Comisión Nacional de Energía Eléctrica. President. Carlos Eduardo Colom Bickford. Director. Enrique Moller Hernández. Director

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2 Comisión Nacional de Energía Eléctrica President Carlos Eduardo Colom Bickford Director Enrique Moller Hernández Director César Augusto Fernández Fernández General Manager Sergio Oswaldo Velásquez Moreno Developed by: Strategic Projects Division Strategic Projects Division Chief José Rafael Argueta Monterroso Project Planning Department Chief Fernando Alfredo Moscoso Lira

3 Work Team Edwin Roberto Castro Hurtarte Gustavo Adolfo Ruano Martínez Juan Carlos Morataya Ramos Alejandra Patricia Maldonado Castellanos Luis Fernando Rodríguez Santizo INDEX Index...3 Figures & tables index...5 Executive summary...8 Introduction...10 Goals...11 Chapter 1 National electric subsector...12 National electric market...12 Legal structure...14 National electric market structure...15 Steady demand & efficient steady supply...17 Current transmission system...19

4 Expansion plan of the transmission system Indicators of national power grid...25 Electricity distribution system...27 Energy & power...29 Demand marginal cost to short-term (spot price)...31 Gross domestic product (GDP)...32 Load curve...34 Chapter 2 Study premises...35 Demand...35 Fuels...37 New generating plants...38 Simulated cases...39 Hydrology...39 Chapter 3 Study results...41 Case Case Case Case Case Nodal Losses...68 Conclusions...73 Bibliography...75 Anex A...76 Acronyms...76 Measuring units...77 Multiples...77 Anex B References...77

5 FIGURES & TABLES INDEX Figures Figure 1-1 Electric sub-sector structure...1 Figure 1-2 Steady demand...17 Figure 1-3 Efficient steady supply by fuel type...18 Figure 1-4 Ownership of the transmission lines of 230kv and 69kv, respectively...20 Figure 1-5 Ownership of the transmission lines of 230kv, Figure 1-6 Current transmission system, Figure 1-7 Expansion plan of the transmission system, Figure 1-8 Renewable energy generation (gwh) years 2009, 2008 and 2007, respectively...25 Figure 1-9 Non-renewable energy generation (gwh) years 2009, 2008 and 2007, respectively...26

6 Figure 1-10 Percentage of energy consumption by participant...28 Figure 1-11 Historic of energy consumed by distribution companies Figure 1-12 Historic of steady demand by distribution companies Figure 1-13 SPOT behavior Figure 1-14 Variation of energy demand vs. gdp Figure 1-15 Variation of power demand vs. gdp Figure 1-16 Hourly load curve, period Figure 1-17 Hourly load curve, period Figure 2-1 Energy and power demand scenarios...36 Figure 2-2 Projection of fuels during the period Figure 3-1 Energy matrix, 2010 and 2015, case Figure 3-2 Energy dispatch, case Figure 3-3 Available power-demand, case Figure 3-4 Demand marginal cost, case Figure 3-5 Energy matrix, 2010 and 2015, case Figure 3-6 Energy dispatch, case Figure 3-7 Available power-demand, case Figure 3-8 Demand marginal cost, case Figure 3-9 Energy matrix, 2010 and 2015, case Figure 3-10 Energy dispatch, case Figure 3-11 Available power-demand, case Figure 3-12 Demand marginal cost, case Figure 3-13 Energy matrix, 2010 and 2015, case Figure 3-14 Energy dispatch, case Figure 3-15 Available power-demand, case Figure 3-16 Demand marginal cost, case Figure 3-17 Energy matrix, 2010 and 2015, case Figure 3-18 Energy dispatch, case Figure 3-19 Available power-demand, case Figure 3-20 Demand marginal cost, case Figure 3-21 Nodal losses factor, load nodes 69kv...69 Figure 3-22 Nodal losses factor, load nodes 69kv...69 Figure 3-23 Nodal losses factor, new pet nodes 230kv...70 Figure 3-24 Nodal losses factor, new pet nodes 230kv...70 Figure 3-25 Nodal losses factor, existing nodes 230kv...71 Figure 3-26 Nodal losses factor, existing nodes 230kv...71 Tables Table 1-1 Steady demand period Table 1-2 Efficient steady supply period Table 1-3 Length (km) of lines of sin by voltage level...20 Table 1-4 Length (km) of lines of sin by transmission company...20 Table 1-5 Length (km) of transmission lines of pet by lot...21 Table 1-6 National power grid indicators during Table 1-7 Distributing companies & region...27

