The Chilean Energy Regulatory Framework Comisión Nacional de Energía Andrés Romero Secretario Ejecutivo Comisión Nacional de Energía Intro Generation The Chilean electric industry is divided in 3 segments g Transmission Distribution Intro The cost and payments system is guided by a clear and balanced regulation. g Generators Transmission System Costs Transmitters Generation Costs + Transmission Distributors Free Price Non Regulated Clients Regulated Clients Generation Costs + Transmission + Distribution Added Value The electric system of Chile The Interconnected and minor systems y installed Capacity of Chile: 19.030 MW (Apr. 2015) Interconnec tion planned for 2017 / 2021 Source: The electric system of Chile Electricity y consumption p p per person p (MWh) vs. GPD per person (US$) (2012) Fuente: EIU, EIA Agenda de Energía (the Chilean Energy Agenda) According to the Chilean Energy Agenda presented by the Energy Ministry on may 15th of 2014, one of our greatest t t challenges h ll are: The lack of competition presented by the energy generation market. Non competitive long term contracts between generators and distributors. Slow developing i of the transmission i i grid i Agenda de Energía (the Chilean Energy Agenda) For this reasons, among the objectives and goals of this Government are: A 25% diminish on the price of energy supply contracts. Adding more players to the energy industry. industry Adjusting the energy regulatory frame to better and clearer standards. Generation market opportuni Energy supply contract tenders results 2006-2014 Average price per tender SIC (indexed to Dic. 2014) 160 140 131,1 113,2 120 135,9 108,4 98,9 USS$/MWh 100 80 68,4 66,1 60 40 20 0 Procesos 2006 Procesos 2007 Procesos 2008 Procesos 2010 Procesos 2012 Procesos 2013 Procesos 2014 (13.206 GWh‐ (7.500 GWh‐año) (8.756 GWh‐año) (2.200 GWh‐año) (1.172 GWh‐año) (3.900 GWh‐año) (12.705 GWh‐ año) año) Contracts and demands 60.000 50.000 GWh‐año 40.000 30.000 42.151 20.000 34.737 34.702 35.322 39.967 36.604 37.943 33.144 31.120 25.511 10.000 18.113 15.177 12.227 10.878 10.877 10.877 2028 2029 2030 0 2015 2016 2017 2018 2019 2020 2021 2022 Supplied demand 2023 2024 Demand 2025 2026 2027 New energy supply contracts tender Tender opening Tender opening year Awarding of Awarding of the contracts Energy Energy supply start Energy Volume Volume involved (GWh) Contract lenght Contract lenght 2015 2015 2017 1000 20 years 20 years 2015 2016 2021 12.500 (6.000 the first year) 20 years 60.000 50.000 G GWh‐año 40.000 30.000 42.151 20.000 34.737 34.702 35.322 36.604 39.967 12.500 37.943 33.144 31.120 25.511 10.000 18.113 15.177 12.227 10.878 10.877 10.877 2027 2028 2029 2030 0 2015 2016 2017 2018 Supplied demand 2019 2020 2021 2022 Next short term tender 2023 2024 2025 Next long term tender 2026 Demand Tender process 1. Developing of the preliminary tender report by CNE 2. Developing of the tender terms document 3. A year to present bids 4. CNE defines the maximum hidden price. 5. CNE publishes a resolution with 5 the results and the contracts are signed. Contract elements 1.Private contract between generators and distribuitors. 2. The contract last for 20 years. 3. The 3 Th price i is i indexed i d d to t the th offer and it can be adjusted according to regulatory changes. 4 4. Five years to begin the energy supply, with the chance of delaying it for 2 years, if external problems are proven. 5. Controversy solving mechanism: private arbitrage In short The energy supply contracts tenders give the opportunity to acquiring a 20 year contract and materialize new electric generation investments investments. Contracts The for aprox. 13.500 GWh will be auctioned. contracts last for 20 years. Tender first call on may 2015. Tender closes on may 2016. Energy supply begins on jan. 2017 and jan. 2021. Transmission market opportuni Chilean Transmission Scenario Every year, the Energy Ministry determines the transmission system’s expansion plan. The biggest lines presented on the expansion plan are auctioned in open, public and international processes. The tenders are awarded to the lowest price and they receive a fix payment for their offer, for a period of 20 years. Agenda de Energía (the Chilean Energy Agenda) New energy transmission regulatory framework to be announced before June 31th The two main electric systems (SIC – SING) will be interconnected before 2018. Project opportunities SIC Supply start Building years Proyect Investment cost(ref.) M US$ OMAC (Ref.) US$ Jan.2018 – July 2019 24 and 42 months Nueva Diego de Almagro Selective Substation; New Line 2x22 kV between SUBs Nueva Diego de Almagro – Cumbres and a Autotransformer 1x750 MVA 500/220 kV Proyect 59.550 893 Investment cost(ref ) M US$ cost(ref.) OMAC (Ref.) US$ 174.000 2.610 Interconnection Supply start Building years Jan.2018 – Jan.2020 24 and 54 months New 2x500 kV 1500 MW line between SS Los Changos and SS Nueva C Crucero Encuentro; Autotranformer banks 2x750 MVA 500/220 kV on SS Nueva Crucero Encuentro; Autotranformer bank 750 MVA 500/220 kV at SS Los Changos and M M The Chilean Energy Regulatory Comisión Nacional de Energía Framework Andrés Romero Secretario Ejecutivo Comisión Nacional de Energía
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