, should have been regulated within 90
days after its publication, which did not occur up to April 2010. Thus, as in case of Law No.
26.190/06 (regulated three years after its enactment), the delay in the regulation gives a
negative signal on the Government commitment to support renewable energy generation.
The inclusion of wind power, biomass and SHP in the SIN has recently gained
prominence, as these have been addressed by specific auctions and by Proinfa. Other
alternative and renewable sources like solar and sea have not yet found the necessary political
support for them to be leveraged, despite the existence of an inter-ministerial institutional effort
underway to promote the introduction of solar PV energy in the country.
Presently, specific auctions for alternative sources are the main incentive mechanism
for the same in the country: the so far installed capacity contracted through these auctions sum
3853.5 MW of wind farms, and 228.24 MW of SHPs, and 3634.2 MW of biomass, totaling
7715.94 MW, an amount of power larger than the one contracted by Proinfa. However, through
Proinfa contracted SHPs added to a much higher capacity, i.e. 1191.24 MW.
Proinfa was created by the enactment of Law No. 10.438/2002 and, later, amended by
Law no. 10.762/2003, Law no. 11.075/2004, and Law No. 11,488 enacted as of June 15, 2007,
being regulated by Decree no. 5025, as of March 30, 2004 (Martins, 2010).
Despite criticism and mishaps, the program played an important role in helping to create
a market for renewable energy in the country, although its long-term component and effective
consolidator of these sources insertion in the national energy matrix, which would be its second
phase, have been dropped because of specific auctions.
Created in the wake of Brazil's 2001 energy crisis, Proinfa main strategic objectives
were: to diversify the Brazilian energy matrix and increase the internal supply security, provide
jobs creation and manpower training, and intend to lower greenhouse gases emissions. And as
a specific objective, increase the participation in electricity generation from wind , biomass, and
SHPs in the SIN (Casa Civil, 2002).
Proinfa was divided into two phases, and only the first one succeeded. In the first
phase contracting of 3,300 MW by Eletrobrás was determined, evenly distributed between
sources (1,100 MW for each), with generators' contracting guaranteed by Eletrobrás for 20
years after their operation start. In the second phase, these sources should attend, in 20 years
time, 10% of the annual national electricity consumption.
At the end of the first public auction, held in October 2004, 2527.46 MW was contracted
for the three sources, being: 1,100 MW of wind, 1,100 MW of small hydro, and 327.46 MW of
biomass (Varela 2009).As even with the second public call biomass did not reach the 1,100 MW
goal, the missing power amount (MW 414.76) was filled by wind power and small hydro
(Varella, 2009).
Table 54: Sources contracted by PROINFA, power per source (MW) and number of contracted projects per source
The price to be paid for these sources electricity in the first phase of the program was
established by the Government Executive Power through Administrative Rule MME No. 45, as
of March 30, 2004 (Table 55). Economic values were adjusted since their publication until the
signing of contracts with Eletrobrás according to the variation of General Price Index (IGP-M) of
the Getúlio Vargas Foundation. Even after the contracts entering, they continued to be
readjusted by the same index (Martins, 2010).
SHP 117.02
Wind 204.35/180.18 1
Wood 101.35
1
Notes: The maximum economic value of wind power was set at R$ 204.35/MWh and the minimum
economic value was defined as R$ 180.18/MWh.
Proinfa suffered a series of mishaps during the program first phase, with many contract
terminations, especially in the biomass sector which had six undertakings excluded from the
program, and many delays in construction of wind farms (in March 2010, 16 projects works had
not yet been started) (Mendonça, 2010).
Some difficulties were identified concerning the delayed entry into operation of the
39
Proinfa first phase projects, such as: (1) lack of investors' financial resources; (2) PIE
definitions restricted participation of utilities in the program; (3) the set up of a 60% domestic
38
According to Decree 4.541/2002, the initial forecasts for operation start of the Proinfa first phase
projects was until 12.30.2006, but due to the encountered difficulties, this date was postponed by Law
No. 11,075, published as of 12.31.2004 to 30.12.2008. Later this term was further extended by
Eletrobrás until May 31, 2009, through Resolution No. 171, dated as of February 19, 2009. Finally, Law
No. 11,943 as of May 28, 2009, set the operation start-up closing date as of December 30, 2010 for the
first phase of the program (Martins 2010).
39
Independent Power Producer means a legal entity or business consortium that receives a concession
or authorization to produce electric power for sale in total or part on their own account and risk.
For the specific biomass case, some reasons have been identified to explain the fact
that the planned 1,100 MW were not attained: (1) the prevailing market economic conditions at
the time had very attractive international sugar market values, making mill owners to prefer
investing in a business sector that was already technologically known, instead of actuating
under Proinfa; (2) the economic value established for biomass was considered relatively low by
the sugar-alcohol sector; (3) uncertainty among investors in relation on how much would be
necessary to invest to produce the energy to be made available to the network; (4) the
requirement for entrepreneurs to meet all criteria presented in the license guide for each source,
40
i.e., to submit the required documents for legal, fiscal, financial-economic, and technical
capacity, among others(Martins, 2010).
Proinfa foresees a second phase, in which sources should attend, in 20 years time,
10% of the annual national electricity consumption. However, according to Eletrobrás
information, the second Proinfa phase shall not take place, since specific auctions are presently
considered more appropriate to promote alternative sources in the country (Mendonça, 2010).
The program is coordinated by the MME and deployed with the participation of
Eletrobrás, according to art. 3 of Decree No. 4873, which established the LPT (Eletrobrás,
2010).
Decree No. 6442 expires in December 2010, but the Federal Government will extend
the program until 2011 primarily because of the challenges to attend the population located in
the Northern Region.
Because there are many isolated areas in Brazil and, consequently, difficulties in
41
extending the conventional power grid to these areas , the Program provides alternatives to
40
The difficulty found in attaching numerous certificates especially the ones regarding labor aspects,
because of the large number of formal and informal manpower associated directly or indirectly to
agricultural and industrial production of sugar and alcohol is mentioned as a factor for the lack of
interest of the sugar cane industry (Martins, 2010).
41
These are small scattered villages, of low income, poor infrastructure, at remote sites and requiring
high costs to construct long transmission lines and distribution circuits to serve a few consumer units.
The ANEEL Normative Resolution No. 83/2004 regulates technical, commercial, and
quality aspects establishing the supply procedures and conditions through the Individual
Systems of Electric Power Generation with Intermittent Sources (Sistemas Individuais de
Geração de Energia Elétrica com Fontes Intermitentes-SIGFI) as an option for universalization
of electricity services.. Each family shall receives such a system installed in its domicile.
According to the resolution, "intermittent source of energy is a renewable energy resource that,
for conversion into electricity by the generating system, cannot be stored in its original form”
(Art. 2, proposition V, sheet 2) (ANEEL, 2004b).
The Administrative Rule No. 60 as of February 12, 2009, created a new special projects'
manual for the Program encouraging mini-net projects for rural electrification and prioritizing the
use of renewable sources and environmental impact mitigation. Using renewable sources
compatible with local realities, the locally generated energy is supplied to households through
small sections of distribution networks built in primary and/or secondary voltages (mini-nets),
and comprising, when necessary, the use of non-conventional distribution networks, using
technologies supported by the legislation in force (Eletrobrás, 2009).These special projects are
85% subsidized of their direct deployment costs with CDE resources, with the remaining 15% in
return by the Executing Agents (Eletrobrás, 2009).
Mini-grid SIGFI
Therefore, despite the potential for renewable energies insertion within the LPT by
installing mini-networks and SIGFIs, gaps remain to be filled for the implementation of these
alternatives to become effective.
According to the Complementary Law No. 81, FIES revenues will consist of: budget
allocations from the State Fiscal Budget; resources from charges collected from beneficiaries of
the Industrial Development Fund of Ceará; resources arising from contributions of free
consumers or of incentivized energy, from the State of Ceará or other federation states, that
voluntarily wish to consume solar energy produced by plants located in the State of Ceará, in
accordance to the regulatory legislation, resources arising from agreements, settlements,
contracts and conventions entered into with entities of the Federal Public Administration or
Local Government agreements; conventions, contracts and donations by national or
international public or private, grants, aid, grants and bequests of any kind, from individuals and
corporations of the country or abroad; return of loans, taxes and amortization, provided with
FIES funds, earnings from financial investment of its resources and other revenues that may be
meant to the Fund.
As a result of the Law approval, in August 2010 were started the works of the first solar
PV power plant in Brazil, to be installed in Tauá inland of Ceará. The enterprise was announced
in 2008 by Company MPX of the EBX Group, but the installation was postponed expecting FIES
approval; it is pioneer in Brazil (Souza, 2010). The plant first phase will have 1 MW of installed
capacity, but was granted by ANEEL with a 5 MW power capacity.
Existing Bills
Although nothing can be taken for sure, and no one can assure the approval of bills in
progress, it is important to point out that the existence of a series of legislative initiatives
encouraging renewable energy in the country, pointing out that the issue has been receiving
increasing highlights. Table 57 presents some of the bills following procedures in the House of
Representatives and the Senate.
House of Representatives
.Amends provisions of Law No. 9.427, as of December 26, 1996, and Law
Bill No. 3,986/2008 Awaiting Opinion. 10.848, as of March 15, 2004, to promote generation and consumption of
energy from renewable sources
Bill No. 2,867/2008 Following procedures jointly. Authorizes issuance of Certificates of Alternative Energy.
Bill No. 2,737/2008 Following procedures jointly. Provide incentives to energy generation from solar source.
Disposes on renewable energy sources, aiming to promote their universal
use, distributed generation, and energy rationalization, amending Law No.
Bill No. 1,563/2007 Following procedures jointly.
10,438, as of April 26, 2002, to modify Proinfa and increase participation of
alternative sources in the National energy matrix.
Creates the Certificate of Renewable Energy Entrepreneur (CEER -
Certificado de Empreendedor de Energia Renovável), to be granted to
Bill No. 2,505/2007 Following procedures jointly.
natural persons or legal entities that produce electricity from alternative and
renewable sources.
Establishes tax incentives for the purchase of goods and rendering of
Bill No. 2,023/2007 Following procedures jointly. services required for the use of solar, wind, or other forms of alternative
energy.
