Dr. César Emiliano Hernández Ochoa Undersecretary of electricity

Transcription

1 Dr. César Emiliano Hernández Ochoa Undersecretary of electricity Growing Economies: Latin America Energy Forum 2017 march 10th,

2 Índex Impact of the Reform The Wholesale Electricity Market: A market of markets Short Term Market Long Term Electricity Auctions Capacity Balancing Market Clean Energies Electricity Investment Opportunities Electric Trade between Mexico and USA. Universal Electric Service Fund (FSUE) Next Steps

3 Impact of the Reform

4 ELECTRICITY MARKETS WORLD MAP The Energy Reform Mexico introduced a wholesale market with retail competition. Mexican industrial organization in the electricity sector is moving towards the best practices in the OECD. 4

5 The Wholesale Electricity Market: A Market of Markets

6 MARKET PRINCIPLES Give incentives to create value and operate efficiently. Privilege for decision-making for competitive processes. Ensure open, non-discriminatory access. Ensure transparency. 6

7 COMPONENTS OF THE ELECTRICITY MARKET Product MEM Bilateral Energy Ancillary services Capacity Clean Energy Certificates Financial Transmission Rights Bilateral Coverage contracts - Energy, Ancillary Services - Capacity - Clean Energy Certificates - Financial Transmission Rights Auction Coverage contracts - Energy - Capacity - Clean Energy Certificates 7

8 Short Term Market

9 SHORT TERM MARKET: GENERAL CHARACTERISTICS Objectives Efficient and reliable dispatch of the National Electric System. Correct signals for the location of new electric plants and the use of controllable demand. Features Two-Settlement (Day Ahead and Real Time). Nodal prices (approximately 2000 nodes). Three part offers. Co-optimization of energy and ancillary services. Economic unit commitment by system operator. Cost based offers and market monitoring. Initial market based on existing CENACE software. 9

10 MAP OF THE SHORT TERM MARKET CFE Generación I CFE Generación II CFE Generación III CFE Generación VI GENERATOR CFE Generación V CFE Generación IV (Administrador de PIEs) CFE Generador de Intermediación Electricidad Águila de Altamira S. de R.L. de C. V. Central Saltillo S. de R.L. de C. V. Lomas de Real S. de R.L. de C. V. Central Valle Hermoso S. de R.L. de C.V.. Central Anáhuac S. de R.L. de C. V. QUALIFIED SUPPLIER 2015 CFE Energía Calificados Buenavista, S. de R. L. de C. V. BASIC SERVICES SUPPLIER CFE Suministro Básico QUALIFIED USER MARKET PARTICIPANT With Contract - In operation With Contract - Operation pending

11 Long-Term Electricity Auctions

12 LONG-TERM ELECTRICITY AUCTIONS 1 ST AUCTION 2 ND AUCTION 1 AUCTION AVERAGE PRICE: USD Companies 18 winning offers from 11 companies participating in 7 Mexican States. Investment 2.6 billion USD (in 3 years) Companies 56 winning offers from 23 companies participating in 8 additional Mexican States. Investment 4 billion USD (in 3 years) Wind 19% Solar 81% Energy 2,085 MW of installed capacity awarded CECs 5.4 million of clean energy certificates awarded Energy 2,871 MW of installed capacity awarded CECs 9.3 million of clean energy certificates awarded per year 2 AUCTION AVERAGE PRICE: 33.7 USD Geothermal 3% Power Not allocated Power 1,187 MW per year Wind 43% Solar 54% MARCH 31 TH,2016 SEPTEMBER 23 TH, RD AUCTION APRIL OPEN FOR PRIVATE BUYERS

