Panamá, Junio 2017

“What happened to renewables in Panama??

Or better yet,

was Paris COP21 right for Panama?”

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Who are we?

Our Projects

What happened to renewables?

We are developers of small to medium

Renewable Projects in Panama Active Projects In Operation in Panama

Barro Blanco (28.84 MW hydro)

Development:

Pipeline Projects (*30 MW Mix solar and hydro)

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Barro Blanco Hydroelectric Project

Arch Design, self standing, foot of the dam, NO canal, NO tunnel, small reservoir

low population area, Civil Works 9.5kms from Indigenous Comarca, Minimum affectation to

fauna and flora, world class design, WB environmental requirements. UN MDLCertification

Imágenes de la Central Hidroeléctrica Barro Blanco

Vista de Casa de Máquinas y Canal de Descarga

https://www.youtube.com/watch?v=fg9aglI7fg8

December 2015 – The Paris Agreement

The Countries agreed to:

• Adopt green energy sources, cut down on climate change emissions and limit the rise of global temperatures — while also cooperating to cope with the impact of unavoidable climate change.

• The agreement acknowledges that the threat of climate change is "urgent and potentially irreversible," and can only be addressed through "the widest possible cooperation by all countries" and "deep reductions in global emissions.

"Holding the increase

in global average

temperature to well

below 2 degrees C

above pre-industrial

levels ...“

COMMERCIAL

OPERATION HYDROS

IN PANAMA

NATIONAL ENERGY PLAN

2015-2050

SECRETARIA DE ENERGIA

0

2

1

2

0 0

3

1

2 2

3

4

7

4 4

2

4

1

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017

Can

tid

ad

Año

Entrada en Operación de Hidroeléctricas Panamá (2000-2017)

Bar

ro B

lan

co

Annual World Rainfall

¿No hay agua en Panamá? Según datos del Banco mundial para 2014, Panamá esta de quinto

(5to) en la lista mundial de países con mayor precipitación pluvial (lluvia) del mundo y de

segundo (2do) en América

Fuente: Ing. Ambrosio Ramos, 2015

Panamas Hydro Resources

IS THERE WATER IN PANAMA?

IF Paris is to be, and Panama is a wet

country, …..why hydros are dying?

NGO´s #1 target in the Americas, specially where there are indigenous peoples.

Well organized NGO´s, infiltrated in environmental agencies, and other government agencies, cancelling 12 projects in Panama alone, fining and stopping projects in construction, and making it nearly imposible for new developers to obtain new permits.

Populism leads to work stoppages, causing millions in cost overruns.

Easier to blame the developer for wrong doing, than to appear protecting its rights.

Long time to permit, even longer time to socialize, long time to build

High Costs of Development….

Fuel prices dropped below the financial threshold of loan sustainability.

Lack of government subsidies. No culture of paying more for clean energy

Risk averse Banks funding other proyects that are not socially sensitive

Hidden Agendas…

But wait….what happened to Paris??

Its not Trump or Merkel

Is not our do or die

willingness to

protect our natural

resources

What is it then?

Gas Mermaids?

Are we in for a game changer? The World economic Forum, defines a “Game Changer”, as “a discontinuity

with significant potential to transform how energy

Is produced and consumed over the next 10 to 20 years.

1. Advanced energy acceleration

2. Mobility revolution

3. Energy System Fragmentation

*World Economic Forum

Mobility Revolution prompts changes in the level and type of energy demand, as

a result of new technologies and Business models*. Are we in the middle of a

revolution? Do you all feel the winds of change? Is this the right “move”.

Gas Revolution or Gas Attack

The new Natural Gas business model in Panama has led to

Overcapacity:

Not 1, not 2, but 3 LNGs Facilities, together with their LNG terminals, totaling 1,400 MWs of new installed generation capacity (2021) for a country that:

Maximum Demand is 1,600 MWs

Exports only 40-100 MWs to the north, in a good day.

Has no interconection to the south (and will remain so …. forever?)

Does this make any sense, for a country with no interconnections, and a low consumption??

Bidding discrimination/Renewable Negligence

Against other thermal technologies. LNG gets a 5% bump bonus at bid review.

