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Renewable Electricity Generation in South America

Comparative Analysis of Institutional and Technical Conditions Relevant for the Integration of Renewable Energy in South America

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Promoting RenewableElectricity Generationin South America

Authors (in alphabetical order):Paulina Calfucoy, Chile Manuel Díaz Romero, ChileDr. Guillermo Jiménez Estévez, ChileDr. Luis S. Vargas, Chile

Contributing authors:Dr. Javier Aliaga Lordemann, Bolivia Prof. José Baltazar S. O. Andrade Guerra, BrazilMaritza Barrera, ChileFabián Barría, ChileLea Franziska Buch, BoliviaAdriana Bueno Lanchez, BoliviaErick Cerquera, BrazilCarmen Crespo, BoliviaJulia Gottwald, GermanySierra Foster, BrazilJuan Pablo Kindermann, ChileMaria Meyer, Germany

Isabel Ribeiro, Germany Veronika Schulte, Germany Alek Suni, BrazilProf. Youssef Ahmad Youssef, Brazil

This publication is a summary of a study prepared by the contributing authors.

Photography:Fotolia.com, Istockphoto.com

Contact:Universidad de ChileFacultad de Ciencias Físicas y MatemáticasDr. Luis S. Vargas, Dr. Guillermo Jiménez Estévez, Manuel Díaz RomeroE-mail: [email protected]

1. Background 3

2. Analysis of political and institutional framework 5

3. Analysis of available infrastructure, technical capacity, socio-economic and climatic conditions 9 Renewable energy potential by technology 10 Available infrastructure and technical capacity 14 Growth projections for renewable energy 15 Energy prices 17 Renewable energy technology manufacturers 19 4. Comparative analysis and conclusion 21

References 23

Table of contents

Imprint

Hamburg University of Applied Sciences (HAW Hamburg)Faculty of Life SciencesResearch and Transfer Centre “Applications of Life Sciences“Prof. Dr. Walter Leal, Julia Gottwald, Veronika SchulteE-mail: [email protected]

For more information, please visit: www.regsa-project.eu

This brochure has been produced with the assistance of the European Union. The content of this publication is the sole responsibility of the REGSA project consortium and can in no way be taken to reflect the views of the European Union. Printed CO2 friendly.

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1. Background

South America is experiencing a pro-cess of economic and demographic expansion. In recent years its countries have experienced steady economic growth, imposing a strong challenge on their energy sectors that have had to meet rapidly increasing demand. To date, the demand for electricity generation has mainly been satisfied by con-ventional hydropower and fossil fuel sources. In Colombia, Ecuador, Brazil, Paraguay, Venezuela, Peru and Uruguay most electricity generation comes from conventional hydro, whereas Chile, Ar-gentina and Bolivia rely on an electricity mix that is mostly based on natural gas.

Even though the region is rich in natural resources, renewable energy accounts for less than 10% of total generation on average in the region (large-scale hydropower is not con-sidered). Throughout the last decade, most countries have adopted policies to promote the participation of renewable energy in their electricity mix. Never- theless, an important gap remains be-tween renewable energy potential and the effective use of these sources across the region. This situation raises the question of how to increase the share of renewable energy in the mix

to achieve a more sustainable electricity sector.

This publication is an effort to make a contribution to the promotion of non-conventional renewable energy (NCRE) in South America. It is part of the REGSA project “Promoting Re-newable Electricity Generation in Latin America” in which the Hamburg Uni-versity of Applied Sciences, the Bolivar-ian Catholic University from Bolivia, the Foundation from the University do Sul de Santa Catarina from Brazil and the Faculty of Physical and Mathematical Science at the University of Chile par-ticipated. REGSA’s main objective is to contribute to an increase in the use of electrical energy obtained by means of renewable energy generation in South America as a means to improve environmental conditions, enhance energy security and alleviate poverty in the areas where the project is active.

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With the aim of contributing to this general objective, this publication focuses on providing a comparative analysis of the political and institutional framework in the field of renewable electricity generation, together with an analysis of the available infrastruc-ture, technical capacity, socio-economic and climatic conditions relevant for the wider application of renewable energy in ten countries in South America: Ar-gentina, Brazil, Bolivia, Chile, Colom-bia, Ecuador, Paraguay, Peru, Uruguay and Venezuela.