Establishes the Brazilian Program for Decentralized Generation of Electricity
Bill No. 2,692/2006 Following procedures jointly.
and provides for other matters.
Creates a Program to Promote Renewable Energy and provides other
measures. "Explanation": Changes Laws Nos. 7990/1989, 9478/1997,
Bill No. 4,242/2004 Following procedures jointly. 9648/1998 and 9991/2000, establishing mechanisms for utilization of
renewable energy sources, stimulates production and research of "clean
energy".
Creates the Incentive Program for Renewable Energy, and gives other
Bill No. 3,259/2004 Following procedures jointly.
provisions.
Disposes on incentives for alternative energy generation and gives other
Bill No. 3,831/2004 Following procedures jointly.
provisions
Amends Art. 1 of Law No. 8001, as of March 13, 1990, constitutes a special
Bill No. 630/2003 Awaiting Resolution of Appeal. fund to finance research and foment production of electric and thermal
energy from solar and wind energy, and gives other provisions.
Senate
Authorizes the Federal Government to create the National Renewable
Senate Bill No 495/2009 Following procedures
Energy Agency (ANER - Agência Nacional de Energias Renováveis).
Source: Authors' elaboration based on the Portal of the House of Representatives and the Senate.
Research performed as of 23/03/2010.
Fiscal incentives
There are in Brazil some incentives for certain PV and wind equipment. The two most
important fiscal incentives that encourage use of solar and wind equipment are the Value Added
Tax (ICMS - Imposto sobre Circulação de Mercadorias e Prestação de Serviços) of state
jurisdiction, and the Excise Tax (IPI - Imposto sobre Produtos Industrializados) of federal
jurisdiction.
The agreement ICMS 101/97 grants ICMS exemption on some equipment and
components for use of solar and wind power and has been extended until 12.31.12 by
agreement ICMS 01, as of January 20, 2010 (CONFAZ, 2010). Table 58 illustrates solar and
wind equipment exempt of ICMS, being worth to highlight that the benefit is limited to
equipments exempt or taxed at zero IPI rate, according to Decree 3,827/01.
Wind turbines to convert wind energy into mechanical energy for water pumping and/or grain grinding.
Pumps for liquids, for use in photovoltaic DC solar energy system, with power not exceeding 2 HP.
Solar water heaters.
PV power generator with power not exceeding 750W
PV power generator with power output exceeding 750 W but not exceeding 75 kW
PV power generator with power over 375 kW
PV power generator with power output exceeding 75 kW but not exceeding 375 kW
Wind power generators
Non assembled solar cells
Solar cells in modules or panels
Tower to support wind power generator
The Ministry of Finance (2009) disclosed that wind power has received permanent IPI
exemption for wind turbines used in energy production from wind sources. It is expected that
this measure will increase investment in wind energy production and add to equipment
production in Brazil. The estimated tax relief is $ 89 million in 2010.
Under the MME was created the Working Group on Distributed Generation with
Photovoltaic Systems (GT-GDSF) through Administrative Rule No. 36 as of November 26,
2008. The administrative rule defines that the GT-GDSF will prepare studies, propose
conditions and suggest criteria intended to subsidize proper definitions for a policy proposal for
use of network-connected PV generation, particularly in urban buildings, as a factor in
optimizing energy demand management and environmental promotion of the country, for short,
medium and long-term.
The group activities have already ended and it is currently working on the final review
stage of a report. The MME disclosed that during the GT-GDSF activities evolution, it became
clear that the breadth of the discussion extended from a proposal to revise the legislation on
how to connect these systems to the network to preparing a proposal of broader scope, by
structuring an industrial development policy, the productive chain consolidation and evaluation
of technology improvement needs, considering proposals for research and development
projects. As a function of this new context, the MME Executive Secretary gave an orientation
to, before the report publication, held a technical meeting with key players of relevant sectors
(ANEEL, concessionaires, among others), and also with representatives of the Ministry of
Science and Technology (MCT), and the Ministry of Industry Development and Foreign Trade
(MDIC) to validate the report content and gather elements to generate a systematic action plan
to insert the PV solar technology into the mix of Brazil's energy options (Júnior, 2010).
Within the scope of the Ministry of Science and Technology (MCT) was elaborated a
Prospective Study on Photovoltaic Energy, conducted between 2008 and 2009 by the
Management Center for Strategic Studies - CGEE - by request of the Federal Government, with
the objective was to build recommendations on public policies for the PV industry development
in the country. Based on the knowledge and experience of hundreds of experts from the
government, academia and businesses, the study provides subsides for decision-making
reaching the horizon of 2025 and includes three phases: panorama, perspectives and
proposals. The last phase presents proposals for public policies based on four ideas (Table
59).
To incentive research and technological Coordinate R&D activities through an information network;
innovation. Modernize laboratories and establish pilot procedures;
Develop qualified human resources;
Establish international cooperation.
Regulate the connection of photovoltaic systems to the electric network;
Publicize photovoltaic solar energy to the society;
Incentivize distributed photovoltaic power generation connected to the electric network;
Creation of a consumer market.
Stimulate the creation of installation and maintenance service companies;
Incentivize large-scale photovoltaic generation for specific loads with stable demand;
Foment the implementation of mini-nets;
Insert the Renewable Energy subject into the Production Development Policy;
Establish local solar cells and photovoltaic
Stimulate the establishment of solar cells and photovoltaic modules industries.
modules industries.
Stimulate the establishment of industries of equipment for PV systems;
Establish industries of solar grade and
electronic grade silicon.
The study also concludes that the government should invest in the development of
silicon and solar PV industries given their potential to: generation of thousands of high-level jobs
in the country; socioeconomic wealth generation and distribution; development of internationally
competitive industrial park; production of renewable and environmentally clean energy, since
the high solar potential in the country.
Auctions
With the Brazilian power sector reform in the 90's and the reformulation of electricity
sale model in 2004 by Law 10848 as of March 15, 2004, considerable changes occurred in
energy commercialization in the country (Casa Civil, 2004a). Decree 5163 as of July 30, 2004,
sets out the basis for electricity commercialization: creation of two contracting environments,
The Regulated Contracting Environment (ACR- Ambiente de Contratação Regulada) and The
Free Contracting Environment (ACL- Ambiente de Contratação Livre); competition for
The ACR covers the purchase by distribution companies in public auctions to attend
their captive customers, and the free contracting environment, includes the purchase of
electricity by non-regulated entities, such as Free Consumers and Traders.
Auctions can be for new energy, for existing energy, for energy adjustment, or auctions
can be specific for a set of technologies (renewable), for a single technology (wind) or for a
project (large hydro).
Every year, there are two auctions for new energy: A-5 and A-3, which promote the
construction of new capacity to meet the utilities' demand increase with contracts having
between 15 and 30 years duration (Barroso, Bezerra, and Flach, 2009). According to Decree
5163, new generation projects are those that at the publication date of the respective auction
call: are not holders of concession, permit or authorization; or part of an existing development
that may be subject to extension, limited to the increase of its installed capacity.
Auctions of existing energy are called A-1 and complement new energy contracts.
Contracts have a duration of 5 to 15 years and are held annually (Barroso, Bezerra, and Flach,
2009).
Adjustment auctions are called "A-0". The contract term is up to two years, being held
3-4 times per year, and starting in the same year. The distributor has a 1% limit of its total load
to be contracted in this type of auction (Barroso et al., 2009).
Special auctions are a function of the political interest to promote a given technology, as
alternative sources, strategic projects to the country, such as large hydro and power reserve
auctions. The current legislation does not set a schedule to perform this type of auctions
(Barroso, Bezerra, e Flach, 2009).
The first and only alternative sources auction was held on June 18, 2007, and included
small hydro, thermoelectric and biomass (bagasse and poultry breeding) power plants, when a
total of 541.9 MW was contracted. The first auction of reserve energy (LER) commercialized
biomass energy, with 15 years contracts and operation start in 2009 and 2010, when a total of
2379.4 MW was contracted.
The first special auction major success in promoting renewable energy was the first
specific wind source auction (a second reserve energy auction) held as of December 14, 2009,
which resulted in contracting 1805.7 MW, at an average selling price of R$ 148.39/MWh. In
relation to the initial auction price of R$ 189/MWh, the final average price of R$ 148.39/MWh,
represents a discount of 21.49%. With the auction, it will be feasible to build a total of 71 wind
generation projects in five states in the Northeast and South regions (EPE, 2010).
According to the rules established by the MME Administrative Rule No. 211, as of May
28, 2009, the Contract for Reserve Energy resulting from the auction will be signed as quantity
of electricity power from wind source, with supply starting in July 1st, 2012 and contractual term
of 20 years.
The first auction to contract Isolated Systems electric power was held in 04/09/2010.
The MME, through Administrative Rule No. 78, as of March 3, 2010, approved the Auction
Systematic for Contracting Isolated Systems Electric Energy and Associated Power, specific for
biomass source, of which deals the MME Administrative Rule No. 56 as of February 04, 2010.
Just a little over 8.1 MW were traded in the bid for three projects that will sell the energy to
The Alternative Energy Sources (A-3 and Reserve) second auction of 2010, held in
August, 25 and 26, 2010, resulted in contracting 2892.2 MW of installed power, corresponding
to an average power of 1159.4 MW. Overall, were contracted 70 wind farms, 12 biomass
power plants and 7 SHPs that will receive investments of approximately R$ 9.7 billion.
Thus increasing the commercialization possibilities for energy coming from renewable
sources in the free market.
Studies were conducted to establish a policy for the development of PV industry in the
country and there is an expectation for its establishment in coming years. Thus, the FIES has
distinguished itself nationally as a pioneer in attempts to development the PV sector in Ceará.
El Salvador
Law of Fiscal Incentives to Promote Renewable Energy in Electricity Generation.
Approved in December 2007 by Decree No. 462, this law establishes a package of fiscal
incentives for natural persons or legal entities that invest in renewable sources for electricity
generation, among which stand out: i) exemption from import tariffs for capital goods and other
inputs associated with power stations up to 20 MW, for the first 10 years; ii) exemption from
income tax during the first 5 years for power plants between 10 MW and 20 MW, and during the
first 10 years for power plants with less than 10 MW, and iii) projects over 20 MW can deduct
from the income tax the cost of all studies related to the project.
