Market Integration The Southern Cone of South America Experiences

1
Market IntegrationThe Southern Cone of South
AmericaExperiences

• Juan Luchilo CAMMESA
• APEx 2003 Conference
• Cartagena, Colombia

2
Regional Market - Basic Data
Mercosur Market, 5 countries (Argentina, Brazil,
Chile, Paraguay, Uruguay) Population? about 240
M Installed Capacity ? 120 TW Annual Energy
Consumption ? 450 TWh
3
Regional Market - Basic Data

• Different resources in each country (Brazil,
  Uruguay, Paraguay mostly hydro Argentina, Chile,
  hydrothermal) and level of deregulation
• Long distances between main loads and from
  resources to load
• Barriers between countries
• natural (mountains, rivers)
• political gt openness to integrate markets
• technical and economical viabilitygt distances,
  electrical issues
• Opportunities gt complementarity of demand and
  hydro availability, gas and electricity
  integration

4
Energy Conssumption
5
Deregulation of the Electric Sector
BRAZIL 1998
PARAGUAY ?
URUGUAY 200?
CHILE 1982
ARGENTINA 1992
6
Links - Evolution

• Before 1997 gt Integration related with
  binational hydro power plants agreement between
  countries
• Argentina Uruguay - Salto Grande (1890 MW)
• Brazil Paraguay Itaipú (12600 MW)
• Argentina Paraguay - Yacyreta (1800 MW)

7
Links - Evolution

• After 1997gt Integration related with market
  opportunitiesgt
• competitive market, gas availability and new
  capacity in Argentina
• generation needs at northern Chile
• complementarity with Brazil and Uruguay (firm
  capacity for dry hydro years)
• Argentina Chile gt new 345 kV link from Salta
  to Northern Chile thermal generation built
  specifically for that purpose isolated
• Argentina - Brazil (2000 MW) 2 back to back DC
  converters (50/60 HZ) built firm capacity
  contracts
• Argentina Uruguay firm capacity contracts
  (400 MW) using existing link

8
Electricity or/and Gas?

• As well as electricity, gas has also become a
  product exchange in the south cone
• Brazil imports from Argentina and Bolivia, and
  transform part locally in electricity
• Chile imports from Argentina, to fuel its new
  generation plants
• Uruguay is on the same way soon
• Theres a competition wether to transport gas and
  transform it afterwards in electricity or to
  produce electricity and then transport it through
  wires economic viability is related with volume
  requirement and scale

9
Energy Links Gas Electricity
Electroducto Argentina Chile
GasoductoAtacama y Norandino
Gasoducto Gasandes 7-8
Gasoducto del Pacífico 1.5-9
10
Impacts (Argentina Brazil link)

• Resources Optimizatión
• Share reserves (seasonal, hourly)
• Increase reliability, quality

Some Benefits
It requires adequate technical coordination
between the interconnected systems
11
Results -Argentina Brazil link
12
Impacts

• Increase volatility in Argentine spot price (2000
  MW firm capacity delivered if Brazil needs it
  Argentina is a 10000 MW system)

13
Concerns

• Macroeconomic issues (like devaluation) affect
  parties gt requires dynamic adaptation to mantain
  in the short term operativity, and long term
  commercial viability
• Lack of regulatory compatibility
• Technical and economical complexity to
  interconnect countries

14
Quality, Technology Transparency
For an Electrical Market without frontiers
Thanks for your attention!Colombia, October
2003
Doubts gt jluchilo_at_cammesa.com.ar More info gt
www.cammesa.com.ar