The publication attempts to delin- eate the most important elements that could potentially affect the efforts of promoting NCRE in these countries. The analysis describes the operation of the electricity market, the institutional framework of the electricity sector, the policy framework for renewable energy

electricity generation and the legal and regulatory framework of the electricity sector, along with the potentials and barriers to electricity generation using renewable energies. The analysis includes available infrastructure, tech-nical capacity, socio-economic and cli-matic conditions, as well as renewable energy potential by technology. Finally, the analysis considers energy prices and electricity demand. Most of the informa-tion comes from government sources and institutional documents up-to-date in 2010.

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Most countries in South America present a similar market design based on a vertically disintegrated structure organized under a wholesale electricity market and bilateral financial contracts with relevant participation by the pri-vate sector. Only Paraguay maintains an integrated model under state con-trol. In terms of institutional develop-ment, since the economic reforms in the 80s, most countries in the region have implemented an institutional de-sign based on autonomous institutions devoted to the functions of planning, supervision, regulation, policymaking and environmental management. The promotion of non-conventional renew-able energy is a new task that in most of the cases has been assumed by the Ministry of Energy defining common policies at the national level.

To increase the participation of re-newable energies in electricity generation, the countries in the region have implemented different kind of policies based on their domestic political economies, institutional capacity, en-ergy characteristics and policy goals. The countries with greater challenges in electricity coverage have identified renewable energies as a means to in-crease electricity access for their rural population, while other countries are mainly interested in diversifying their electricity mix to increase energy security and efficiency. In this diverse con-text, most of the countries in the region have incorporated NCRE promotion as part of their political goals for the en-ergy sector in the mid and long term. Countries like Ecuador mention the relevance of renewable energy in their

2. Analysis of political and institutional framework

Figure 1: renewable energy legal framework. Source: self preparation based on information from [1] [2] [3] [4] [5] [6] [7] [8]

1998 Argentina

Law 25,019

2001 ColombiaLaw 697

2002 Brazil

Law 10438

2006 Argentina

Law 26,190Uruguay

Law 18,585and Decree

77/06

2008 Chile

Law 20,257Peru

Law 28,546and Decree

1,002

2010 ColombiaResolution

180,910

2011 Ecuador

CONELEC004

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constitutions, while all other countries consider NCRE as an important com-ponent in their national energy policy documents or in their rural electrifica-tion plans.

Since 1998, the countries in the re-

gion have enacted laws, decrees or resolutions to promote the participa-tion of NCRE in the electricity mix. However, not all have actually moved forward with specific legislation to pro-mote NCRE in their energy mix. Bolivia, Venezuela and Paraguay have not yet enforced any legal instrument to for-mally incentivise NCRE. In turn, Argen-tina started this process in 1988 with the enactment of Law 25,019 with the aim of promoting wind energy, while Ecuador was the last country to date to set a regulatory framework for the promotion of NCRE in 2011. The scope of the regulations across the region dif-fers greatly.

Some regulations are more declara-tive, while others integrate the definition of programmes and funding mech-anisms and define measures to support the development of institutional capacity to achieve their objectives.

Argentina implemented a renewable energy trust fund for RE promotion pol-

icy, while Colombia defined a specific public fund for supporting rural elec-trification. Other countries like Brazil, Ecuador and Uruguay have set rules for the integration of the costs linked to the promotion of RE policies into gen-eral energy prices. In Brazil, additional administrative and financial costs are spread among all types of end users, except for those with lower incomes

Table 1: funding mechanisms

Argentina Renewable Energy Trust FundBolivia --Brazil Additional administrative and financial costs to be spread among all types of end users, except for those with lower incomes or consumption equal to or below 80 kWh/monthChile --Colombia Renewable Energy Fund for Rural ElectrificationEcuador Generators and non-regulated consumers assume additional costsParaguay --Peru --Uruguay The costs associated with the contracts will be included in rates paid by consumersVenezuela --

Source: self preparation based on information from [1] [2] [3] [4] [5] [6] [7] [8]

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or consumption equal to or below 80 kWh/month. In turn, in Ecuador, gen-erators and non-regulated consumers assume additional costs. For the other countries there are no specific defin- itions for the strategies and mechanisms adopted to fund the additional costs of promoting NCRE. This situation could eventually imply less political stability for NCRE projects as, in the medium and long term, there is no clarity re-garding the costs and the distributive effects. Table 1 shows funding mechanisms in the region.

Figure 2: Renewable energy integration mechanisms in South America. Source: self preparation based on information [1] [2] [3] [4] [5] [6] [7] [8]

Feed-in tariff

Competitive biddingprocess

Renewable portfoliostandards

No integrationmechanism

Throughout the region, different mechanisms of promotion have been adopted. Brazil, Peru and Uruguay use a competitive bidding process; Argen-tina and Ecuador have opted for a feed-in tariff mechanism and Chile and Co-lombia have integrated the Renewable Portfolio Standard model. This distribu-tion is presented in the map of South American in the next figure.