Guatemala
Law of Incentives for the Development of Renewable Energy Projects and its
Regulation. The Law aims to promote the development of renewable energy projects and
establishes fiscal, financial and administrative incentives for their realization.
Honduras
Law of Incentives for Renewable Energy Projects. The Law seeks to develop small
projects that use natural resources in counties, with the aim of promoting economic and social
development of its members and of surrounding areas.
Nicaragua
• Law for Promotion of the Hydroelectric Subsector (Law No. 467). Allows the
development of hydroelectric projects of up to 5 MW and gives fiscal incentives.
• Law for the Promotion of Electric Power Generation with Renewable Sources (Law
No. 532). Establishes fiscal, economic and administrative incentives for the
development of renewable energy projects.
The General Law of Electricity Services (LGSE), enacted in 1982, was amended in
2004 by Law 19,940, known as Short Law I, and in 2005 by Law 20.018, known as Short Law II.
According to Chilean regulation (CNE, 2006) the behavior has historically been neutral
regarding generation sources and employed technologies. Thus, Law 20,257 was published in
2008, based on the quota mechanism, which establishes that generators should sell increasing
participation goals of renewable energy under penalty with a fine.
Technical rules for connection and operation of an ERNC generating system differs
depending on the selected connection. Figure 22 presents the rules used depending on the
connection to the distribution or transmission system.
Furthermore it provides for payment exemption for using the transmission system for
42
MGNCs (with a differential treatment for units smaller than 9 MW and units between 9 MW
and 20 MW of installed capacity) (CNE e GTZ, 2009).
42
MGNC: Non-conventional generation whose capacity installed to the system is less than 20 MW. This
category also includes enterprises smaller than 20 MW based on ERNCs, including cogeneration projects
based on fossil fuels smaller than 20MW and efficient.
Figure 23: Exemption from payment for MGNC units use of the transmission system, as a function of installed
capacity.
Law 20,018 establishes that electricity distributors should celebrate their power supply
contracts with the generators through open, transparent, public auctions, overseen by the CNE,
where at competing prices energy is purchased by the lowest price.
The distributors will pass on to their regulated clients the contracts average price (price
weighted by the offered volume) instead of the previous "precios de nudo" (open positions price)
(IEA, 2009; MEFR, 2005).
Generators are free to choose the energy price to auction, but the CNE sets a ceiling
price through a formula set by law. If the auction process is not successful due to lack of
generators' interest or failure to comply with auction reference terms, the CNE may approve an
increase of 15% on the previously ceiling price. Distributors are compelled to conduct long-term
contracts with generators, and it is required a three-year period between the auction and the
start of supply as defined in the contract (IEA, 2009).
The two decrees below regulate the Law Cuts II (Law 20,018).
The requirement applies to generators that supply energy to the SIC and to the SING,
st
whose premises were connected to the system since January 1 , 2007. Legislation states that
the required 10% percentage shall be achieved gradually by increasing the volume of such
energy type, so that, between 2010 and 2014 it reaches 5%, and increasing by 0.5% annually
from 2015 onwards, until reaching 10% in 2024 and ensuring this participation until 2030.
st
The generators who do not evidence compliance with the quota on March 1 of the
44
following year must pay a fine of 0.4 UTM per megawatt-hour (MWh) of non-accredited
renewable non-conventional energy. The charge will increase to 0.6 UTM/MWh for companies
that repeat non-compliance over the next three years. The law also provides that the collected
funds by the breach of the law be distributed, in proportion to the energy consumed by each
client, between regulated and free clients whose suppliers have obeyed the quota, thus
establishing an incentive to comply with the law. It is noteworthy that in Chilean auctions each
distributor sells at auction requirements according to their needs without being made unified
auctions in the Brazilian case (Barroso, Bezerra & Flach 2009). Thus, it is possible that two
distributors are served by a different set of generators, thus enabling the transfer of the money
collected through fines only to customers of the distributors whose generators have met the
requirements of the Law.
st
Law 20,257, known as the Law of ERNCs, published in April 1 , 2008, amends the
LGSE aiming to incentive ERNCs to entry in electric systems. The standards set for the proper
implementation of Law 20,257 are defined in Exempt Resolution No. 1278.
43
PMG: Means of generation whose installed capacity to the system equals to, or is smaller than 9 MW,
connected to a transmission system installation, to a sub-transmission, or additional (Article 1) (MEFR,
2006).
44
UTM: Monthly inflation index. Monthly value available at:
http://www.sii.cl/pagina/valores/utm/utm2010.htm
The transmission agent that requests the subsidy should connect to the SIC or SING, at
least, three ERNC projects (CORFO, 2010).
The subsidy payment will be made annually in foment units (UF) between years 6 to 10
of the line operation and will be equivalent to the lower value between: 18,000 UF; 5% of the
project initial investment; the product of the potential transmission tariff for the period i estimated
at the time of the subside request and the difference between the projected and actual demand
for potential transmission for period i (whenever this difference is positive); the difference
between annually projected power input and real power input obtained by the project for the
corresponding year as contained in the petition (whenever the difference is positive) (CORFO,
2010).
Existing Bills
As of January 21, 2009 a bill began to follow procedures in the Chamber of Deputies of
Chile that introduces changes to Law 19,657 on geothermal energy concessions (MH, 2009). Its
aim is to increase efficiency in the allocation of geothermal energy concessions; ensure
sustainable use of geothermal production resources, and improve the State role in promoting
and monitoring commitments.
The main content of the bill refers to the relaxation of conditions for determining the
territorial extension of a geothermal power concession and the obligation for the company to
provide a guarantee at the exploration concession to ensure compliance of works and to
committed investment; incorporating the definition of exploitation of the obligation to conserve
the geothermal resource through sustainable management of the activity and establishment of
an incremental value of the patent to be paid by the concessionaires operating until the project
begins production. This gives a signal to companies that received the exploration concession to
proceed quickly to the development stages of geothermal production. The bill also proposes
the reduction of some procedural deadlines, such as halving the time required for the authorities
to make available the information requested.
Table 60 includes other smaller bills that are following procedures, which favor ERNCs.
Bulletin No.: 6605-08 Obliges electricity distribution concessionaires to allow and implement the
Following
connection of net metering system to ease the generation of renewable non-
Proposed in: 09/07/2009 procedures
conventional energy.
The program, still under preparation, shall support the following activities: (i) incentive
investment in sustainable energy in isolated communities, promoting the use of ERNCs for self-
generation and to replace sources of power generation based on fossil fuel, and improve
coverage and service quality;(ii) promote rational energy usage, and (iii) strengthen key
institutions such as schools, hospitals, and clinics (BID, 2010).
In the Latin American context, regulation 370 stands out because it is the only one that
provides a subsidy for additional transmission lines to connect renewable sources' generation
projects.
3.2.5 COLOMBIA
As in many South American countries, the Colombian electric system has undergone a
makeover in the 90's. According to Ruiz et al. (2006) since the 90's other changes have
occurred, which negatively influenced the development of alternative energy sources. Several
institutions have been remodeled or their focus was diverted from the promotion of alternative
energy sources, such as the MME Division of Non-Conventional Energy (suppressed),
remodeling of the Colombian Institute of Electric Energy (which became the Institute for
Planning and Promotion of Energy Solutions - Instituto de Planificación y Promoción de
Soluciones Energéticas para las Zonas No Interconectadas) and the suppression of the Institute
of Nuclear Sciences and Alternative Energies, with the focus being the creation of regulatory
bodies.
Furthermore, according to this law, the connection cost of a generator to the national
interconnection net is a responsibility of the same, but the access to the transmission network is
free, if the established standards are respected. This access can be made in the regulated or
free mode. In the free node, the agent does not assume to supply a fixed amount of energy, and
prices are determined by the market, while that in the first mode, the agent signs a contract to
supply at a fixed price.
The institution responsible for the system dispatches is the national dispatch center, a
part of the XM company, while regulating the network procedures is a function of the National
Operation Council.
A program was created, the Program for Rational and Efficient Use of Energy and Non-
Conventional Forms of Energy (PROURE), headed by the MME, which requires electric
companies to comply with URE programs.
The regulation obliges the MME to prepare a priority program with a pilot project for the
development of renewable sources, in non-interconnected areas, for use of funds from the
Financial Support Fund to Energize Non-Interconnected Zones (which receives 1$/kWh
dispatched in the wholesale market, according to Law No. 788/2002). Furthermore, in the
PROURE program listing contained in MME's resolution 18-0609/2006, activities related to
generation by renewable sources are restricted to non-interconnected areas.
The agreement No. 6 of 2006 for use of the National Benefits, Benefits Reassignment,
and Compensation Fund allows the use of this fund by departments and municipalities for the
development of electric generation projects, both by conventional and alternative sources.
However, "the costs of activities to be undertaken must be consistent with the averages of the
region where the project will take place" (Article 4), which could deter the renewable source
generation project development, pending on this paragraph interpretation.
Technical Standards
The national Colombian standardizing entity ICONTEC had in 2003 a "Technical
Committees for Standardization Related to Alternative Energy" (ICONTEC [s.d.]). Currently
there are standards for wind generators and PV systems.
These deficiencies compounded with the absence of other support mechanisms and
also the existence of requirements for the release of funds compose a negative scenario for the
development of non-conventional sources of electricity generation. The lack of a mechanism to
stabilize revenues of a generator who uses renewable energy sources is evident, because if he
fails to sign a freely agreed up contract to sell his energy, he must sell the same for the system
spot price, or slightly below it. Fundación Bariloche et al. (2007) indicate that although Colombia
has edited a number of laws on the rational use of energy and non-conventional sources of
energy, these laws are vague, without determining devices and of little strength.
Ruiz et al. (2006) agree that the mechanisms implemented by these laws are
insufficient. Furthermore, they indicate that no specific considerations are made on the
interconnection of alternative sources' generation projects that prioritize their dispatch and take
into account the technical characteristics of sources. For wind power this is confirmed by notice
E-2006-000856 of the Regulatory Commission of Energy and Gas (CREG, which is responsible
for developing network procedures) that states that "the CREG has not issued specific
resolutions governing the issue of wind generation", what is confirmed by Millán (2009). For
other technologies, as we shall see, there are considerations for PV solar and small-scale
hydroelectric projects, but only for non-interconnected zones.
