Moderator – Cesar Butrón, Chairman of the Board of Committee for Economic Operation of the National Interconnected System (COES)
The main speaker was Enrique Rodríguez-Flores, Specialist in Energy of Inter-American Development Bank (IDB), who analyzed that the energy integration is a key element in politics for the development of Latin-American region as it will allow
- Improve security of energy supply, sharing resources and taking advantage the complementarity.
- Exploit the benefit from economy of scale.
- Increase reliability and reduce costs in the supply of energy inputs, achieved through interconnected infrastructures and reliable markets.
These benefits could be proven in the most important and most interesting energy integration project that IDB has developed so far: Central American Electrical Interconnection System (SIEPAC) / Regional Electricity Market (MER). This project was based on two main components: (i) hard component: regional electricity infrastructure composed of transmission (SIEPAC Line, backbone going through Guatemala, El Salvador, Honduras, Nicaragua, Costa Rica and Panama) and generation (plants with electric vocation with regional purposes); (ii) soft component: creation of a seventh market with a governing board, a regulator and regional operator; and establishment of standards.
On the other hand, Andean Electrical Interconnection System (SINEA) Project in which Bolivia, Chile, Ecuador, Colombia and Peru are participating was also mentioned; which has mainly, among others, the following objectives: (i) facilitate regional and international transactions, (ii) obtain specific bilateral agreements to promote businesses in the electricity sector.
Finally, it was emphasized that integration is profitable but it can be a long process; in this regard, the key elements to facilitate the success of this type of projects are: (i) obtain and ensure permanent political commitments with the integration process, where “permanent” means that they are immune to changes of the government, (ii) achieve and ensure confidence among neighboring countries, (iii) strengthen national and regional institutionality, and (iv) ensure regulatory frameworks and the legal security that will allow new investments.
The panel of this session was made up by:
Byron Betancourt, representative of the National Electricity Council of Ecuador – CONELEC, explained that the interconnection process of the energy networks (See Presentation) should be done with an optimization of energy resources available in the region, generating benefits such as: (i) security in supply, (ii) optimal use of natural resources, (iii) quality of service, (iv) efficiency in investments, and (v) lower environmental impact.
To achieve the above mentioned and have the electrical integration, there should be resources (of all countries to take advantage of complementarities), rules (harmonization process), networks (roads), and support from governments. Thus, what we expect to achieve with all these actions are: (i) have an Andean corridor that goes from Colombia to Chile, and (ii) achieve integration of Union of South American Nations (UNASUR), where the South American Energy Treaty is being discussed.
Therefore, to obtain a regional electrical integration, we should meet the following phases: (i) bilateral harmonization, (ii) integral dispatch, (iii) complete regional integration (regional operator, regional regulator, regional rules, regional planning) and (iv) integration of regional markets.
Daniel Salazar, representative of Economic Load Dispatch Center of Interconnected System of Norte Grande of Chile – CDEC SING,stated that the regional energy integration is an issue that for a long time was not included in the Chilean agenda. This situation has changed, due to the current context and the Chilean experience regarding the energy matrix. The panelist reminded us that the past decade, Chile lost the main energy source they had invested in, which was the Argentinian natural gas, generating high costs for replacing the matrix and, at the same time, the need of dealing with another look at integration processes.
On the other hand, he indicated that the electricity demand of Chile is and will continue being strong, considering that it is a mining country. As for electrical supply, he stated that prices are very high compared to other countries of the region. He also stated that Chile does not have gas and carbon, therefore, they are investing in the hydroelectricity and renewable energies.
He stated that renewable sources are a competitive option in Chile, not only for the price, but since it is an abundant resource in Chile, considering that the Atacama Desert is a very conducive geographic space for development of the solar technology. In this regard, he stated that from his point of view, the national production will not only be for domestic requirement supply but also for exporting to neighboring countries, as in the case of Argentina, whose integration is being processed making possible energy exchanges.
Finally, he stated that the integration is not only with Argentina. For this purpose, he mentioned different studies that converge on the feasibility of integrating countries of Pacific Region. In his opinion, what comes next is a bilateral relationship that should emphasize regulatory and technical aspects.
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