Argentine Power Sector

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Argentine Power Sector
Wholesale Electric Market Management Company
Update APEX 2000 Conference
CAMMESA
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Outline

• Basic rules, global figures
• Changes in the demand
• Changes in the supply
• Impact of these changes in the market and the
  operation
• Rules more significant changes
• Future changes
• Conclusion - Trends

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Wholesale Electric Market - 1999
Installed Capacity 20.372 MW Generation 71.818
GWh 500 kV 7.920 km 330 kV 1.111 km 220 kV
1.232 km 132 kV 6.484 km
NOA
NEA
CUYO
LITORAL
CENTRO
GBA
WEM Installed Capacity 19.513 MW Demand 68.757
GWh Peak Generation 12.730 MW WEM PS Installed
Capacity 842 MW Demand 3.209 GWh Peak
Generation 534 MW
BUENOS AIRES
COMAHUE
PATAGONICO
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Outstanding Variables
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Outstanding Variables
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Basic Market Operating Rules
Transmission
DEMAND
Contracts Market
DISTRIBUTORS
LARGE USERS
WEM
SPOT Market
INTERNATIONAL INTERCONNECTIONS (exports)
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Basic Market Operating Rules

• SPOT MARKET
• SHORT-TERM MARGINAL-COST BASED
• SEASONAL DECLARATION OF GENERATORS COSTS
• STABILIZED SEASONAL PRICES FOR DISTRIBUTORS
• HOURLY PRICES IN SPOT MARKET
• ADDITIONAL PAYMENT FOR CAPACITY (10 /Mwh 90
  hours per week)
• OPEN ACCESS TO THE TRANSMISSION GRID
• HOURLY NODAL PRICES AND LOCAL PRICES DUE TO
  TRANSMISSION CONSTRAINTS FOR EACH NODE OF THE EHV
  GRID
• REMUNERATION FOR ANCILLIARY SERVICES
  

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Changes - Demand and supply

• Changes in the demand gt incorporation of a new
  1000 MW (about 15 of local demand)
  interconnection with Brazil, mainly to export
  when Brazil is short of hydroelectric
  availability. Projects for another 100 MW in 2001
  and 2003.
• Changes in the supply gt incorporation of high
  technology generation equipment, basically large
  combined cycle plants (800 MW), replacing less
  efficient steam turbine plants.

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Changes - Demand and supply

• Impact of these changes in the market and the
  operation gt
• Highly variable demand of Brazil increases energy
  prices volatility, augmented in winter due to the
  rise of oil prices. The interconnection enables
  to share short term and instantaneous reserves
  (Brazils system is five times Argentinas one in
  size)
• New generation plants are very efficient (gain of
  about 30). On the other hand, they are very
  large in relation with the demand (about 10),
  which requires the adaptation of reserves
  according to their reliability. The risk of
  Underfrequency Load Shedding (UFLS) due to
  Combined Cycle (CC) trips may affect quality
  standards.

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Rules more significant changes

• A new market has been created to remunerate
  certain demands offering the anticipation of
  underfrequency load shedding (exports to Brazil,
  electro-intensive industries) to reduce the
  action of the UFLS scheme of the rest of the
  demands. This system mainly profits out from the
  availability of the interconnection with Brazil
  to reduce the risk of local UFLS occurrence,
  particularly due to CC trips.

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Instantaneous Reserve
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Future Changes - Rules

• More flexible price declarations (from the
  present six months in advance to one week in
  advance), allowing to declare different blocks
  for the same unit and in different hours
• Capacity payments not depending on the actual
  dispatch (like now), but on an average weekly
  dispatch. Charges in case declared weekly
  availability is not reached.
• Thermal reserve payments for the dry hydrological
  year assigned on a competitive basis and similar
  charges criteria.

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Conclusion - Trends - Challenges

• For the year 2002, another 1000 MW exports to
  Brazil will deepen the impact, increasing
  volatility and enabling to share reserves in
  critical times.
• Since its beginning, the WEM in Argentina has
  been characterised by a very strong and
  competitive market in the generation sector,
  which has led to excellent results allowing not
  only to cover the local demand but also to export
  a significant amount of energy (up to 3000 MW in
  the next years). Average prices rounded from 2
  to 3 cents/kWh. Strong signals through nodal
  prices at each node of the EHV grid are given. No
  significant stress due to sustained high prices
  occurred and demand has been satisfied virtually
  without problems. Last years liberation for 30
  kW consumers, anyway, didnt have a major impact.

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Conclusion - Trends - Challenges

• Proposed rule changes are oriented to increase
  competition in the WEM, gradually tending to a
  commodity market. The changes in the
  interconnected system will lead to adjustments in
  rule modifications to adapt them to the future.
  CAMMESA, as administrator of the market, must be
  flexible enough to adapt efficiently to rapid
  changes.

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Quality, Technology Transparency
For an Electrical Market without frontiers
Thanks for your attention!Canada - November
2000