Participation in the centralized dispatch is mandatory for power generators greater than
20 MW, and optional for generators with power between 20 and 10 MW. Participation in the
centralized dispatch is forbidden to power generators under 10 MW, according to
communication CREG-3073/2001.
Thus, generating plants participating of the centralized dispatch can sell their energy
through bilateral contracts, or in the open market, at the exchange price. Nevertheless, this
does not mean that the plants will be effectively dispatched, since this decision is the result of
the economic dispatch simulation. The difference is paid by the reconciliation price - negative if
actual generation is less than contracted and positive otherwise.
Cogenerators with excess energy but without guaranteed power and not a MEM
participant can only sell the energy to traders who will deliver it to non-regulated users. When
MEM participants, the energy must be sold on the exchange market subject to the rules for firm
generation.
Support Contracts
Smaller plants operating out of the MEM and who enter energy supply contracts with
non-regular users must sign a support contract with another generator or supplier (at free price)
to ensure delivery of the contracted energy at all times (Resolution No. 86/1996). Regulated or
non-regulated cogenerators must sign a support contract to obtain electric energy above its
production capacity.
Participating units of primary regulation shall provide the primary regulation service at a
frequency of up to 3% of their scheduled capacity. If the unit does not provide the regulation
service, it must pay a reconciliation cost for each day that this event occurs. All units centrally
dispatched must contribute to the payment of secondary regulation service charges.
Responses to Transients
According to Millán (2009) and the Colombian network code (Resolution No. 25/1995) in
case of a 220 kV-system three phase or a 500 kV-system single-phase short circuit there must
not be a voltage drop below 0.8 pu during more than 700 ms, and furthermore, the voltage
during normal operation should not vary more than 0.9 to 1.1 pu. Instantaneous shut-down is
not allowed for instantaneous frequencies in the range of 57.5 - 63 Hz, and from 57.5 to 58.5 Hz
or 62 - 63 Hz, the generating unit must remain connected for at least 15 s.
If the total individual payment (due to the charge) to the generator is greater than the
amount payable (to pay the total system charge), this generator is entitled to receive the
difference for the availability, regardless if this available power was used, thus setting an
additional compensation to the effective supply of energy (see (XM, 2007)). The amount
payable is determined by multiplying the actual generation (for centrally dispatched generators)
or by sales at the market (for non-centrally dispatched generators) at the Real Equivalent Cost
of Energy.
For non-centrally dispatched plants, firm energy depends on the net power rating and
on the availability, to be specified by the generator. If he does not indicate the availability, 35%
is assumed. This data is subject to audit for comparison with historical data. According to
Caspary (2009), the charge for availability that must be paid is set at 13.9 US$/MWh until 2013.
kW value $/kWh
SHP
Micro turbines 1 100 307.34
Solar Photovoltaic
Remuneration for other technologies shall be defined by the CREG. The maximum
return on admistration and O&M of these systems is:
$ as of 12/ 2006
These payments are adjusted according to the index of producer total prices.
These resolutions also have compensation schemes for diesel generation systems.
While this resolution establishes the maximum pay, Resolution No. 56/2009 determines that the
rate of return on invested capital to be used for determining generation and transmission
remuneration in ZNIs is 14.69%.
Considerations
The 14.69% rate of return is higher than the one applied to transmission of electricity in
the Colombian electric sector (11.50% according to CREG Resolution No. 83/2008), but may be
lower than the rate of return used by the private sector. Thus, given the possible difficulties that
a generation development project using renewable sources in non-interconnected areas may
face, it is possible that this rate is too low, particularly considering that it is the same one for
projects that use alternative energy sources and for projects with diesel generators. This last
technology can be the safest choice for investors, as he will be paid at the same rate of return,
but will use a conventional technology, thus reducing risks. Comparing the maximum allowable
pay and costs given in Caspary (2009), the payment resulting by applying the rate of return for
solar PV projects will possibly be placed below the limit, but more accurate data and current
costs of these projects in Colombia are not available.
Bills
Only one bill on renewable electricity generation was found, and with an effect contrary
to the development of the same.
This bill establishes an extra charge of 6% on the revenue generated from electricity
sales stemmed from renewable sources, in favor of the department or county, which may be
deferred by 7 years. Bill No. 171/2004 apparently has the same wording. There is no indication
of new developments of the bill.
3.2.6 MEXICO
Mexico has made efforts to boost development of renewable energy. These efforts
originated from the oil crisis and the increased awareness of resources' availability, as well as of
the environmental consequences of using fossil fuels.
In particular, the "Law on the use of renewable energy and financing of the energetic
transition", enacted as of November 28, 2008, intends to regulate the use of renewable energy
sources and clean technologies to generate electricity for purposes other than providing public
service power, as well as to establish the national strategy and financing instruments for the
energetic transition. This law includes as renewable energy, among others: wind, solar
radiation, water movement in natural or artificial channels, the ocean energy in all its forms,
geothermal heat and bioenergy, as determined by the Law on Bioenergy Promotion and
Development.
Derived from this law the Special Program for Renewable Energy Development was
published intending to increase the percentage of renewable energy installed capacity from
3.3% in 2008 to 7.6% by 2012.
On the other hand, the Energy Regulatory Commission has established specific
regulations for renewable sources of energy, aiming for promoting the development of electricity
generation projects, with the user invoice showing his contribution of electrical energy injected
into the network. Among them standout:
3.2.7 PERU
Although the Peruvian electricity sector reform dates from the 90's, only recently some
special devices dedicated to encouraging the interconnected generation from renewable energy
sources have been implemented (although the geothermal source dedicated legislation goes
back to 1997). However, since the enactment of the main law, the government has worked fast,
completing the first bid for contracting new developments in 2010 and developing the adaptation
of networks' procedures. This adjustment, however, still needs to be improved and has been
criticized, for example, about the treatment given to wind power. Nevertheless, the Peruvian
government demonstrated agility in implementing an incentive policy.
45
Transport (many times "porte" in the original language) is the use of the power company networks to
carry power between the generation central and the installation that makes the end use of a self-
sufficiency project .
Law No. 25,844/1992 - Electrical Concessions Law, and Law No. 26,734/1996
The electricity sector Law No. 25,844/1992 created the Commission of Electric Rates
and the COES - Committee for Economic Operation of the System. In 2000, the Commission
was incorporated into the OSINERG - Organismo Supervisor de la Inversión en Energía (the
Supervisory Agency for Energy Investment). The COES is responsible for elaboration of the
network procedures of the Peruvian electric power system. OSINERG was created by Law
26.734/1996, and its attributions were expanded in 2002 and 2007 to include mining and
hydrocarbons.
Law No. 25,844 establishes the need for concession to use public assets for generation,
allowing restricted concessions for two years to perform studies, extensible for more 2 years. To
obtain a definitive concession for generation projects, it is required to submit the authorization to
use natural resources, the project plans and various other warranties. Access to the
transmission system is free, while system usage fees and enlargement costs arising from the
connection shall be borne by the connection beneficiary.
Price regulation is mandatory for transfers among generators, for payment of the
transmission system usage, and for power supply to distributors as a public service. The law
also establishes the concept of connection toll (peaje de conexión) and tariff income. The
second concept is a charge due to "power and energy delivered to, and removed from bars,
valued at their respective bar tariffs" (Art. 60). The connection toll is proportional to the
generator firm power and covers the difference between the cost of the transmission system
operator and the income from the tariff collection, and is how the renewable energy generation
costs are charged by their excess over spot prices, according to Decree No. 1002/2008.
This law also establishes the possibility of splitting taxes on capital goods' imports for
new projects and determines that hydroelectric and geo-thermoelectric exploitations shall pay a
"retribution to the State", which may not exceed 1% of the average power generation cost.
Legislative Decree No. 1002/2008 and regulation by the Supreme Decree No. 50/2008
To obtain definitive concessions the renewable electric generation projects are still
subject to the rules of the electric concessions law. However, Decree No. 1.002/2008 modifies
some determinations. Generation projects that require granting of a final concession include,
besides hydroelectric power stations larger than 500 kW, renewable source energy generation
The renewable energy generator must pay the energy transmission cost, and the
connection costs to the transmission system shall be determined by OSINERGMIN. If there is
excess transmission or distribution capacity, these generators have connection priority, until, at
maximum, the percentage established by the Ministry of Energy and Mines for RER
participation in the power matrix.
The National Council for Science, Technology and Innovation in partnership with the
MEM shall implement mechanisms to incentive research in renewable energy. Furthermore, the
MEM should develop a National Energy Plan up to one year after the enactment of the law,
which must be renewed at every two years. Only recently measures were adopted to prepare
such a plan (MEM, 2010a).
The law regulation is under discussion (Law No. 1002) since October. The regulation
mechanism established for achieving the participation objectives set for electric energy
produced from renewable sources is a bidding mechanism. Each technology share in the
auction shall be based on the national plan for renewable energies, on entrepreneurs' interest
expression and in the projects that have requested or hold a concession. Auctions shall be
undertaken by OSINERGMIN and should occur at intervals not smaller than two years.
To participate in the auction, the entrepreneur shall be or have been the temporary
holder of a concession; in the first case, he shall ensure that studies are being conducted, and
in the second demonstrate that they were finalized. The plant design shall be presented
attending the nominal power rating and capacity factor, budget, schedule and a bank guarantee
to be replaced, in case of award, by another guarantee for the contract.
When the required energy is not fully or partially contracted, a new auction shall be
called within 30 days. Furthermore, according to the legislation, the first auction shall not follow
the percentage of RER participation of the energy matrix, but require 500 MW of power with a
minimum capacity factor of 0.3 (1314 GWh per annum).
Moreover, the permit holder must pay the validity right. There is one more contribution
to be paid by the concession holder, which may not exceed 1% of the annual revenue of the
entrepreneur. Finally, it is charged an annual fee payable to the State, corresponding to 1% of
the electricity extracted from geothermal sources valued by the average price at the generation
level.