13 MAP OF THE LONG TERM AUCTIONS 1st auction= 11 companies 2nd auction= 24 companies

14 THE TWO ELECTRIC AUCTIONS ATTRACTED DIVERSIFIED INTERNATIONAL INVESTMENT Sonora Origin of the Investment Chihuahua Coahuila Approx. 6.6 billion dollars of accumulated investment. Baja California Aguascalientes Baja California sur SOLAR EÓLICA HIDRO solar-eólica Jalisco Guanajuato Morelos Nuevo León Tamaulipas San Luis Potosí Puebla Oaxaca Yucatán 15 states selected for investment in new projects. Investor countries Mexico United States Spain China France Canada United Kingdom Portugal Germany Italy Korea Netherlands

15 MEXICAN AUCTIONS, PRAISED BY OBSERVERS AROUND THE WORLD

16 Capacity Balancing Market

17 DESIGN AND EXECUTION OF CAPACITY BALANCING MARKET Design Execution Power Revenues cover the fixed costs of Power Plants Ensure the installation of sufficient capacity for a reliable supply Market Prices reflect the scarcity (or not) of capacity CENACE published preliminary calculations and held workshops with Market Participants CRE issued no-objection to Reference Generation Technology Results on schedule: February 28 th 2017

18 RESULTS OF THE CAPACITY BALANCING MARKET Results (CENACE) SIN 7.7% 15.3% 13.9% 2,644,707 1,207,324 BC 0% 7.8% 3.5% 2,885,007 2,507,456 BCS 13.8% 32.7% 39.9% 1,910,548 1,240,146

19 Clean Energies

20 Increased 75% Combined Cycle CLEANER ENERGY FOR THE FUTURE Principal Increases in Capacity (MW) 12,489 12,489 Hidroeléctrica Hydro ,976 16, ,805 2,805 Wind Eólica 15,101 15,101 Cogeneración Efficient Cogeneration Eficiente 7,627 7, Solar Solar 56 6,905 6,905 Combined Ciclo Combinado Cycle 24,043 24,043 42,643 42,643 Tripled Clean Energy

21 MEXICO HAS ADOPTED THE GLOBAL BEST PRACTICE OF CLEAN ENERGY CERTIFICATES Mexico s clean energy portfolio standard of 35% in 2024 is among the most ambitious in the world dg

22 Electricity Investment Opportunities

23 EXPECTED INVESTMENTS According to the Program for the Development of the Electricity System , Mexico will need to invest Billion dollars in the next fifteen years. Total Investment (Billion dollars) Generation Transmission Distribution Distribution 13% Transmission 13% Generation 75% 23

24 ELECTRICITY INVESTMENT OPPORTUNITIES POWER GENERATION New infrastructure Additional 57 Gigawatts ( ) 400 new generation plants (63% will use clean energy) Investment: 98 billion USD TRANSMISSION AND DISTRIBUTION Collaboration with CFE in developing transmission and distribution lines 28,500 km of transmission lines Investment: 33 billion USD WHOLESALE ELECTRICITY MARKET MEDIUM AND LONG TERM AUCTIONS Trading of: Energy Power Clean Energy Certificates (CECs) Financial Transmission Rights Investment: 131 billion USD ( )* *Source: National Development Electric System (PRODESEN)

25 THE TRANSMISSION NETWORK WILL BE STRENGHTENED IN THE NEXT FIVE YEARS Tijuana Cucapah Seri Back to Back asynchronous link 150 MW in Nogales, Sonora-Arizona, USA. Border Line. 3rd HVDC Line 2nd semester 2017 Anticipating the new infrastructure required to take advantage of Clean Energy resources Cumbres Baja California-SIN Interconnection. 2nd HVDC Line 1st semester 2017 Reinforcements. 3 SE 2 5 Reinforcements. 6 Cancún-Cozumel. 1 Strengthening the network to interconnect the new power plants Istmo de Tehuantepec - Valle de México. 1st HVDC Line 2nd semester 2016 Angostura-Tapachula. 25

