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Argentine Power Sector

Wholesale Electric Market Management Company. Argentine Power Sector. Update APEX 2000 Conference. CAMMESA. Outline. Basic rules, global figures Changes in the demand Changes in the supply Impact of these changes in the market and the operation Rules – more significant changes

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Argentine Power Sector

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  1. Wholesale Electric Market Management Company Argentine Power Sector Update APEX 2000 Conference CAMMESA

  2. Outline • Basic rules, global figures • Changes in the demand • Changes in the supply • Impact of these changes in the market and the operation • Rules – more significant changes • Future changes • Conclusion - Trends

  3. Wholesale Electric Market - 1999 Installed Capacity 20.372 MW Generation 71.818 GWh 500 kV 7.920 km 330 kV 1.111 km 220 kV 1.232 km 132 kV 6.484 km NOA NEA CUYO LITORAL CENTRO GBA WEM Installed Capacity 19.513 MW Demand 68.757 GWh Peak Generation 12.730 MW WEM PS Installed Capacity 842 MW Demand 3.209 GWh Peak Generation 534 MW BUENOS AIRES COMAHUE PATAGONICO

  4. Outstanding Variables

  5. Outstanding Variables

  6. SUPPLY INDEPENDENT GENERATORS GENERATORS NAT. & PROV. ADMINISTRATION BINATIONAL COMPANIES INTERNATIONAL INTERCONNECTIONS (imports) Basic Market Operating Rules Transmission DEMAND Contracts Market DISTRIBUTORS LARGE USERS WEM SPOT Market INTERNATIONAL INTERCONNECTIONS (exports)

  7. SPOT MARKET : SHORT-TERM MARGINAL-COST BASED SEASONAL DECLARATION OF GENERATOR’S COSTS STABILIZED SEASONAL PRICES FOR DISTRIBUTORS HOURLY PRICES IN SPOT MARKET ADDITIONAL PAYMENT FOR CAPACITY (10 $/Mwh; 90 hours per week) OPEN ACCESS TO THE TRANSMISSION GRID HOURLY NODAL PRICES AND LOCAL PRICES DUE TO TRANSMISSION CONSTRAINTS FOR EACH NODE OF THE EHV GRID REMUNERATION FOR ANCILLIARY SERVICES Basic Market Operating Rules

  8. Changes - Demand and supply • Changes in the demand => incorporation of a new 1000 MW (about 15 % of local demand) interconnection with Brazil, mainly to export when Brazil is short of hydroelectric availability. Projects for another 100 MW in 2001 and 2003. • Changes in the supply => incorporation of high technology generation equipment, basically large combined cycle plants (800 MW), replacing less efficient steam turbine plants.

  9. Changes - Demand and supply • Impact of these changes in the market and the operation => • Highly variable demand of Brazil increases energy prices volatility, augmented in winter due to the rise of oil prices. The interconnection enables to share short term and instantaneous reserves (Brazil’s system is five times Argentina’s one in size) • New generation plants are very efficient (gain of about 30%). On the other hand, they are very large in relation with the demand (about 10%), which requires the adaptation of reserves according to their reliability. The risk of Underfrequency Load Shedding (UFLS) due to Combined Cycle (CC) trips may affect quality standards.

  10. Rules – more significant changes • A new market has been created to remunerate certain demands offering the anticipation of underfrequency load shedding (exports to Brazil, electro-intensive industries) to reduce the action of the UFLS scheme of the rest of the demands. This system mainly profits out from the availability of the interconnection with Brazil to reduce the risk of local UFLS occurrence, particularly due to CC trips.

  11. Instantaneous Reserve

  12. Future Changes - Rules • More flexible price declarations (from the present six months in advance to one week in advance), allowing to declare different blocks for the same unit and in different hours • Capacity payments not depending on the actual dispatch (like now), but on an average weekly dispatch. Charges in case declared weekly availability is not reached. • Thermal reserve payments for the dry hydrological year assigned on a competitive basis and similar charges criteria.

  13. Conclusion - Trends - Challenges • For the year 2002, another 1000 MW exports to Brazil will deepen the impact, increasing volatility and enabling to share reserves in critical times. • Since its beginning, the WEM in Argentina has been characterised by a very strong and competitive market in the generation sector, which has led to excellent results allowing not only to cover the local demand but also to export a significant amount of energy (up to 3000 MW in the next years). Average prices rounded from 2 to 3 cents/kWh. Strong signals through nodal prices at each node of the EHV grid are given. No significant stress due to sustained high prices occurred and demand has been satisfied virtually without problems. Last year’s liberation for 30 kW consumers, anyway, didn’t have a major impact.

  14. Conclusion - Trends - Challenges • Proposed rule changes are oriented to increase competition in the WEM, gradually tending to a commodity market. The changes in the interconnected system will lead to adjustments in rule modifications to adapt them to the future. CAMMESA, as administrator of the market, must be flexible enough to adapt efficiently to rapid changes.

  15. Quality, Technology & Transparency For an Electrical Market without frontiers ¡Thanks for your attention!Canada - November 2000

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