Bid with Renewable Energy Resources No. 1/2010 - Announcement, Results and Second
Call
The first call for bids for generation of electricity with renewable energy resources
(OSINERGMIN, 2009) determines the bidding of contracts for delivery of 1314 GWh annually
(500 MW with a capacity factor of 0.3), as determined by Decree No. 1002/2008 and its
regulation.
Wind projects have a maximum power in each authorized point of delivery (points of the
transmission system with voltage between 60 and 220 kV, mostly 220 and 138 kV). Other
projects may have the desired power, but always at set points, which include transmission
system bars with voltages between 22.9 and 220 kV, also mostly 220 and 138 kV.
In the bidding held in February 2010, the maximum prices established and the obtained
results were:
Proposed Projects 2 6 6 14 17
Contracted Projects 2 3 4 9 17
It should be noted that the wind power projects selected have high capacity factors (c.f.)
(43.46 and 52.93%), but these were located in areas with over 7.8 m/s average winds at 80 m
height (for projects with c.f. of 43 and 52.93%) and 6-7 m/s (c.f. of 46%), according to the wind
46
atlas of Peru .
As the first auction was declared partially vacant of solar and biomass sources, it was
determined to perform a second tender for these sources (and with the participation of
hydroelectric power), with bid opening taking place in July 23, 2010. The required energy is 419
GWh/year for biomass and 8 GWh/year for solar energy. Hydroelectric power may participate,
up to a limit of 338.29 MW.
Technical Standards
The Peruvian technical normalization is performed by the INDECOPI. Until April 2010
standardization for use of renewable sources was scarce, with one standard on technical
characteristics of PV panels up to 500 Wp (NTP 399.403:2006). In the listing of technical
standards under preparation none refers to any renewable energy sources, although in a 2008
presentation among the issues being addressed were included hydraulic energy (sea and
conventional), solar PV and wind normalization (Toro, 2008).
46
www.dger.minem.gob.pe/AtlasEolico/PeruViento.html.
New legislation advances only came with the cogeneration activity regulation in 2006,
which determined cogeneration dispatch priority when associated to production needs,
establishing an important mechanism to the feasibility of surplus energy sale.
Legislative Decree No. 1002 and its regulation, enacted in 2008, represented an
important milestone to the development of renewable energy, with important features. Indeed,
by establishing clear promotion mechanisms that go beyond tax incentives - biddings - and
determining dispatch priority for the energy contracted in auctions, the legislation is
characterized by a clear definition that not always can be found in similar initiatives.
Furthermore, it was determined the development of a national renewable energy plan with five-
year participation targets, that however presents delays.
As other similar laws, Decree No. 1002 did not set penalties if goals are not met, and
until June, 2010, the national plan had not yet been prepared. Ramírez (2009) points out that
the contribution to Peru's sustainable development is marginal, the continuity of bids is limited,
and non-interconnected systems are not considered. Furthermore, holding a first auction
without a further goal would, of course, generate uncertainty.
Finally, one important issue is the need for generators to associate themselves to
participate in the COES. There is a requirement that only those generators (generators or
associates) totaling at least 1% of the interconnected system installed capacity can be part of
the COES (technical procedure No. 20).
Before the installation several tests shall be performed for the operation of an electric
wind central. Wind farms should "have the necessary control devices" to meet COES's requests
for supplied active power control and monitoring mechanisms to inform COES the total active
power, deviation from the reference value and possible power as a function of wind speed. It
shall also be capable of reducing the active power to 20% of the nominal, and have control of
reactive power, capacity to resist under-voltage and over-voltage and ride-through. Finally, the
normal operating frequency range for wind farms is determined as 59.4 - 60.6 Hz and must
remain connected by minimum times for frequency ranges as 58.4 - 59.4 Hz and 60.6 - 61.6 Hz.
Thus, one can consider that while the payment for firm power is a mechanism
conducive to the development of renewable electricity generation many alternative sources are
marked by inconstancy, seasonality or unpredictability, which cause uncontrollable oscillations
in the supplied energy for a given period, and require frequency and voltage regulation, which
can be a burden to the non-conventional generator, even though costs are prorated according
to the total active power availability.
Thus, a generator using renewable energy that implies additional costs to the system for
maintenance of ancillary services must pay costs only in proportion to its participation in energy
generation, which, initially at least, will probably be small, compared to conventional sources
installed capacity. Additionally, costs for connection to the net are borne by the generator, what
will increase the project cost.
Furthermore, the need for association to participate of COES (that requires the
association to have, at least, 1% of the system installed capacity) may represent a major
hindrance to the entry of renewable energy generator units, since their size is usually small.
Bills
Three bills that were circulating in the Peruvian Congress by 2008, Projects No. 1887,
1799 and 1588 originated the Legislative Decree No. 1002/2008. Thus, the only remaining bill in
Congress is the project No. 3.074/2008.
This bill establishes that final concessions should be granted only to projects with at
least 50 wind turbines, present since the operation start. Manufacturers of wind turbines and
manufacturers of other goods necessary to wind generation would be exempt from any import
duty, as well as other non-manufacturer importers (for a period of ten years). It also allows
accelerated amortization of investments in wind generation for income tax purposes (20%
annual maximum, i.e. in, at least, 5 years).
Accelerated amortization has already been established by decree No. 1058/2008, and
by the Law of Electrical Concessions (LCE No. 25.844/1992) the import tax on equipment for
power generation can be divided into 36 payments. Thus, this project innovation is limited to
wind equipment exemption from import taxes, but due to the existence of the LEC this benefit is
reduced. Moreover, the requirement of a minimum number of wind turbines for wind farms (50)
can easily create more difficulties for wind power generation than the possible benefits of the
project.
Therefore, in the Peruvian Congress, there is no project of great interest for the
development of renewable energy. However, the existing legislation is quite important, and next
efforts should be concentrated on changing the COES technical procedures.
The Development Plan for Renewable Sources of Energy considers the following
renewable sources of energy: solar (PV and thermal), wind, biomass, mini-micro hydropower
and geothermal (slide 14) (Márquez, 2009).
According to the USB (2010), this is the first time that the alternative energy theme is
part of a development plan of the Venezuelan government. For this purpose were created in
July 2007 the "Committee for Renewable Energy" and the "Sub-Committee on Wind Energy".
The information obtained on the plan is detailed in the chapter on the current market of
renewable sources and trends in Venezuela.
Resolution No. 77
Resolution No. 77, among other things, creates the National Register of Renewable
Energy, to be conducted by the Department of Alternative Energies of the "Ministry of People's
Power for Energy and Oil".
The National Register of Renewable Energy objective is to provide a database for the
State use that shall serve for informational purposes and control of activities related to
renewable energy, including equipment, research and development projects (MENPET, 2007).
The resolution includes the following renewable energies: solar, wind, hydro, biomass,
geothermal, tidal, and hydrogen.
3.3.1 ARGENTINA
The use of renewable sources in Argentina showed an important development in recent
years, as illustrated by institutional analysis of relevant players. The recent installation of new
industry players in the country and the creation of institutions to promote renewable electricity
generation, plus the enactment of specific laws and a more active governmental and academic
actors' participation has occurred, although it should be noted that the process is just beginning,
and many actors have no tradition in developing renewable energy in the country.
Solar PV
CSP
Biomass
SHP
Geothermal
Oceans
Wind
The biggest breakthrough came in with the introduction of new players related to
biofuels (mainly biodiesel) and wind power generation, while other technologies for electricity
generation were less noticed, and with unequal development. Thus, wind energy and biomass
had a major development related to the existent potential in Argentina, while the actors, as well
as projects, involved in the development of concentrated solar energy or geothermal energy are
less numerous. Thus, most energy consultants in Argentina specialize in one of two sources of
energy: biodiesel or wind power. Moreover, sources such as oceans and seas are little
mentioned, and hardly any institution deals with them.
Faced to this reality, it is interesting to note the importance of the ENARSA bidding No.
EE 001/2009, for the number of covered sources. Indeed, given the diversity of sources (nine)
to contract the generation capacity, it is expected to occur a diversification of the country's
players to include less well-established sources such as solar, PV, and geothermal. However,
given the fact that of the nine sources only four projects were contracted, it is necessary that
next bidding announcements by the Argentine government be successful, mainly because three
of the technologies that were contracted are already well developped (wind, small hydro, and
biofuels for power generation) (ENARSA et al., 2010; SEN, 2010a).
Another trend noticed by the institutional analysis of the Argentine energy sector is the
diversification of energy companies in the oil and gas sector, which recently lead to the
development of wind farm projects and to biodiesel production.
Argentina has some domestic manufacturers, especially for wind and hydraulic energy,
besides some prototypes of small equipment, some in experimental phase, for concentrated
solar power and wind power.
As for class associations, although few, CADER's work is significant and its recent effort
to broaden the scope interesting. On the other hand, the wind sector already counts with an
adequate number of associations. The presence of a Greenpeace representation in the country
indicates a stronger actuation together with environmental organizations, whose efforts are
supported by research organizations such as the Argentine Institute of Energy.
Finally, the number of potential financiers is great in Argentina, but the World Bank
focuses on rural electrification, as well as some other financial institutions, and funding for
research and development could be more extensive. This deficiency in research is partially
compensated by companies of the sector, such as IMPSA.
3.3.2 BRAZIL
The development of renewable alternatives depends on the strength of various local
institutions such as research centers, manufacturers and trade associations.
Table 65: Analysis of main institutions fomenting alternative renewable sources in Brazil
Solar PV
1
CSP
Biomass
SHP
Geothermal
Oceans
2
Wind
1
Notes: The Canadian company Naanovo Energy intends to build a factory for solar panels to meet the
2
demand of the first solar thermal plant in Brazil to be built in the city of Coremas, Paraiba; Many wind
turbine manufacturers have shown interest in opening factories in the country, but so far there are only two
factories. The deficiency of the Brazilian wind industry park is pointed out by many authors as a cause for
the delay in the Proinfa projects..