7 Table 1-8 Energy consumption by participant...28 Tabla 2-1 GDP growth rates (%) according to scenario demand...35 Table 2-2 Demand scenarios Table 2-3 Initial price of fuels...37 Table 2-4 New power plants...38

8 EXECUTIVE SUMMARY This document s goal is point the prospects of the electricity supply of the National Electric System and identify the likely scenarios of its behavior in the medium term ( ). For this study we have established the followings scenarios: demand (medium and high) and the fuel price trend (high and reference). We simulated the start-up of the following hydroelectric power stations: Xacbal (07/2010), Santa Teresa (08/2010), El Manantial (06/2011), El Cóbano (12/2011), Palo Viejo (06/2012) and San Cristóbal (06/2013); the geothermal power stations: Duke Phase 1 (06/2010), Duke Phase 2 (01/2011), Esi (11/2012) and Jaguar (05/2013); and Guatemala- México 80 MW Interconnection (08/2013) (increase to the capacity already in operation of 120 MW). The following table shows the scenarios combination, which were simulated with the model of economic dispatch in the period ( ). Case Type of Demand Fuel Trend Plants 1 Medium Reference Table Medium High Table High Referencie Table High High Table Medium Referencie The fifth case determinate the generation technology type that delete the volatility of demand marginal cost in the transition of dry season to wet season and that demand marginal cost decreases after year The following table shows a summary of the results, indicating the percentage of generation by fuel type for year 2010 and 2015, generation with bunker year 2015, the average of demand marginal cost and the probable deficit in the study period. We can observe the increase produced in generation with base fuel due to the start-up of the geothermal power station Jaguar, and the start-up of the hydroelectric power stations Xacbal, San Cristobal, Santa Teresa, El Manantial, El Cóbano and Palo Viejo, which reduces in a significant percentage generation with bunker.

9 Results table, summary Case Type of Demand Fuel Trend Coal Bunker Hydro 2010 (%) 2015 (%) 2010 (%) 2015 (%) 2010 (%) 2015 (%) Generation whit Bunker year 2015 (GWh) Average Demand Marginal Cost (US$/MWh) Probable Deficit (MWh) 1 Medium Reference Medium High High Reference High High Medium Reference

10 INTRODUCTION The Strategic Projects Division as part of National Electric Energy Commission presents it s Medium-term prospects ( ) for electricity supply of the National Electric System, which considered the generating plants in commercial operation until date, also including new generating projects that are close to startup, including the interconnection with Mexico (which increases its existing capacity of 120MW to 200MW); hydroelectric power stations: Xacbal, San Cristobal, Santa Teresa, El Manantial, El Cóbano and Palo Viejo; and geothermal power stations: Jaguar, Esi and Duke. In this technical study is evaluated the energy dispatch, the available power of generating plants, the demand marginal cost and the energy matrix for a period of five years taking into consideration the electricity demand, hydrology and trend of fuel costs. For this purpose were performed two demand scenarios and two fuel trend scenarios. The activities developed in the study s preparation included the following activities: a) Prepare the demand growth projection for the period in two representative scenarios. b) Identification of two scenarios for fuel prices according to the projections made by the U.S. Energy Information Administration, EIA. c) Prepare the list of generating projects under construction which have a certainty of the start-up date.

11 d) Determination of the simulation premises for different scenarios of fuel prices and demand growth. e) Simulation of the energy dispatch of the generating plants considered in the study, starting operation in the specified time. GOALS 1. Determine the prospects for electricity supply of National Electric System identifying the likely scenarios for his behavior in the medium term ( ). 2. Estimate the demand marginal cost to short-term (Spot price) in the National Power Grid considering the start-up of new generating plants in addition to existing generation facilities. 3. Determine that the start-up of new generating plants to the National Power Grid will increase the reliability and will improve the quality of the electricity supply. 4. Set up technology of generating that eliminates the volatility of demand marginal cost, in the period of transition from dry season to wet season, and reduce the demand marginal cost after 2015.