26 Electric Trade between Mexico and US

27 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 Jan-10 Jun-10 Nov-10 Apr-11 Sep-11 Feb-12 Jul-12 Dec-12 May-13 Oct-13 Mar-14 Aug-14 Jan-15 Jun-15 Nov-15 Apr-16 Sep-16 MWh monthly MWh monthly MEXICO-US ELECTRICITY COMMERCE Mexico-US electricity commerce is small. Imports and exports, in total, amount to about 1.33% of the annual generation of the Mexican Electricity System. Depending on the electricity market prices, the annual value of transactions ranges from 100 to 250 MDD per year. 450,000 Electricity Exports (Mexico to US) 450,000 Electricity Imports (US to Mexico) 400, , , , , , , , , , , , , ,000 50,000 50,

28 EXISTING CROSS-BORDER INTERCONNECTIONS Currently, Mexico-USA commerce occurs in two major regions: Baja California / California and Tamaulipas-Coahuila / Texas. 5 interconnections (1086 MW) in permanent operation. 8 interconnections (788 MW) for emergency backup. Tijuana-Miguel (CA) La Rosita- Imperial Valley (CA) 800 MW Cd. Juárez-El Paso (TX) Cd. Juárez-El Paso (TX) 200 MW La Amistad- Amistad Dam (TX) 2 MW Piedras Negras-Eagle Pass (TX). 36 MW. Nuevo Laredo- Laredo (TX), 100 MW. Nuevo Laredo-Laredo (TX), 100 MW Presa Falcón-Falcon (TX), 150 MW Cumbres-Planta Frontera (TX), 100 MW Cumbres-Rail Road (TX), 150 MW Matamoros-Military H. (TX), 190 MW Matamoros-Brownsville (TX), 46 MW Permanent Operation Emergency Only In the last 12 months reported (to October 2016), the electricity trade balance was a slight deficit: Mexico exported 1,712,947 MWh and imported 2,304,229 MWh on these interconnections. 28

29 NEW INTERNATIONAL ELECTRIC INTERCONNECTION Sonora is the only border state that does not have an international electric interconnection; V. 150 MW back-to-back asynchronous link in Nogales, Sonora-Arizona, USA. (June 2019) PRODESEN 2016 contemplates the realization of a 150 MW BtB asynchronous link project between Nogales and Arizona; Its goal is to support the operational reliability of the entity and establish the necessary infrastructure to deepen the integration of the SEN with North America. Currently, the Letter of Understanding has been signed between CENACE and Tucson 29 Electric Power and it

30 BORDER STATE SUPPORT IN EMERGENCIES: TEXAS On February 2, 2011, a large snowfall caused blackouts throughout the state of Texas, affecting mainly hospitals. CFE Immediately supplied about 300 MW for 10 hours via the Sharyland Utilities Interconnection. Supply was made under a Master Purchase Agreement between ERCOT and CFE. Mexico's timely aid came at a critical time in the US state's energy shortage. Sources:

31 Universal Electric Service Fund (FSUE)

32 FSUE STRATEGY: APPROPRIATE TECHNICAL SOLUTIONS Type of Project Distance to Network Estimated Population Percentage Instrument Expansion of the RGD Distance to the Distribution Network Up to 1 km > 1 km up to 3 km Minimum number of homes DNA 7 1,350,000 75% Invitation by CFE > 3 km up to 5 km 12 Isolated systems* Others 450,000 25% Call for Qualified Developers * Initially photovoltaic panels will be financed to electrify homes and eventually photovoltaic panels with Micro networks and other technological solutions will be used.

33 Next Steps

34 NEXT STEPS (2017) Date Milestone Area 1st quarter 2017 Legacy Contracts for Basic Supplier CFE Jan-Mar 2017 FSUE Network and Isolated Extension Social Feb 2017 Capacity Balancing Market Testing and operation Mar 2017 Clean Energy Requirement Planning Mar 2017 Bid Bases for HVDC Line Oaxaca Network Abr rd Long Term Auction for Capacity, Clean Energy and CECs Market May rd PRODESEN Planning 4th quarter 2017 Medium Term Auctions for Capacity and Energy Market 4th quarter 2017 Transmission Financial Rights Auctions Market

35 Thank