Table 66: Analysis of main institutions fomenting alternative renewable sources in Central America
Specifically, the names of agencies and organizations identified in Central America are:
• Regional bodies
o BUN-CA
o Costa Rica Electric Institute and National Company of Light and Force
of Costa Rica
• Distribution Companies
o El Salvador
o Panama
o Nicaragua
o Germany
o Finland
o IDB
o World Bank
• Project developers
3.3.4 CHILE
The development of renewable alternatives depends on the strength of various local
institutions. In Chile, there are research centers, trade associations and engineering firms
focused on ERNCs development. However, one major obstacle to the development of
renewable sources in the country is the absence of local manufacturers of major equipments,
increasing costs, and delaying the start-up of various enterprises. Electricity generation from
biomass, despite the great usage potential in the country, has an obvious lack of development
institutions. Investments are being made in the country to develop electricity generation using
solar and geothermal energy.
Solar PV 1
CSP
Biomass
SHP 2
Geothermal
Oceans
Wind
1
Notes: The Korean manufacturer of solar PV panels Daekyeonsolar plans to install a plant in the country
2
to provide the technology required by the plant that shall be installed in Copiapó; Two international
manufacturer of turbines installed in the country were found, but no information was found on the
availability of turbine factories for PCHs installed in Chile.
3.3.5 COLOMBIA
The framework for generation of energy from renewable sources in Colombia is
interesting because of the country's sector characteristics, a result of government policy for the
sector, of the opportunities for expansion of electricity generation in the country, and of the
focus given by national research institutions.
Table 68: Analysis of main institutions fomenting alternative renewable sources in Colombia.
Solar PV
CSP
Biomass
SHP
Geothermal
Oceans
Wind
ESMAP (2007) indicates the primacy of hydroelectricity in the Colombian energy matrix.
Therefore, competition with this form of generation requires considering the benefits of
hydroelectric generation, and the UPME (2009a) reports that the electric system expansion in
Colombia will be mainly based on hydropower until 2024. Thus, the governmental focus on non-
interconnected zones to use renewable non-conventional energy sources, as indicated in the
legislation analysis contained in this report is consistent with its plan to expand the
interconnected system, and this is reflected in the performance evaluation of governmental
actors in the development of generation from non-conventional sources. Thus, the development
Due to the low development level of renewable generation in Colombia, the state of the
domestic industry is not surprising, except for the PV industry, the most advanced, but still only
with low power equipment. Typically, manufacturers produce smaller equipment such as small
wind turbines, gaseificators, and PV panels. International manufacturers' representatives and
service firms follow the same trend, although there is a good diversity in the PV panels' market.
The research areas of the Colombian academic institutions are more diversified, with
operations also in less conventional areas such as ocean energy. Nevertheless, low power
systems have a significant importance, but are not overwhelming, and wind energy, which
normally attracts interest in research, is one of the least studied.
Consulting and engineering firms working in the country are not numerous, with major
participation of public companies as ISAGEN, EPM and EMCALI. The energetic use of biomass
also receives particular attention in Colombia because of the possibilities of obtaining resources
through the CDM, particularly for urban waste and sugar cane usage.
Another source with a large participation in the CDM is small hydro, with a significant
number of registered projects, making hydro and biomass sources the ones with better funding
opportunities. There are fewer projects for the development of wind energy studies, for
example, and even fewer funding for technologies such as oceans or concentrated solar
energy. Fund raising for enterprises is impaired by the short funding horizon available in the
country, according to ESMAP (2007).
Thus, the development of renewable energy sources is slow, especially for large
generation projects (except hydro), while the generation for non-interconnected systems has a
more favorable picture, despite that research potential exists for all technologies. In Colombia,
sources with the largest development are those that could properly use the CDM, or who show
a great potential and greater tradition, as in the case of small hydro.
3.3.6 MEXICO
Among all existing institutions in Mexico to use renewable energy, the government
institution is the most powerful and well organized than the others, either civilian or research
and development institutions.
• Government
o Secretariat of Energy
• Environmental organizations
o Greenpeace-Mexico
o Civic Alliance
o Green Impulse
o Germany
o UK
o Italy
o IDB
o World Bank
• Manufacturers
3.3.7 PERU
The Peruvian government recently instituted a generation program through renewable
energy sources by Legislative Decree No. 1002/2008 and Supreme Decree No. 50/2008, with
execution of the selection process in February 2010. Thus, players who had their projects
selected will exert a considerable influence on the development of the energy sources
(biomass, wind, solar, and hydro).
Table 69: Analysis of main institutions fomenting alternative renewable sources in Peru.
Solar PV
CSP
Biomass
SHP
Geothermal
Oceans
Wind
As for research and technological development in Peru, the country has an adequate
number of development agencies, but only lately these have adopted research on renewable
energy as a priority (e.g. CONCYTEC). Given the low index of access to electricity in the
country, it is not strange the fact that most research institutions focus on the study of
alternatives for the electrification of rural and/or isolated communities, studying, therefore, small
size technologies, such as small-scale hydroelectric, PV and wind generation. However, the
focus on wind and solar power is also evident due to the significant number of consultancies
and engineering firms that deal exclusively with projects related these two forms of energy. The
state-owned company ADINELSA is an important knowledge reservoir on the operation of these
systems in isolated communities.
It is important to note that although there are existing studies of potentials conducted by
government institutions, each form of energy is analyzed by one institution. For example, while
the General Direction of Rural Electrification conducted the study of wind and solar potentials,
another direction of the Ministry of Energy and Mines evaluated the hydraulic potential and
INGEMMET was responsible for assessing the geothermal potential. Thus, it might be
interesting to group the responsibility for the development of alternative sources in a central
coordinating institution, since another related activity, the coordination of generation capacity
from renewable sources contracting program is a responsibility of the OSINERGMIN.
There are few national manufacturers of equipment or service providers in the country,
with only the production of small wind turbines, bio-digesters to produce bio gas and hydraulic
mini turbines, plus the possibility of acquiring domestic boilers, and therefore the national
manufacturing is also focused on small exploitations. On the other hand, representatives of
foreign manufacturers are more numerous in the country, with the possibility of obtaining of
wind, solar PV, and geothermal equipment as well as related consulting services. Effectively,
there are several engineering firms or consultants established in the country, because of the
development of wind projects, solar PV, biomass and hydroelectric already mentioned and
resulting from the government program, and there are also firms that develop projects for the
exploitation of the geothermal potential such as Magma Energy Corp.
Nevertheless, there are institutions that could easily make an integrative work between
the different actors in the industry on a larger scale, i.e. the Sustainable Alternatives Network,
particularly when considering the large number of potential financiers for projects in the country:
in the foreground the multilateral international financial institutions like the World Bank, the
Interamerican Development Bank and national banks such as the Japan Bank for International
Cooperation, which have already financed several projects in the country. In fact, while small
projects and research are funded through national institutions, more ambitious projects for a
3.3.8 VENEZUELA
Venezuela is currently facing a severe energy crisis. With an energy matrix based on
hydropower and fossil fuels, the country has little experience in implementing projects of
renewable alternatives.
The main government actions to promote renewable energy alternatives focus on wind
power and solar generation (for rural electrification). However, the promotion of renewable
energy in the country seems far from tangible with the current stakeholders' shortage in the
country (see Table 70).
Table 70: Analysis of main institutions fomenting alternative renewable sources in Venezuela.
Solar PV
CSP
Biomass
SHP
Geothermal
Oceans
Wind 1
1
Note: The Venezuelan oil company PDVSA conducts studies for installation of two factories in the
country.
Table 71: Additional installed capacity per source and country (MW)
Central
Argentine Peru Colombia Venezuela Mexico
Brazil (2020)1 Chile (2020)3 America
(2020)2 (2020)4 (2020)5 (2013)6 (2020)7
(2015)8
Wind energy 6000 - 7800 200 – 8000 1000 – 6122 0 - 403 9 – 100 172 1724 115
SHP( <20 MW) 6966 1004 616 - 676 0 – 509 512 – 601 0 465 0
Biomass 8521 300 - 1000 380 – 1742 101 180 0 100 110
Plant Kg/kW
Wind 2.5
Hydraulic 2.0
Biomass 1.2
Geothermal 4.0
PV 8.8
Oceans 1.5
CSP 4.0
Central
Argentina Colombia Venezuela Mexico Total
Brazil (2019) Chile (2020) Peru (2020) America
(2020) (2020) (2013) (2020) (min-max)
(2015)
Wind energy 15000-19500 500-20000 2500-15310 0-1010 20-250 430 4310 290 23050-61100
Oceans 0 0 0 0 0 0 0 0 0
Total 39940 – 44440 4070 – 29610 4230-24620 1320-4450 1480-1890 430 5860 520 57850-111820
Multicriteria analysis is a tool that can be very useful in decision making processes,
whether in public or private, in situations where decisions must be based on objective, technical,
transparent criteria and also to incorporate subjective and political nature judgments of public or
private managers involved.
Multicriteria analysis techniques are being widely used to assist the decision making
process on energy and environmental problems involving multiple and often conflicting
objectives (Pohekar & Ramachandran, 2004). Also, frequently problems include the need for
evaluations with strong qualitative or subjective components that must be incorporated into the
decision process.
Unlike optimization techniques, that seek the optimal solution for a specific objective,
the multicriteria analysis seeks a compromise solution, negotiated in the face of multiple
objectives that must be met. It seeks, therefore, not strictly optimal solution, but the consensus
solution (JANNUZZI et al., 2009).
This section is divided into two parts: presentation of the method and its application
based on the work results.
The method
For the present work, it was chosen one of the most popular solutions "ranking" (or
47
prioritization) technique known as PROMÉTHÉE implemented through a public domain
application - PRADIN 3.0 - Program to Support Decision Making Based on Indicators (National
Association of Financial, Planning, Research and Statistic Institutions - ANDIPES, 2007). The
major aspect for the method adoption is the fact that it considers subjectivity, based on the set
of values/interests of each decision maker, and has the ordering of alternatives as its purpose.
The Prométhée II method, used by the PRADIN 3.0 application consists in achieving an
alternatives ranking evaluated by a preference system. This method also consists in confronting
the alternatives' performance criterion by criterion (where the criteria refer to the decision
factors, see section 0), from binary comparisons and uses the pseudo criterion concept
associating them to indifference limits (q) and limits of relative preference (p). From
comparisons of alternatives' performance criterion by criterion, according to a given preference
47
The PROMÉTHÉE method designates one family of methods of the French school of Multicriteria
Decision Aid (AMD). It was developed to address discrete multicriteria problems, i.e. when the set of
possible alternatives is finite.