The policies adopted to support the participation of renewable energy in the region follow different directions

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that can be categorised as cheap buy-ing or strategic support strategies. In this category Argentina, Brazil and Uruguay use incentives to promote technological development in specific technologies (hydro, wind, biomass), while all other countries have adopted policies oriented towards integrating renewable energy by importing cheap technology and facilitating technological adaptation at the national level.

Renewable energy target consump-tions complement these measures. Ar-gentina’s goal is that 8% of total en-ergy consumption will be of renewable energy by 2017. Brazil has a similar tar-get of 10% by 2022. Chile’s target is 10% by 2024, while Colombia’s is 30% in rural areas and 6.5% in the intercon-nected system by 2020; Peru’s is 5% by 2013 and Uruguay’s is 15% by 2015. These targets are not necessarily associ-ated with the definition of public pol-

icies to achieve them, nor with sanctions or corrective meas-

ures to guarantee their ef-fectiveness. Targets are

presented in table 2.

Table 2: Renewable energy targets

Argentina 8% by 2017Bolivia --Brazil 10% by 2022Chile 10% by 2024Colombia 6,5 of IS and 30% of NIZ by 2020Ecuador 83% by 2020Paraguay --Peru 5% by 2013Uruguay 15% by 2015 Venezuela --

Source: self preparation based on information [1] [2] [3] [4] [5] [6] [7] [8]

Countries in the region differ in terms of the stage of development of the NCRE sector. Brazil and Argentina start-ed early with the implementation of promotion policies in this field and have additionally made efforts to build tech-nical capacity for the development of a domestic industry in NCRE. All other countries considered in this publication face the common challenge of collect-ing sound information for supporting decision-making processes regarding the promotion of NCRE. Therefore, there is a lack of detailed data about the technical and economic potential of most renewable sources, presenting a real challenge for investment decisions and policymaking.

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An analysis of available infrastruc-ture and technical capacity is presented below. It includes an overview of re-newable energy potential by technol-ogy, the available infrastructure and technical capacity and information about growth projections for renew-able energy and energy prices. In addition, manufacturers’ information on RE technologies is also presented.

3. Analysis of available infrastructure, technical capacity, socio-economic and climatic conditions

Regarding socio-economic and cli-matic conditions, there are some issues that deserve to be mentioned. In the case of the economic conditions, table 1.3 shows the GDP and GDP per capita of the different South American coun-tries.

Source: IMF [18]

Table 3: GDP and GDP per capita of South American Countries

Country GDP (PPP) 2012 GDP per capita 2012 USD (m) USDk/year

South America 4,590,214 11,555

Brazil 2,393,954 12,038

Argentina 756,226 18,394

Colombia 500,576 10,742

Venezuela 396,848 13,242

Peru 332,675 10,679

Chile 316,516 18,305

Ecuador 134,804 8,854

Bolivia 54,134 4,996

Uruguay 53,365 15,84

Paraguay 35,262 5,294

Guyana 6,083 7,83

Surinam 5,375 12,255

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Though GDP and GDP per capita do not completely show the economic sta-tus of a country, these measures can be used as indicators. First of all, it is important to note that while the aver-age GDP per capita for South American countries is US $11,812, the average for OECD countries is US $34,868. In the context of renewable energies, if a set of feed-in tariff supporting coun-tries is selected1, the average GDP per capita is US $38,853. The former in-dicator clearly shows that, in order to introduce renewable energies in a mas-sive way, the economic status of the country plays a significant role.

South America hosts a great variety of climates: the Amazonian rain forest, the dry weather of Patagonia, the arid- ity of the Atacama Desert and the winds of the Tierra del Fuego. Throughout the region:

• There is a wide range of latitudes. Major parts of the subcontinent fall within the tropics, the Equator passes through the northern part, the Tropic of Capricorn passes near the average latitude. Below this tropic, warm weather is predom- inant in Uruguay, central Argentina, southern Brazil and northern Chile, while Mediterranean weather is pre-

dominant in central Chile. Finally, in Patagonia, there is cold weather (humid cold in the Andes and west-ern areas, and dry cold in the eastern area).

• There is a temperature difference between the oceans; generally the Atlantic side is warmer, while the Pa-cific is cold because of the Humboldt Current from the Antarctic.

• The Andes present large thermal dif-ferences according to the altitude, but also act as a thermal barrier.