If it is the perfect technology, shouldnt it compete fairly against everyone else?

Why Paris COP21 applies for LNG, but no effort is spent in incentivizing hydro development other than the dead CO2 credits?

Gas Revolution or Gas Attack

Lack of planing

The GOP has no clue what to do with already installed firm capacity (older technologies, diésel, bunker, LPG), in favor of only one fuel type.….

will they all shut down in favor of the 3 mammoths?

Will they stay as cold reserve?

Does anybody care??

Question to Banks: Uncertainty …. Isnt that a bad Word?

Año / MW Demanda Térmica Renovable

2021 2,092 1,440 652

Proyección al 2021

69%

31%

2021

Térmica

Renovable

REVOLUTION MEANS TRANSFORMATION..

IS THIS WHAT WE WANT?

*Center for Climate and Energy Solutions

The Gas Revolution?

Hydropower’s GHG emissions factor (4 to 18 grams CO2 equivalent per kilowatt-hour[18], [19], [20], [21])

is 36 to 167 times lower than the emissions produced by electricity generation from fossil

fuels.[22],[23] Compared to other renewables, on a lifecycle basis hydropower releases fewer GHG

emissions than electricity generation from biomass and solar and about the same as emissions from

wind, nuclear, and geothermal plants.[24] *

Año 2021

Veladero Llano Sánchez

Chorrera

Mata de Nance

Progreso

Charco Azul

Panamá I

LT – 230 KV

Subestación

Generador: Hidráulico

Bayano

Caldera Fortuna

LT – 115 KV

Guasquitas

Panamá II

Pacora

Bahía Las Minas

Changuinola

LT2- 230 KV

Total: 4377 MW

LT3 – 230 KV

LT - 230 KV SIEPAC

Chiriquí Grande

Cañaza

LT4 500 KV (OPERADA EN 230)

San Bartolo

El Coco

El Higo

Panamá III

Costa Norte 254

235

1121

650

146

1477

494

SVC

SVC

Sabanitas

3 LNG Facilities totaling 1,400 MWs in

the Colon area

https://goo.gl/photos/68yE8xxJz9Bp7R459

So what to do? • Lets take a breather…so much has happened

• Plan Ahead.

– Protect what you have, don’t loose a sure hand, and certainly don’t create more uncertainty.

Have a country long term plan, update it yearly, but always look to create diversity in the

portfolio. Price fishing is not always best for the county.

– Keep politics out of Energy Policy!!!! They don’t mix now, they will never mix well!!!!

– Energy is only good if it can reach the load, build the wire!!!

– Put your ear stops, the sirens are enchanting…but are they real? Think and read all of the

above.

• Gas is good, but water is better, why?

– Look up Panama in google earth and check where it is, and then,

– Look up to the sky! Water is free, renewable, non polluting, and it falls right here in Panama,

in copious quantities….get it?

So what to do? • Don’t disregard the mobility revolution. Its all around us. New business plans drive new agendas,

beware.

• Don´t let the NGO dictate national energy policy. They are misguided, and have hidden agendas

• Panama did not invent the NIMBYs, they are world wide. Do not succumb to their pressure, if it is a

project of national interest, defend it as you would the flag. Others may have not national interest in

their heart.

• Do not let ethnicity obscure clear and defined energy strategy and policy.

– Hydro Projects are the preferred targets of the “ethnical claims of land and retribution¨

– Don’t expose the developer to face 500 year claims alone. If the government is going to side

with their claims, why request the developer to build a hydro in that location? Changing the

rules of the game in favor of politics, is never a good sign for the investors, and less to

international lenders.

– Developers need to work hand in glove with the government, or they will fail.

• Keep you eggs in several baskets. Diversify technologies, and you will not err.

What did we learn at GENISA?

Key factors

Don’t underestimate the NGOs.

No Indigenous áreas unless progressive

Review before political structure of the área, and of the main country investment

Implement sustainability projects early on. People like the visuals, they dont believe in future benefits

Be a good neighbor, but don’t end up being a substitute to the government lack of investment in the area

The scale is tilting

against hydro development in Panama

Paris Agreement PTY

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Thank You Very Much

For your Attention

June 16, 2017

Prepared by: Aldo C Lopez