12 5. Provide a technical-economic guide to the investor, national and foreign, to report about the growth prospects of the electric sub-sector to facilitate their decisions. 6. Estimate the Factors of nodal losses in the National Power Grid, considering the building facilities in the Expansion Plan of the Transmission System CAPÍTULO 1 NATIONAL ELECTRIC SUBSECTOR NATIONAL ELECTRIC MARKET The regulatory structure in which is supports the Guatemalan electric sub-sector is based on a competitive market allowing the access to the National Power Grid to any individual or legal person who wants it, fulfilling the legal requirements established by the General Law of Electricity and its Regulations, thereby setting a balanced system of supply and demand prices, creating the conditions for competition. Prices are set by the regulator when there is existence of natural monopolies. In the Guatemalan electric sub-sector are five participants: Generating,

13 Transmission and Distributing Companies; Power Marketers and Large power users; Article 6 of the General Law of Electricity provides definitions for each one of them being these: a) Generating Company: An individual or legal person who owns or is in possession of a power generating station and who sells commercially all or part of its output. b) Transmission Company: An individual or legal person owning a facility for electricity transmission and transformation. c) Distributing Company: An individual or legal person who owns or is in possession of facilities intended for the commercial distribution of electricity. d) Power Marketer: An individual or legal person whose activities are related to the purchase and sale of blocks of power, without itself being engaged in power generation, transmission, distribution, or consumption. e) Large power user: A customer whose power demand exceeds the ceiling specified for such purpose in regulations under this law (100kW maximum demand).

14 The generation activity takes place in a free and competitive context, composed for an opportunity market or short-term market that is based on the energy dispatch at marginal cost and a term market or long-term market where the terms are freely agreed as regards the period, the price and the amount of power and energy to hire. The transmission and distribution activities are regulated by standards issued by the regulator system, in this case the National Electric Energy Commission. The Wholesale Market Administrator is a private nonprofit entity that coordinates transactions among the participants of the Wholesale Market, to ensure a free market competition, with clear rules and to encourage electric system investments, as well as watch over to keep quality of the electricity supply service in Guatemala. LEGAL STRUCTURE The legal structure which governs the electric sub-sector is based on the following: I. General Law of Electricity, Decree No II. Regulation of the General Law of Electricity, Government Agreement No and its reforms III. Wholesale Market Administrator, Government Agreement No and its reforms IV. Technical Standards issued by the National Electric Energy Commission V. Commercial and Operative Coordination Standards of the Wholesale Market Administrator The General Law of Electricity is the base for electricity issues and it is supported on the following principles:

15 I. The existence of an unrestricted market for electricity generation, with no requirement of prior State authorization or condition other than the ones provided in the Constitution and laws of Guatemala. However, the use of the State s property for these purposes will require proper authorization by the Ministry when the central s power exceeds 5MW. II. The existence of an unrestricted market for the transmission of electricity, as long as there is no public property to be used for it, and likewise, there exists a free market for private electricity distribution service. III. Authorization is required for power transmission where public property is required to be used, and for distribution of power to the final customer. IV. Electric service rates may be freely set, except for transmission and distribution service rates for which an authorization is required. Wholesale power transfers between generating companies, power marketers, importers and exporters shall be regulated as provided in this law. NATIONAL ELECTRIC MARKET STRUCTURE The Guatemalan electric sub-sector is structured on the following way:

16 Figure 1-1 Electric Sub-Sector Structure Ministry of Energy and Mines MEM : It is the body of the State responsible of the formulation and coordination of policies, State plans, indicative programs related to the electric sub-sector. In charge of reviewing that the authorization process of generating plants installation and that provision service of transportation and distribution, is according to law. Likewise, it is in charge of all juridical regime issues applicable to generation, transmission, distribution and commercialization of electricity, hydrocarbons and mining resources exploitation. National Electric Energy Commission CNEE : It is the regulator of the electric sub-sector responsible of reviewing the fulfillment of the General Law of Electricity and its Regulations with planning functions; bidding new generation and expanding the Transmission System to satisfy National Power Grid needs. It creates conditions according to the Law, for any individual or legal person that could develop the activities of generation, transmission, distribution or commercialization; strengthening those activities with the emission of technical standards and disciplinary actions, as well as defining the tariffs and calculation methodology. Generating Co. Transmission Co. Power Marketers Large Power Users Distributing Co. Wholesale Market Administrator AMM : Private entity responsible of dispatching and programming the operation and coordination of the National Power Grid, "SNI" (by its Spanish acronym), within the quality requirements of service and security, also the post-dispatch and the administration of commercial transactions of the Wholesale Market. Its aim is to guarantee the proper functioning of the SNI and the interconnections.