• In the western region, between the Andes and the Pacific, there are the most humid zones of the planet: the Chocó (Colombia, Ecuador, Peru, Panama), and also the driest: the Atacama Desert (Chile), which, in some areas, has not registered rain for more than 100 years.

Renewable energy potentialby technology

In terms of renewable energy po-tential, the common factor among the countries is the lack of reliable infor-mation to build appropriate scenarios and renewable energy development plans. Countries like Chile, Brazil and Argentina have made significant efforts

1 Germany, Spain, Ireland and Austria.

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Table 4: renewable energy potential comparison of South America – part 1

Large potential in the north

Andean Altiplano and south-west have greatest potential

Great potential in the north-east

Great potential in Atacama Desert (40,000–100,000 MW for 2025)

Large potential in the north

Argentina

Bolivia

Brazil

Chile

Colombia

Country Solar Wind Hydro Biomass Geothermal

500 GW estimated in Santa Cruz and Chubut province

Potential in the central highlands and plains

Estimated in 144 GW in the east

Great potential of 40 GW for 2025 (1.5 GW technically feasible)

Guajira with a potential of 21 GW

Technically feasible potential of 130 TWh per year. Andes, great rivers of Patagonia and north-east (Iguaçu, Paraná)Estimated at 39 GW. Amazon and the eastern Andes

Estimated at 174–260 GW. Amazon and Paraná Basin

Great potential of 20.4 GW for 2025 (3 GW technically feasible)

Estimated at 114 GW. Andean region

Higher potential in central and northern regions. Agricultural and forest areas

High availability of biomass (270 TWh per year). Amazon (north-east)Estimated at 6,518 TWh per year (44 TWh of sugar cane)

Great potential of 13.7 GW for 2025 (3.2 GW technically feasible)

Estimated at 16 GWh per year

Potential of 2 GW. Concentrated in the Andes

Potential of 2.5 GW. Concentrated in the Andes

Potential of 2 GW. Concentrated on NE coast, the south and in the Chaco and Matto Grosso.Great potential of 16 GW for 2025 (1.5 GW technically feasible). Concentrated in the AndesPotential of 2.2 GW Concentrated in the Andes

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Table 4: renewable energy potential comparison of South America – part 2

Ecuador

Paraguay

Peru

Uruguay

Venezuela

Country Solar Wind Hydro Biomass Geothermal

Large potential in Loja province

Little variation within the country, relatively high and largest potential near the capitalSouth and altiplanic region with highest potential

Artigas province with the highest potential

Potential in the north

Estimated between 80 and 100 MW

Has not been estimated

Estimated at 77 GW (22 GW technically feasible

Estimated at 3 GW mainly in the south

Estimated at 20 GW mainly in the north

Estimated at 21.5–93 GW

Estimated at 1 GW in addition to current installed capacity

60,000 MW technically feasible

1 GW in addition to installed capacity in the north (Uruguay River basin)Technically feasible potential of 260.7 TWh per year

Estimated at 13.5 TWh. agricultural and agro-industrial wasteHas not been estimated

Estimated at 177 MW. Forest and agro-industrial waste

200 MW from sawmills and 100 MW associated with waste. North Estimated at 340 MW. Agricultural and agro-industrial waste in the north

Great potential estimated at 3 GW. Concentrated in the AndesN/A

Great potential estimated at 3 GW. Concentrated in the AndesN/A

Estimated in 910 MW

Source: self preparation based on information from [5]

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to improve the quality of the data, but the investment in sound information re-mains unresolved. Nevertheless, based on the information available, most of the countries located in the subtropical area have high solar potential.

Most Andean countries should

have geothermal potential, which in most cases is yet to be estimated. The Guajira area shared between Colombia and Ecuador and Patagonia in Argen-tina and Chile present high potential in wind energy and most countries with intensive agricultural activities have bio-mass potential.

Although solar resource maps have been developed in all countries, there is no quantitative estimate of the po-tential to generate electricity from solar resources in the region. Only Chile has a rough estimate of its potential. However, the countries in the region are known to have high measures of solar radiation reaching over 6 kWh/m² annual average day, with mild annual oscillation as a product of latitude. In addition, many of the regions with high potential are located near to the large interconnected systems.

Most countries have wind maps and generally have good wind speeds

recorded (greater than 5 m/s). One major problem is the vastness of the area, which results in low connectivity. Regarding hydroelectric potential, the region has significant resources located near the Andean Mountains and the rivers of Patagonia, Iguaçu and Paraná, in addition to the Amazon and Paraná basins.

