Water Management Practices

1
Water Management Practices

• 1. Hydropower, Drought and Society
• 2. Management in a Nutshell
• 3. Opportunities for Climate Forecast Use
• 4. Complicating Factors

2
The Costs of Drought in Ecuador

• 1995 gt 7 Million losses
• 1996 gt 63 Million losses
• Daily losses as much as 4M/day
• Small Businesses close doors
• Large Industry can generate power
• Small Industry hard hit (accounts for 54 of
  labor)

3
Drought (continued)...

• Measures to fight shortages
• Rationing street lighting
• Cut out TV programs 9 hours/day
• Business signs to be used only at night
• Close entertainment places after 11 pm
• Reduce deliveries by 20
• Users buy independent generation equipment

4
If the power runs out...

• Disruptions are expensive to society
• Thermo more expensive than hydro
• Building large projects to generate more power
  very costly. (500 M)
• Drought causes inflation because costs
  transferred to consumer through price
• Basically es muy importante!

5
Power Management

• Objective Provide consistent, dependable power
  at a low price.
• Utilize water as much (and as effectively) as
  possible. If water runs out, you need to use
  thermal power (more expensive, and limited
  supply Paute provides gt50 of Nations power).

6
Power Generation DecisionModel Time Scales

• Daily (1 hour-2 weeks) based on demands and
  seasonal plan
• Seasonal (1 month-1 year) planning total releases
  to avert drought using hydrologic forecasts
• Long-Term (gt1 year) Infrastructure Development
  and Planning (Supply Demand projections)

7
Role of Climate Information

• Forecasting drought using climate info

Rainfall Forecast
Hydrologic Model
Streamflow
Power Demands
Reservoir Levels
Hydro Power
Thermal Power
8
Complicating Factors

• Finding points of entry Meshing climate
  forecasts with existing guidance (hydrologic
  forecasts)
• Operations influenced by price of water/power
• Climate is not the only issue

9
Daily to weekly operations
Weather fcst
Seasonal management plan
Power Demand Fcst
Hydro to be generated and what plant
thermo to be generated and what plant
10
Climate is Not the Only Issue

• Planning issues 1975 plan not followed, turbines
  added at drought-prone Paute instead of upstream
  project (no funds)
• Daule Peripa (230 Mw) will start generating in
  October 1999, no others being started
• Pricing Issues Paute is paid offreal cost of
  power not reflected in price

11
Climate is Not the Only Issue 2

• Privatization Shifts risk from govt to private
  sector
• Inefficiency (30 losses vs 15 typical in other
  countries), due to grid losses, bootlegging
  (theft)
• Solution? change rates for consumers
• Industry, business some residential customers
  can pay actual rates.
• Other sectors as poor families and some small
  industries should pay according to their payment
  capacity
• May also help address inefficiency (30 losses
  vs 15 typical in other countries), due to grid
  losses, bootlegging (theft)

12
5.2 Institutional aspects related to shortage
management

• Electric energy wasting in Ecuador reaches 30
  (in 1993). Wasting due to smuggling, bad
  connections, network bad conditions, etc. Max
  allowed waste elsewhere 15
• Solution? increase consumer rates
• Industry, business some residential customers
  can pay actual rates.
• Other sectors as poor families and some small
  industries should pay according to their payment
  capacity

13
5.2 Institutional aspects related to shortage
management

• Total savings to Ecuador economy after Paute
  750x106 US in oil. Paute is already paid off
  (640x106 US)
• Actual rates should account only for financing
  OM costs
• Real cost per Kwh unknown
• Rate applied to the user selling costs of US
  0.03 / Kwh

14
5.2 Institutional aspects relatated to shortage
management, cont.

• Inecel deficit too high cost of Kwh of
  electricity has not been adjusted
• No new projects have been started (demand
  increase, service declined). However, Daule
  Peripa (230 Mw) just was put in operation.
  Production will start in October 1999

15
5.2 Institutional aspects relatated to shortage
management, cont.

• Inecel failed to follow the electric master
  plan (1975) in hydroelectric production. It did
  not build Mazar, Daule Peripa-1999 testing
  period.
• Instead, it built 5 more turbines in a region
  where discharges are low (Paute Phase C)
• Water shortage in Paute may cause up to 10 h/day
  of electricity cuts

16
5.2 Institutional aspects related to shortage
management, cont.

• To increase precipitation over the Paute area,
  cloud seeding programs are implemented. However
  there is not a research project in place.
• To increase reservoir levels, public officials
  asked the public to save energy by as much as 10

17
5.3 Decision making process and public response
capability to crisis, cont.