17 STEADY DEMAND & EFFICIENT STEADY SUPPLY The Steady Demand 1 for is shown below: Table 1-1 Steady Demand period i Steady Demand Participants MW % EEM % Large Power Users % Distributing Companies % Total % Figure 1-2 Steady Demand Source: AMM, Steady Demand Steady Demand: This is the power demand calculated by the Wholesale Market Administrator (AMM), that has to be contracted by each Distributor or Major User.

18 We describe below the Efficient Steady Supply 2 by fuel type for the period : Table 1-2 Efficient Steady Supply Period ii Efficient Steady Supply Fuel type MW % Geothermal % Coal % Sugar Mills (bunker) % Diesel % Biomass % Hydro % Bunker % Total % Figure 1-3 Efficient Steady Supply by fuel type 2 Efficient Steady Supply: This is the maximum power amount that a power station can compromise in contracts to fulfill the Steady Demand calculated based on its maximum power, its availability and the efficiency of the power station.

19 Source: AMM, Efficient Steady Supply CURRENT TRANSMISSION SYSTEM The transmission system in Guatemala has an infrastructure that allows the electricity supply from the principal generating plants to the consumption centers, as shown in the table below through a network of 1063 Km approximately, in voltages of 138 kv and 230 kv, and a transformation capacity of 1445 MVA in 230 kv and 319 MVA in 138 kv. For 69 kv of voltage are around of 2687 Km of transmission lines that allows to supply Distribution System s and Large power users, the transformation capacity amounts to 760 MVA. In Guatemala, there are four companies that provide electric power transportation service, being those with the highest number of km owned the Empresa de Transporte y Control de Energía Eléctrica of the Instituo Nacional de Electrificación ETCEE (by its Spanish acronym) and Transportista Eléctrica Centroamericana S.A. TRELEC (by its Spanish acronym). However, the

20 transmission system also includes transmission lines owned to Wholesale Market Agents, whose aim is the connection to the National Power Grid. Table 1-3 Length (Km) of lines of SIN by voltage level iii Voltage (kv) Length (Km) Total 3750 Table 1-4 Length (Km) of lines of SIN by Transmission Company iv Transmission Company Length (Km) by voltage level 230 kv 138 kv 69 kv Total Empresa de Transporte y Control de Energía Eléctrica Redes Eléctricas de Centroamérica, S.A Duke Energy Intenational Transmision Guatemala, Ltda Transportista Eléctrica Centroamericana, S.A Total The figure below shows the ownership of the transmission lines for 230kV y 69kV in percentage; the 100% of the 138kV transmission lines are property of ETCEE. Figure 1-4 Ownership of the transmission lines of 230kV and 69kV, respectively

21 EXPANSION PLAN OF THE TRANSMISSION SYSTEM The Expansion plan of the Transmission System PET (by its Spanish acronym) was based on satisfy the SNI needs regarding electricity transmission. We identified the critical points in the system and raised new projects of transmission lines, substations and their respective equipment. The works comprising the PET are arranged in five loops Metropacific, Hydraulic, Atlantic, Eastern and Western. These loops are comprised of six lots as shown in the table below: Table 1-5 Length (Km) of transmission lines of PET by lot v Length (Km) Lot 230kV A 91 B 211 C 102 D 186 E 115 F 140 Total 845 On January 20, 2010, the Ministry of Energy and Mines (MEM) issued a resolution which approves and awards the electricity service provision through the adjudication of the value of the annual canon to the Consortium EEG-EDM Guatemala Project. Finally, on February 22, 2010, the authorization contract for the execution transmission works of the lots A, B, C, D, E and F is signed; with 845 Km of transmission lines approximately, awarded as a result of the International Open Tender process for the provision of electricity transmission service through the adjudication of the value of the annual canon to the company Transportadora de Energía de Centroamérica, Sociedad Anónima TRECSA (by its Spanish acronym) constituted in Guatemala by the Consortium EEG-EDM Guatemala Project.