In the case of Bolivia, currently only 1% of its potential is exploited, while for example, Argentina and Brazil ex-ploit around 20–30% of their potential. Argentina has a theoretical potential of 172,000 GWh, and small hydroelec-tric resources would be 1.81% of the total. It also has a technically feasible potential of 130,000 GWh. For its part, Brazil has the largest hydraulic potential in the world (174–260 GW installable), including 7.3 GW potential in small hydro.

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In the case of biomass, the countries of the region have significant resources for the generation of energy from agricultural waste (banana, rice, coffee etc.), agroforestry, sugarcane, livestock waste, grain plus CHP gasification and combustion of plantation crops, forest-ry and timber. Regarding geothermal energy, there is significant potential, concentrated mainly around the Andes.

Available infrastructure andtechnical capacity

Available infrastructure, technical capacity and the goals of incorporating

these energies in different countries of South America caused a different situation in installed capacity and electricity generation in each country. Below is a summary of the status of conventional hydroelectricity in the ten countries along with a baseline against Germany. The latter is considered because of its international reputation as a leader in NCRE technology and because it is part of the REGSA project.

Regarding installed capacity, Brazil, Uruguay and Colombia had more than 60% of their electrical grids powered by renewable energies as of 2010 be-

Figure 3: renewable capacity comparison of South America (%). Source: self preparation based on information from [5] [9] [10] [11] [12] [13] [14] [15] [16]

Argentina Bolivia Brazil Colombia Ecuador Peru Uruguay Chile Germany

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Figure 4: renewable generation comparison of South America (%). Source: self preparation based on information from [5] [9] [10] [11] [12] [13] [14] [15] [16]


cause of their important hydro resources. Both Germany and the rest of the South American countries have less than 50% participation.

It can be seen that both available infrastructure and technical capacity affected the development of installed capacity and electricity generation through RE sources in each country. Importantly, in some periods of the 90s, Uruguay and Brazil produced more than 90% of their electricity from re-newables. This situation is completely different if it is take into account only non conventional renewable gener-

ation (without conventional hydroelec-tricity), where the proportion of renew-able energy generation is smaller than 5% on average for the region.

Growth projections for renewable energy

Determining growth projections for RE in power systems over the coming years is a difficult task because of the following: • Despite the high energy potential

of the countries in the region, this potential has not been specifically quantified. Moreover, most of the

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Figure 5: renewable (without hydraulic) generation comparison of South America (%). Source: self preparation based on information from [5] [9] [10] [11] [12] [13] [14] [15] [16]


potential the correspondent authorities have claimed is related to gross potential, which is not necessarily the same as technical and/or feasible potential.

• There are uncertainties associated with the energy scenario. There is no concrete knowledge about the behaviour of fossil fuel prices during coming years, which would provide a clear indication of how competitive RE technology might be.

• RE growth strongly depends on the maturity of the technology and the strategies adopted by the countries for integrating RE into the market.

Furthermore, having the technical capabilities at the local level to in-tegrate the generation technologies into the power systems is also an im-portant factor affecting growth.

• Despite what is technically possible as far as integrating RE into the power systems, economic capability (i.e. being able to afford technological change) is a factor that can affect growth. Energy payments ultimately come from the clients’ final contri-butions or state-funded subsidies which rely on tax revenues.

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Given the aforementioned reasons to project RE penetration, energy au-thorities contract consultants and ex-perts who, making use of modelling tools, are able to estimate the expan-sion of their power systems. This kind of information is not always available and is most often difficult to find. As a consequence, to date, what is for-mally available are the RE penetration goals determined by the correspondent authorities, which are presented in the institutional analysis of this work.

Energy prices

The wholesale energy market gener-ally presents relatively low prices, except in Chile and Uruguay. These low prices are explained by the high presence of large hydro dams and the availability of fossil fuels. In fact, Chile and Uruguay are the countries that present a major dependency on fossil fuels when com-pared with the others2. The next two figures show the behaviour of energy prices, at wholesale market level, dur-ing the year 2011. These figures also show expected LCOEs (levelised cost of energy) for different RE (renewable energy) technologies. Given that LCOEs are a function of different variables (i.e. investment costs, plant factor, interest rates), these may vary in a significant

way, which is why LCOEs are represent-ed as a range (see colour bars in the figures). For instance, the yellow bar represents the LCOE for solar PV vary-ing between 260 and 104 USD/MWh. These bars also show the plant factors (pf) considered for the analysis.