• Ask users to use electricity moderately, mainly
  during peak hours (17h - 21h)
• Production chambers criticize inefficiency of
  electric industry
• Public ask to take measures before low discharges
  happen to occur in Paute.
• Public ask for private investment into the
  electricity industry

18
5.3 Decision making process and public response
capability to crisis, cont.

• National and international investors ask the
  government to open up the Ecuadorian market to
  them
• Public asks for a new Energy Law to guarantee
  good service and fair prices
• Due to the crisis, the public decides to buy
  small generating units to guarantee continuity in
  their activities

19
New Legal Scheme for the Electric Sector in
Ecuador

• Ley de Régimen del Sector Eléctrico, Octubre
  10/96.
• Reglamento Sustitutivo del Reglamento General de
  la LRSE, Octubre 28/97.
• Reglamento de Concesiones.
• Reglamento de Suministro de Servicio.
• Reglamento de Tarifas.
• Reglamento de Despacho y Operación del S.N.I.
• Reglamento del Mercado Eléctrico Mayorista.
• Manuales de Despacho y de Mercado

20
Basic Principles of the Model

• Split normative and regulatory functions from
  operative and trade.
• Allow the private sector to participate in
  operative stages of electric trade.
• Split different states of electric functioning
  (generation transmission and distribution) as
  specific business units.
• Free access to all facilities.

21
Basic Principles of the ModelSPLIT INTO SEVERAL
FUNCTION AS STAGES AS BUSINESS UNITS

• GENERATION
• Economical activity at risk, free competition.
• Functioning based on electricity costs
  (auditing).
• TRANSMISSION AND DISTRIBUTION
• Public services, natural monopolies.
• Distribution not allow energy production.
• All Government facilities will be transfered to
  new electric companies.

22
ELECTRIC SECTOR STRUCTURE

• Consejo Nacional de Electrificación - CONELEC.
• Centro Nacional de Control de Energía - CENACE.
• Generating Electric Companies (Privatized)
• Transmission Electric Companies (Public)
• Trade and Distribution Companies

23
The National Electricity Council - CONELEC

• Fix distribution and trade costs.
• Pass regulation, rules and procedures Verify
  their fulfilment.
• Manage and Control the Concesion process.
• Solve conflicts on services offering.
• Prepare the National Electric Plan (mandatory for
  the public sector, referencial for the private
  sector).

24
National Center for Energy Control

• In charge of technical and financial transactions
  of the Energy Marginal Market. Keep safety of the
  operation of the National Interconnected System.
  Responsible to supply the energy to the national
  market at the cheapest cost possible.
• Technical coorporation (non profit organization)
  formed by all generating, transmission and
  distribution companies and large users.

25
VALUE OF WATER
HYDROTHERMAL RESOURCES OPTIMIZATION

• The time to use and store water must be
  determined, based on randomness of water inputs,
• To set up a decision criteria, each water
  resource is assigned a VALUE OF WATER, which is
  the expected value of future savings during
  normal operation and in its failure due to a
  cubic meter of stored marginal water.
• The value of water is applied to all regulation
  reservoirs, that is to all reservoirs that have
  storage capacity from one period to the other.
• The regulation reservoirs are PAUTE, PUCARA, EL
  DESCANSO

26
RESPONSABILITIES OF THE SUPPLY COMPANIES

• GENERATION COMPANIES
• DEVELOPMENT ASSUMING COMMERCIAL RISKS.
• NOT ALLOW FREE ASSOCIATION BETWEEN COMPANIES TO
  NEGOTIATE.
• CANNOT CONTROL MORE THAN 25 OF TOTAL POWER
  INSTALLED.
• OPERATION BASED ON COSTS AUDITABLE.
• TRANSMISSION COMPANIES
• OBLIGATION TO EXPAND THE SYSTEM.
• MUST ALLOW FREE ACCESS TO FACILITIES.
• CANNOT COMMERCIALIZE ELECTRIC ENERGY.
• DISTRIBUTION COMPANIES
• ONLY ONE DEALER FOR EACH GEOGRAPHICAL LOCATION.
• CANNOT GENERATE ELECTRICITY.

27
Acknowledgments

• Hydrometeorological data were provided by the
  National Institute of Meteorology and Hydrology
  of Ecuador (INAMHI).
• Information related to the Electric Sector was
  kindly provided by the National Center For Energy
  Control of Ecuador (CENACE).
• Some data on socio-economical impacts of droughts
  in Ecuador were taken from several newspapers El
  Comercio, Hoy, El Universo, Expreso