22 Whit the PET culmination, 2013, the SNI will have an approximate of 1611 Km of 230kV transmission lines, of which 52.45% will belong to TRECSA. The following figure shows the ownership of the transmission lines of 230kV once concluded the PET. Figure 1-5 Ownership of the transmission lines of 230kV, 2013

23 Figure 1-6 Current Transmission System, 2009

24 Figure 1-7 Expansion Plan of the Transmission System,

25 INDICATORS OF NATIONAL POWER GRID For the period from January 1 to December 31, 2009, the total of energy generation was 8, GWh, of which 99.5% were generated locally, and 0.5% were imported from the Regional Electricity Market MER (by its Spanish acronym). The energy exported to the MER was GWh, being this the 1.17% of the total generation of the country, reaching a 22% of participation on the energy injections into the MER. The internal consumption of energy reached 7, GWh including: own consumption of units, of generating plants and equipment of electricity transmission. The average of the opportunity price was US$/MWh, showing a decrease of 16.69% over the previous year. The maximum power demand occurred on December 15, 2009 reaching 1, MW. The load factor calculated for the system was 61.41%. Table 1-6 National Power Grid indicators during 2009 vi National Power Grid indicators, 2009 Local Generation GWh Internal Consumption GWh Exports GWh Imports GWh SPOT Price (Average) US$/MWh Maximum Demand MW Load Factor % Source: AMM, 2009 Statistical Report Figure 1-8 Renewable Energy Generation (GWh) years 2009, 2008 and 2007, respectively vii

26 Figure 1-9 Non-Renewable Energy Generation (GWh) years 2009, 2008 and 2007, respectively

27 ELECTRICITY DISTRIBUTION SYSTEM The distribution system of Guatemala consists of lines, substations and distribution networks operating at medium voltage. In Guatemala, there are three main companies that offer the service of electricity distribution, as well as municipal enterprises, in the following table we indicate these companies and the region in which they serve. Table 1-7 Distributing Companies & Region Distributing Company Empresa Eléctrica de Guatemala, S.A. (EEGSA) Distribuidora de Electricidad de Occidente, S.A. (DEOCSA) Distribuidora de Electricidad de Oriente, S.A. (DEORSA) Empresas Eléctricas Municipales Region Central area (Guatemala, Escuintla, Sacatepéquez) North-South-West area North-South-East area

28 Of 8, GWh that were obtained of the total generation 2009, 67.7% was consumed by distribution companies, being 35.7% consumed by EEGSA, 10.9% by DEORSA, 14.9% by DEOCSA and 6.2% by Municipal Electric Companies. The country's energy consumption is presented in the table below: Table 1-8 Energy Consumption by Participant Participants GWh Power Marketers EEGSA DEORSA DEOCSA Empresas Eléctricas Municipales Own Consumption Large Power Users Losses Exports Total Source: AMM, 2009 Statistical Report Figure 1-10 Percentage of Energy consumption by Participant

29 ENERGY & POWER The energy consumed by distributors has changed since the beginning of the market, from to 1,195.3 GWh for DEOCSA, from to GWh for DEORSA and from 2,918.2 to 2,863.7 GWh for EEGSA; being the 39.41% and 39.05% for DEOCSA and DEORSA respectively, and % for EEGSA of the 2009 s energy. In general, the Energy consumption by distribution companies ranged from 3,760.5 to 4, GWh from 1997 to 2009, increasing 24.37%. The steady demand of distribution companies has changed since 2002 to 2010, from 217 to 316 MW for DEOCSA, from 148 to 216 MW for DEORSA and from 551to 594 MW for EEGSA; representing a growth of 31.33%, 31.48% and 7.24% for DEOCSA, DEORSA and EEGSA respectively, taking the 2009 as base year.