In the case of Chile and Brazil, RE technologies are clearly competitive; especially wind, hydro, biogas and bio-mass. In the case of Chile SIC, variation in price is high as a consequence of the hydrology scenario, demand behaviour and fossil fuel prices; while Chile’s SING does not present high variation considering that it is almost a complete ther-mal system. On the other hand, Brazil presents lower energy prices, basically

2 Paraguay also presents high dependency on overseas fossil fuels, but its energy supply for electricity generation is basically fulfilled by the contribution of the Itaipú hydro power plant.

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hydro-dominated systems, where RE technologies are not competitive at all.

As stated before, Uruguay also pre-sents dependency on imported fossil fuels, showing higher energy prices when compared with other South American countries. Other countries, such as Colombia and Ecuador present energy prices between 70 and 40 USD/MWh, making just biomass and hydro competitive, which are the RE sources that have been historically introduced into South American power systems.

Figure 6: wholesale energy prices for Chile and Brazil compared with RE LCOEs3. Source: self preparation based on information from [17]

Chile SIC Chile SING Brazil SE/CO Brazil S Brazil NE Brasil N

Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11

Month

There are other RE technologies that may be competitive in the coming years, among them wind and biogas, showing LCOEs between 104 and 57 USD/MWh. It is also important to state that some technologies have presented a significant decrease in their invest-ment costs, such as PV solar, showing LCOEs that reach approximately 100 USD/MWh. The former price increases the possibility of making this technol-ogy competitive in Chile and Uruguay.

3 Hydro LCOEs are associated with projects under 20 MW of installed capacity. It does not include large reservoirs.

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Renewable energy technologymanufacturers

Table 5 shows a comparison of four countries with some development in the manufacturing of renewable en-ergy technologies.

In the case of solar technology, there is research and development primarily focused on technology implementation in South America, led mainly by universities. This development corresponds with the emergence of technology in the region, with no massive incorporation,

Figure 7: wholesale energy prices for Argentina, Bolivia, Colombia, Ecuador, Peru and Uruguay compared with RE LCOEs. Source: self preparation based on information from [17]

Argentina Bolivia Colombia Ecuador Peru Uruguay

Jan 11 Feb 11 Mar 11 Apr 11 May 11 Jun 11 Jul 11 Aug 11 Sep 11 Oct 11 Nov 11 Dec 11

Month

only low-cost applications in rural loca-tions, agricultural applications, pump-ing, etc. Additionally, there are some specialised scientific associations work-ing on this technology but government efforts have been limited regarding its introduction. The private sector has not made a major commitment to the devel-opment of this technology either.

In the case of wind technology, sev-eral research centres specialised in the development of such energy operate in this region. Argentina is the only Latin American country where wind turbines

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are produced locally by three companies.

Meanwhile, there is widespread and important technological development in hydropower, along with a lot of maturity in the use of resources. The expert- ise gained in large-scale hydropower is transferable to mini hydro. There are also important contributions to research on this subject from universities and the private sector and a high level of sophis-tication in technology and services.

For biomass, Argentina has high technical capacity development and production of biofuels, and a major industry in sugarcane, soybeans, cer- eals and sunflowers, related to the high agricultural potential of the country (Argentina is the main soy producer in

the world). Many agricultural industries produce biofuels for their own use. For its part, Brazil has a highly developed ethanol industry and many sugar co-generation plants. The rest of the coun-try shows emerging biomass develop-ment.

In the case of geothermal, there is almost no use of this resource commer-cially. Given the significant geothermal resources existing in the region, there are attempts to remedy this situation with growing research (geothermom-etry, geology, geo mechanics).

Table 5: RE technology specialities and manufacturers in Argentina, Brazil, Chile and Uruguay

Argentina Brazil Chile Uruguay

Local products (specialities)

Companies

Wind turbines

MAKIARGENTINA, ST Charger, NRG Patagonia, GIAFA, IMPSA, INVAP, WINDEARTH PA-TAGONIA SRL, etc.

Wind turbines

Tecsis, Gamesa, Suzlon, Enercon, IMPSA

Wind services

Eozon (Fibrovent)

Wind services

IMPSA (wind services)

Source: self preparation based on information from [5]

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Each country has adopted different policy alternatives considering their domestic political economy, RE poten-tials and economic and technological context. The countries differ in terms of institutional capacity, market conditions and renewable energy potential, mak-ing it difficult to define a single best policy alternative to promote renew-able energy participation in the electricity mix. However, there are some issues that remain unresolved in most of these countries, that could be taken into con-sideration for future improvements in the process of adjusting their renew-able energy promotion initiatives.