The method uses a preference function Pj(a,b) which is a function of the dj difference
between two alternatives for criterion j, i.e. dj = f(a,j) - f(b,j), where f(a,j) and f (b,j) are values of
two alternatives, a and b, for criterion j.
The limits of the accepted values for preferring one alternative to another, or show
indifference q' or p' are defined depending on the criterion function. Two alternatives are
indifferent by criterion j if dj does not exceed the limit of indifference q'. If dj is greater than p',
then we say that there is a strict preference for the alternative a. A multicriteria preference
index is built for the alternatives a and b:
∅+ (𝑎) = � 𝜋(𝑎, 𝑏)
𝐴
∅− (𝑎) = � 𝜋(𝑏, 𝑎)
𝐴
+ (𝑎)
∅(𝑎) = ∅ − ∅− (𝑎)
Where wj is the weight given to criterion j, ∅+ (a) and ∅− (a) are positive and negative
overshoot flows of alternative a. The positive overshoot flow expressed how alternative a
overcomes the others. And the negative expressed how alternative a is surpassed by the
others. Alternative a is preferred to alternative b if ∅(𝑎) > ∅(𝑏). If ∅(𝑎) = ∅(𝑏), they are
indifferent.<0}
Phases 48
Decision-making methods based on multiple criteria involve a series of phases in which
clear and objective definition of the problem-situation to be solved is crucial. This phase is
essentially qualitative, for which different techniques to involve participants, as group
discussion, Delphi panel, literature search of previous studies, can provide inputs to reach the
basic definitions on the addressed problem, various alternative solutions, different judging
criteria, other decision-makers that should participate in the process, etc.
49
Thus, the implementation of AMD in any of the typical problems faced by the public or
50
private manager requires:
48
This section was largely based on Jannuzzi et al. (2009).
49
How to choose one among several projects of urban intervention, select one of several proposed
services in a public bidding process, evaluate concessionaires of public services with respect to operating
performance, identify pockets of social vulnerability in the territory to receive public investment or
social programs.
50
The choice(s) of best investment(s) between several alternatives, select the best development strategy
for the product or service, identify bottlenecks in production or service to receive investments and
actions, identify priority geographic areas for investment in expansion or strengthening of
infrastructure.
• Identify valid alternatives to solve or address the problem - the submitted projects, the
different programs under consideration, the different locations and/or infrastructure that
may be the object of acting;
• List the different decision makers and their respective degrees of influence (or power/
political clout) who may have interest or relevance in the technical-political choice
process - shareholders, managers from different departments or directories, technicians
of the involved sector, consumers or their institutional representatives on dealers
assessment, technicians, specialists and agents with experience in implementing
projects and programs;
• Define, with each decision maker, the criteria or indicators for evaluating alternatives, as
well as the relative importance of each one (weight) - cost, economic, social and
environmental impact, operational complexity, value, technical capability of service
renders, quality potential of services, level of indebtedness, duration of benefits, quality
and regularity of services rendered to consumers;
• Assign the reached value or search the referred to index for each evaluation criterion of
each identified alternative.
With the problem clearly defined, and raised the alternatives for its solution, the set of
decision makers identified and specified the criteria for alternatives' evaluation, one shall pass
to the application of the quantitative procedure of multicriteria analysis.
Define objectives
Indentify actors
Select indicators-criteria
In following, each of the phases shown in Figure 25 is performed with focus on this work
goals. We stress the importance of complying with each phase because the best defined is the
scope, boundaries and input data of the given problem, the more effective will be the tool aid in
decision making.
The objective is, therefore, to choose within a set of potential markets, those in which
the potential use of copper is both larger and more effective under Procobre's point of view.
The actors involved are the ICA decision makers. Other actors, as its associates may
also be included.
Problem Define the next five-year investment plan in Latin America for power generation from renewable energy
specification sources. The use of copper is the main leveler.
Objectives To choose within a set of potential markets, those in which the potential use of copper is both larger and
more effective.
Considered alternatives
Table 75 presents the technologies listed by ICA and the countries in focus. They are
the decision object-units. They are seven technologies and seven countries and an aggregate
region (Central America and The Caribbean). So there are 56 alternatives (country-technology
pairs) to be evaluated, each represented by a pair of acronyms. For example, BR_eo
represents the wind energy in Brazil, CO_g geothermal energy in Colombia and so on.
There are three axes of evaluation or criteria used here: market, regulation and actors.
The market criterion represents the estimated amount of copper based on the projected
additional installed capacity of the study horizon in tonnes, i.e., a quantitative criterion. The
other two criteria are qualitative and represent, respectively, the degree of development and the
importance of the legal framework and existing players.
To the decision maker, in general, and because of his preferences, some criteria will be
more important than others. The measure of relative importance (higher or lower) of the criteria
for the decision maker is called weight or weighting. For example, the product cost criterion for a
company may be more important than the investment criterion in research and development in
a time of crisis, i.e., the product cost will have a greater weight than the investment in research
when considering the various alternatives with respect to these criteria.
For qualitative criteria, one searches the reaction of the respondent in accordance to a
scale whose function is to translate qualitative information into a value, for example, the scale
presented in Table 76. The numerical correspondence is the one used for multicriteria analysis.
1 2 3 4 5
Very Little A lot Quite Extremely
Table 77 presents the criteria used, the respective scales, and weights taken. It is worth
noting that these criteria and their definitions are not exhaustive. The decision maker(s) should
propose their own criteria and their own definitions according to their own perspective.
For this exercise, it was considered that the values of preference and indifference are
zero, i.e., it is what is called a preference function of a true or usual criterion.
Table 78 shows the minimum and maximum amount of copper according to the
projection of the estimated additional capacity for each source (see section 3.4). The analysis
will be made for the upper and lower limits of these quantities of copper.
Central
Argentina Colombia Venezuela Mexico Total
Brazil (2019)1 Chile (2020) Peru (2020) America
(2020) (2020) (2013) (2020) (min-max)
(2015)
Wind energy 15000-19500 500-20000 2500-15310 0-1010 20-250 430 4310 290 23050-61100
Ocean energy 0 0 0 0 0 0 0 0 0
Total 39940 – 44440 4070 – 29610 4230-24620 1320-4450 1480-1890 430 5860 520 57850-111820
For each of these aspects, a weight is assigned. The weights of Table 80 were given by
Procobre representatives in a workshop. The final score for each country-technology pair is
given by the sum of columns plus the General Legislation score. There are general nature laws,
not specific to the particular source. A country can have a general law independent of the
renewable energy source and no specific one for a given source.
For example, in the case of Brazil for wind energy. Each value of Table 79 is multiplied
by its weight. Therefore, for the law whose value is assigned four, multiplying by the
corresponding weight (3), results the value 12 (3 x 4). The same procedure applies to the
General category. The end result is the sum of the general value with the sum of valuations of
the source itself: 16 (General: 6 +6 +2 +2) plus 24 (12 +12 +0 +0), totaling 40.
Economic Market
Regulatory Mechanisms
incentives Creation
Legislation Regulation
Argentina General 2 3 3 1
Wind 2 2 2
SHP
Biomass
Geothermal
Solar PV 2 2 2
Oceans
CSP 2 2 2
General 2 2 2 2
Wind 4 4
SHP 4 4
Brazil
Biomass 4 4
Geothermal
Solar PV
Oceans
CSP
General 4 4 3 2
Wind
SHP
Chile
Biomass
Geothermal
Solar PV
Oceans
CSP
General 3 3 2 2
Wind 1
SHP
Biomass 2 2
Peru
Geothermal 4 4
Solar PV
Oceans
CSP
General 1 1 1
Wind
Colombia
SHP
Biomass 2 2
Geothermal
Solar PV 2 2
Oceans
CSP
General 1
Wind
Venezuela
SHP
Biomass
Geothermal
Solar PV
Oceans
CSP
General 1 3 2
Wind 3
SHP
Mexico
Biomass
Geothermal
Solar PV 3
Oceans
CSP
General 2 3
Central America
Wind
SHP 1
Biomass
Geothermal
Solar PV 2
Oceans
CSP
SHP 19 0 0 0 0
Biomass 19 0 0 0 0
Geothermal 19 0 0 0 0
Solar PV 33 6 6 2 0
Oceans 19 0 0 0 0
CSP 33 6 6 2 0
General 16 6 6 2 2
Wind 40 12 12 0 0
SHP 40 12 12 0 0
Brazil
Biomass 40 12 12 0 0
Geothermal 0 0 0 0 0
Solar PV 16 0 0 0 0
Oceans 0 0 0 0 0
CSP 16 0 0 0 0
General 29 12 12 3 2
Wind 29 0 0 0 0
SHP 29 0 0 0 0
Chile
Biomass 29 0 0 0 0
Geothermal 29 0 0 0 0
Solar PV 29 0 0 0 0
Oceans 29 0 0 0 0
CSP 29 0 0 0 0
General 22 9 9 2 2
Wind 25 0 3 0 0
SHP 22 0 0 0 0
Biomass 34 6 6 0 0
Peru
Geothermal 46 12 12 0 0
Solar PV 22 0 0 0 0
Oceans 22 0 0 0 0
CSP 22 0 0 0 0
General 7 3 3 1 0
Wind 7 0 0 0 0
Colombia
SHP 7 0 0 0 0
Biomass 19 6 6 0 0
Geothermal 7 0 0 0 0
Solar PV 19 6 6 0 0
Oceans 7 0 0 0 0
CSP 7 0 0 0 0
General 3 0 3 0 0
Wind 3 0 0 0 0
Venezuela
SHP 3 0 0 0 0
Biomass 3 0 0 0 0
Geothermal 3 0 0 0 0
Solar PV 3 0 0 0 0
Oceans 3 0 0 0 0
CSP 3 0 0 0 0
General 14 3 9 2 0
Wind 23 0 9 0 0
SHP 14 0 0 0 0
Mexico
Biomass 14 0 0 0 0
Geothermal 14 0 0 0 0
Solar PV 23 0 9 0 0
Oceans 14 0 0 0 0
CSP 14 0 0 0 0
General 9 6 0 3 0
Central America
Wind 9 0 0 0 0
SHP 12 3 0 0 0
Biomass 9 0 0 0 0
Geothermal 9 0 0 0 0
Solar PV 11 0 0 0 2
Oceans 9 0 0 0 0
CSP 9 0 0 0 0
Due to the large number of different types of actors, each of them was established a
valuation based on Table 77, which results are shown in Table 82. For each actor a weight was
assigned chosen by ICA in a workshop (Table 83). The sum of the scales assigned to the actors
for each country is the value used by multiple criteria. Table 82 presents the weights assigned
and the consolidation of these values.