A shared challenge across South American countries is the need to de-fine a better strategy to gather infor-mation in a public-private partnership to build better public policies in this sec-tor. The definition of technical and eco-nomic potential of renewable sources is key for investors and policymakers to start planning an effective promo-tion policy. Additionally, it is necessary to increase the availability of technical information to facilitate the integration of renewable sources into the national grids. Furthermore, to date, not all of these countries have adopted technical

norms to diminish uncertainty in pro-ject development.

In terms of economic and institution-al barriers, the region is still in the pro-cess of moving from declarative policies toward effective programme designs in order to achieve their objectives. Along the way, countries will need to navi-gate between regulatory and political stability to spur investment, but also in-crease flexibility to respond adequately to changing conditions. For example, in Argentina’s case, while the laws that promote NCRE have an additional pay-ment premium for the power produced as their main incentive, as long as its price premium does not fully subsidise the actual price gap, there is still un-certainty for the investors in terms of energy trading volumes and conditions that will affect the transactions in the short and medium terms.

Another important eco-nomic barrier that af-fects the profitability of RE investment in the region is

4. Comparative analysis and conclusion

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the existence of market distortions in the energy sector. Bolivia, Ecuador, Vene- zuela, Brazil and Argentina exert price controls or apply subsidies for oil or nat-ural gas that outweigh the incentives and tax benefits designed to favour the development of NCRE projects.

Even though countries like Argen-tina, Brazil, Uruguay and Ecuador pro-vide economic incentives for renewable energy projects, only Brazil has a pro-gramme oriented towards increasing access to funding for RE projects on a global scale. This measure has been ef-fective in increasing the supply of NCRE projects in the competitive bidding pro-cess adopted by Brazil to guarantee their participation in its energy mix.

In terms of potential political barriers, most countries in the region have insuf-ficient investment and deficient regula-tory conditions, which jeopardised the quality of the country’s energy supply. To address these strategic problems, most have prioritised short-term solu-tions, which are not very efficient or ef-fective in spurring on the introduction of renewable energy to cope with the supply challenges facing the country.

To date, there is not enough data to evaluate the effectiveness of the meas-

ures implemented or the effectiveness of the changes in the regulatory frame-works. Throughout the region, however, it is possible to observe a rising trend in renewable energy generation, espe-cially for those mature technologies – wind and solar energy and biomass – in the case of Brazil. Nevertheless, there is still an important gap between the the-oretical and economic potential for as yet unexploited NCRE that could open up interesting opportunities in the near future.

A starting point shared for all the countries in the region, as far as imple-menting promotion policies goes, will be to increase the quality of the infor-mation available to support public policies and investors’ decisions. This effort could make an even better contribution if it were developed in a private-public partnership to increase the participa-tion of potential private investors.

Finally, the lack of binding agree-ments among developing countries to control emissions of CO2 as part of international climate change commit-ments diminishes external incentives to green the energy mix. This makes domestic factors the most important factor to increase interest in developing NCRE.

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References[1] Senate and Chamber of Deputies of the

Argentine Nation, (2006), Law 26,190, (Senado y Cámara de Diputados de la Nación Argentina, “Ley 26.190”), Avail- able at: http://www.argentinaeolica.org.ar/ portal/images/stories/Argentina_LEY%2026190.pdf

[2] Senate and Chamber of Deputies of the Argentine Nation, (1998), Law 25,019, Available at: http://www.argentinaeolica.org.ar/portal/images/stories/LEY%2025019.pdf

[3] Presidencia de la Republica, Perú, Decreto 1002, Available at: http://www.minag.gob.pe/download/pdf/herramientas/or-ganizaciones/dgpa/decretos/1002.pdf

[4] Presidencia de la República, Perú, Ley 28.876.

[5] J.P. Kinderman, Análisis comparativo de Mecanismos de Integración de ERNC en Sistemas Eléctricos, Tesis, Facultad de Ciencias Físicas y Matemáticas Universi-dad de Chile, (2012).

[6] Commision of Regional Energetic Integra-tion (CIER), (2011), Regulation of the Elec-tric Sector, (Regulación Sector Eléctrico), Available at: https://sites.google.com/site/regulacionsectorelectrico/argentina

[7] R. Palma, G. Jiménez & I. Alarcón, Las En-ergías Renovables no Convencionales en el Mercado Eléctrico Chileno, Proyecto Energías Renovables no Convencionales (CNE/GTZ), Santiago, Chile, 2009.

[8] Ministerio de Minas y Energía, “PROIN-FA”, Available: http://www.mme.gov.br/programas/proinfa/

[9] Consejo Nacional de Electricidad (CONELEC), “Estadística del Sector Eléc-trico Ecuatoriano, año 2009”. 2010. Available at: http://www.conelec.gob.ec/images/documentos/doc_10048_Bole-tin%202009.pdf

[10] Comisión Nacional de Energía, Chile “Es-tadísticas Energía Electricidad” Available at: http://www.cne.cl/estadisticas/energia/electricidad

[11] Cámara Oficial Española de Comercio e Industria en Bolivia, “Datos Gener-ales de Bolivia – Recursos: Energía”, Available at: http://www.camara.com. bo/ index.php?view=art ic le&cat id=4 7 % 3 A b o l i v i a & i d = 8 2 % 3 A d a t o s -generales-de-bol iv ia&option=com_content&Itemid=74&limitstart=5

[12] Ministerio de Industria Energía y Minería, “Estadísticas” Available at: http://www.miem.gub.uy/web/energia/publicaciones-y-estadisticas/energia-electrica

[13] Ministerio del Poder Popular para la En-ergía Eléctrica

[14] Secretaría de Energía, Argentina, “In-forme sector electric”, Available at: http://energia3.mecon.gov.ar/contenidos/verpa-gina.php?idpagina=3444

[15] Ministerio de Minas y Energía, “Estadís-ticas Eléctricas Anuales”. Available at: http://www.minem.gob.pe/descripcion.php?idSector=6&idTitular=638&idMenu=sub115&idCateg=350

[16] United Nations, “ Energy Statistics” [65, 66, 67, 68, 69, 154, 167, 173, 174, 175, 177, 178, 179, 180, 181, 182, 183, 184, 185, 186, 187, 188]

[17] Centro de Energía, Facultad de Ciencias Físicas y Matemáticas, “Desarrollo de Investigación Aplicada en Tecnologías ERNC: Linea 1 Costos de Desarrollo de Tecnología ERNC ”, Diciembre 2012

[18] IMF, World Economic Outlook Database, October 2012. Available at: http://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weoselco.aspx?g=205&sg=All+countries+%2f+Emerging+and+developing+economies+%2f+Latin+America+and+the+Caribbean

http://www.argentinaeolica.org.ar/portal/images/stories/Argentina_LEY%2026190.pdf

http://www.argentinaeolica.org.ar/portal/images/stories/LEY%2025019.pdf

http://www.minag.gob.pe/download/pdf/herramientas/organizaciones/dgpa/decretos/1002.pdf

https://sites.google.com/site/regulacionsectorelectrico/argentina

http://www.mme.gov.br/programas/proinfa/

http://www.conelec.gob.ec/images/documentos/doc_10048_Boletin%202009.pdf

http://www.cne.cl/estadisticas/energia/electricidad

http://www.camara.com.bo/index.php?view=article&catid=47%3Abolivia&id=82%3Adatos-generales-de-bolivia&option=com_content&Itemid=74&limitstart=5

http://www.miem.gub.uy/web/energia/publicaciones-y-estadisticas/energia-electrica

http://energia3.mecon.gov.ar/contenidos/verpagina.php?idpagina=3444

http://www.minem.gob.pe/descripcion.php?idSector=6&idTitular=638&idMenu=sub115&idCateg=350

ttp://www.imf.org/external/pubs/ft/weo/2012/02/weodata/weoselco.aspx?g=205&sg=All+countries+%2f+Emerging+and+developing+economies+%2f+Latin+America+and+the+Caribbean

Partnership

Germany · Lead partnerHamburg University of Applied Sciences (HAW Hamburg)Faculty of Life SciencesResearch and Transfer Centre “Applications of Life Sciences“Prof. Dr. Walter Leal, Julia Gottwald, Veronika Schulte

Lohbruegger Kirchstrasse 6521033 Hamburg, GermanyTel.: +49.40.428 75-6354Fax: +49.40.428 75-6079E-mail: [email protected]: www.haw-hamburg.de/ftz-als.html

BoliviaUniversidad Católica BolivianaInstituto de Investigaciones Socio-EconómicasDr. Javier Aliaga, Adriana Bueno LanchezE-mail: [email protected]: www.ucb.edu.bo

BrazilFundação Universidade do Sul de Santa CatarinaProf. José Baltazar S. O. Andrade Guerra,Prof. Arq. Luciano DutraE-mail: [email protected], [email protected]: www.unisul.br

ChileUniversidad de ChileFacultad de Ciencias Físicas y MatemáticasDr. Luis S. Vargas, Dr. Guillermo Jiménez Estévez, Manuel Díaz RomeroE-mail: [email protected]: www.die.uchile.cl

For more information, please visit: www.regsa-project.eu

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