Biomass 5 3 5 3 5 3 3 5 5
SHP 5 5 3 5 5 3 5 5 5
Geothermal 3 0 1 3 5 3 1 3 3
Ocean 0 0 1 5 3 0 0 1
Wind 5 5 5 5 5 3 5 5 5
Solar PV 1 1 5 5 5 5 5 1 1
CSP 1 1 5 5 5 5 1 1
Biomass 5 5 5 5 5 5 5 5 1
Brazil
SHP 5 5 1 5 5 5 5 5 1
Geothermal 0 0 1 0 5 5 0 0 1
Ocean 0 1 5 5 5 1
Wind 5 5 5 5 5 5 5 5 3
Solar PV 3 1 5 1 5 5 1 1 3
CSP 3 0 5 1 5 5 1 1 1
Biomass 3 1 3 1 5 5 1 1 1
Chile
SHP 3 0 5 3 5 5 3 1 1
Geothermal 3 0 3 1 5 5 1 1 1
Ocean 3 0 3 1 5 5 1 1 1
Wind 3 0 3 3 5 5 1 1 1
Solar PV 5 0 5 3 5 5 3 3 5
CSP 0 0 1 0 5 0 0 1
Biomass 1 1 1 3 5 3 1 1 3
Peru
SHP 5 1 1 3 5 5 3 3 5
Geothermal 5 1 1 5 0 1 5 5
Ocean 0 1 5 0 0 0 1
Wind 3 1 3 3 5 5 3 5 5
Solar PV 1 1 1 5 3 1 3 1 1
CSP 0 0 1 3 1 3 1
Colombia
Biomass 1 1 3 1 3 3 5 3 5
SHP 5 1 1 1 3 1 3 5 5
Geothermal 3 0 1 0 3 1 3 1 3
Ocean 0 1 3 1 1 0 1
Wind 1 0 1 1 3 1 1 1 1
Solar PV 3 0 0 1 0 0 1 1 1
CSP 1 0 0 1 0 0 1 1 1
Venezuela
Biomass 1 0 0 1 0 0 1 1 1
SHP 1 0 0 1 0 0 1 1 1
Geothermal 1 0 0 1 0 0 1 1 1
Ocean 1 0 0 1 0 0 1 1 1
Wind 3 1 1 1 0 0 1 1 1
Solar PV 3 1 3 3 1 3 3 1 1
CSP 1 0 1 0 3 0 3 1 1
Biomass 3 1 1 1 3 3 3 1 3
Mexico
SHP 3 1 0 1 1 0 1 1 3
Geothermal 5 0 0 1 1 0 3 1 1
Ocean 1 0 0 0 1 0 1 0 0
Wind 5 3 3 5 3 0 3 3 3
Solar PV 3 0 1 3 3 3 1 1 3
Central America
CSP 1 0 1 0 0 0 0 0 0
Biomass 3 0 3 1 3 3 1 1 3
SHP 3 0 1 1 1 0 0 0 3
Geothermal 5 0 0 0 1 3 0 0 1
Ocean 1 0 0 0 0 0 0 0 0
Wind 5 0 3 0 3 3 0 0 3
Weight 3 3 3 2 1 2 2 2 1
Biomass 77 15 9 15 6 5 6 6 10 5
SHP 85 15 15 9 10 5 6 10 10 5
Geothermal 40 9 0 3 6 5 6 2 6 3
Ocean 15 0 0 3 0 5 6 0 0 1
Wind 91 15 15 15 10 5 6 10 10 5
Solar PV 59 3 3 15 10 5 10 10 2 1
CSP 49 3 3 15 10 5 10 2 0 1
Biomass 91 15 15 15 10 5 10 10 10 1
Brazil
SHP 79 15 15 3 10 5 10 10 10 1
Geothermal 19 0 0 3 0 5 10 0 0 1
Ocean 29 0 0 3 0 5 10 10 0 1
Wind 93 15 15 15 10 5 10 10 10 3
Solar PV 51 9 3 15 2 5 10 2 2 3
CSP 46 9 0 15 2 5 10 2 2 1
Biomass 43 9 3 9 2 5 10 2 2 1
Chile
SHP 54 9 0 15 6 5 10 6 2 1
Geothermal 40 9 0 9 2 5 10 2 2 1
Ocean 40 9 0 9 2 5 10 2 2 1
Wind 44 9 0 9 6 5 10 2 2 1
Solar PV 68 15 0 15 6 5 10 6 6 5
CSP 9 0 0 3 0 5 0 0 0 1
Biomass 33 3 3 3 6 5 6 2 2 3
Peru
SHP 59 15 3 3 6 5 10 6 6 5
Geothermal 42 15 0 3 2 5 0 2 10 5
Ocean 9 0 0 3 0 5 0 0 0 1
Wind 63 9 3 9 6 5 10 6 10 5
Solar PV 33 3 3 3 10 3 2 6 2 1
CSP 15 0 0 3 0 3 2 6 0 1
Colombia
Biomass 47 3 3 9 2 3 6 10 6 5
SHP 49 15 3 3 2 3 2 6 10 5
Geothermal 28 9 0 3 0 3 2 6 2 3
Ocean 11 0 0 3 0 3 2 2 0 1
Wind 18 3 0 3 2 3 2 2 2 1
Solar PV 16 9 0 0 2 0 0 2 2 1
CSP 10 3 0 0 2 0 0 2 2 1
Venezuela
Biomass 10 3 0 0 2 0 0 2 2 1
SHP 10 3 0 0 2 0 0 2 2 1
Geothermal 10 3 0 0 2 0 0 2 2 1
Ocean 10 3 0 0 2 0 0 2 2 1
Wind 22 9 3 3 2 0 0 2 2 1
Solar PV 43 9 3 9 6 1 6 6 2 1
CSP 18 3 0 3 0 3 0 6 2 1
Biomass 37 9 3 3 2 3 6 6 2 3
Mexico
SHP 22 9 3 0 2 1 0 2 2 3
Geothermal 27 15 0 0 2 1 0 6 2 1
Ocean 6 3 0 0 0 1 0 2 0 0
Wind 61 15 9 9 10 3 0 6 6 3
Solar PV 34 9 0 3 6 3 6 2 2 3
Central America
CSP 6 3 0 3 0 0 0 0 0 0
Biomass 36 9 0 9 2 3 6 2 2 3
SHP 18 9 0 3 2 1 0 0 0 3
Geothermal 23 15 0 0 0 1 6 0 0 1
Ocean 3 3 0 0 0 0 0 0 0 0
Wind 36 15 0 9 0 3 6 0 0 3
Table 84 presents the criteria corresponding values for each country-technology pair
considered in this exercise: for the lower and upper limits of the estimated amount of copper.
Quantitative indicators presented are derived from the available literature. The closer the data is
to reality, the better the results of multicriteria analysis.
Based on Table 84 valuations, four scenarios were simulated by varying the weights for
each criterion:
The following figures show the ranking resulting from valuations of Table 84 for each
one of the four scenarios.
For whichever scenario, either for the upper and lower estimated amount of copper for
the next 10 years, Brazil stood out compared to others in wind, biomass and SHP modes. The
exception is Argentina in relation to the exploitation of wind power, which also showed a
significant position in the ranking, especially when one considers the upper limit of the projected
amount of copper, which is second only to Brazil-wind in 3 of the 4 scenarios.
The preferable country-technology pairs from the ICA standpoint were, considering the
lower level of projected amount of copper:
1. Brazil_wind
2. Brazil_biomass
3. Brazil_PCH
4. Argentina_wind
5. Mexico_wind
6. Chile_PCH
From the list above, the three first pairs stand out in comparison to others. The latter
three also showed a certain prominence, but were followed relatively closely by the next ones.
Now, when one considers the amount for higher levels of copper, technologies such as
solar PV in Argentina and wind energy in Chile excel. The preferable country-technology pairs
from the Procobre standpoint were:
1. Brazil_wind
2. Argentina_wind
3. Brazil_biomass
5. Chile_wind
Decision object-unit
Figure 26: Ranking of evaluated countries-technologies - scenario 1: lower limit amount of additional copper
Decision object-unit
Figure 27: Ranking of evaluated countries-technologies - scenario 2: lower limit amount of additional copper
Decision object-unit
Figure 28: Ranking of evaluated countries-technologies - scenario 3: lower limit amount of additional copper
Decision object-unit
Figure 29: Ranking of evaluated countries-technologies - scenario 4: lower limit amount of additional copper
Decision object-unit
Figure 30: Ranking of evaluated countries-technologies - scenario 1: upper limit amount of additional copper
Decision object-unit
Figure 31: Ranking of evaluated countries-technologies - scenario 2: upper limit amount of additional copper
Decision object-unit
Figure 32: Ranking of evaluated countries-technologies - scenario 3: upper limit amount of additional copper
Decision object-unit
Figure 33: Ranking of evaluated countries-technologies - scenario 4: upper limit amount of additional copper
5.1.5 REFERENCES
Gomes, L.F.A.M.; Araya, M.C.G.; Carignano, C. Tomada de Decisões em Cenários
Complexos. São Paulo: Pioneira Thomson Learning, 2004.
Jannuzzi, P.M.; Miranda, W.L. de; Silva, D.S.G da. Análise Multicritério e Tomada de
Decisão em Políticas Públicas: Aspectos Metodológicos, Aplicativo Operacional e Aplicações.
Informática Pública, ano 11 (1), p. 69 – 87, 2009.