30 In general, the power consumption by them ranged from 916 to 1,126 MW in the period , increasing 18.65% Figure 1-11 Historic of Energy consumed by distribution companies Figure 1-12 Historic of steady demand by distribution companies

31 DEMAND MARGINAL COST TO SHORT-TERM (SPOT PRICE) The behavior of marginal cost for the demand to short-term in the last twelve years is shown in the figure below: Figure 1-13 SPOT behavior

32 GROSS DOMESTIC PRODUCT (GDP) The figures 1-13 and 1-14 show the relationship between energy demand variation and power demand variation (over the previous year) against GDP growth, both for the period Figure 1-14 Variation of energy demand vs. GDP viii

33 Figure 1-15 Variation of power demand vs. GDP

34 LOAD CURVE In the following figures you can appreciate the variation of the hourly load curve for the period Figure 1-16 Hourly load curve, period Figure 1-17 Hourly load curve, period

35 CAPÍTULO 2 STUDY PREMISES To prepare this study, the National Commission of Electric Power took into consideration the following conditions: DEMAND The development of two scenarios for electricity demand growth is modeling by an econometric model which takes into account GDP and the number of electric power users as independent variables. Such model assumes a logistic relationship between energy demand and GDP, and a linear-exponential relationship between energy demand and the number of users. The following table shows the GDP data used to determinate de growth demand scenarios: Tabla 2-1 GDP growth rates (%) according to scenario demand Year Medium High

36 Source: Own elaboration, based in national and international publications of financial entities. The projections for energy and power demand growth for the study period are shown in the table below, for each were identified two scenarios. Table 2-2 Demand scenarios Year Energy demand (GWh) Power Demand (MW) Scenario 1 (Medium) Scenario 2 (High) Scenario 1(Medium) Scenario 2 (High) , , , , , , , , , , , , , , , , , , , , , , , , Figure 2-1 Energy and power demand scenarios

37 FUELS The initial values for fuel prices are shown in table 2-3. The cost s forecast was made from initial values, applying the tendency variation of the price of each fuel estimated by the Energy Information Administration (EIA) for carbon, bunker and diesel. Table 2-3 Initial Price of fuels Fuel type Price (US$ per MWh) Coal Bunker Diesel Bagasse Geothermal 1.00 Figure 2-2 Projection of fuels during the period ix

38 Source: EIA (Coal, Report # :DOE/EIA-0383(2010); Liquid fuels, Report # :DOE/EIA-0484(2009)) NEW GENERATING PLANTS The Guatemala-Mexico Interconnection (400kV) was considered with an initial capacity of 120MW and at the end of the construction of PET works of 200MW, and was estimated that its variable cost is less than cost of internal combustion engines based on bunker, but higher than cost of base fuel plants (coal). The parameters used to model the hydroelectric power stations: Xacbal, San Cristobal, Santa Teresa, El Manantial, El Cóbano and Palo Viejo, and the geothermal power stations: Duke, Esi and Jaguar were obtained from access studies to transmission system, information submitted by developers projects and the respective resolutions of approval. Table 2-4 New power plants Start-up Project Power (MW) Jun-10 Duke fase 1 40

39 Jul-10 Hydroelectric Xacbal 94 Ago-10 Hydroelectric Santa Teresa 19.6 Jan-11 Duke fase 2 40 Jun-11 Hydroelectric El Manantial 35 Dec-11 Hydroelectric El Cóbano 7 Jun-12 Hydroelectric Palo Viejo 80 Nov-12 Esi 80 May-13 Jaguar 275 Jun-13 Hydroelectric San Cristóbal 10 Ago-13 Mexico Interconnection 80 3 Total SIMULATED CASES To simulate the cases, was taken into account different scenarios of demand, hydrology and fuels prices trends, likewise was taken into account the start-up operation of the new projects. i. For cases 1 and 2 is considered medium demand and a combination of fuel price scenarios (reference and high), taking the 2003 as hydrology base year, as well the start-up of the plants listed in the table above. ii. For cases 3 and 4 is considered high demand and a combination of fuel price scenarios (reference and high), taking the 2003 as hydrology base year, as well the start-up of the plants listed in the table above. HYDROLOGY 3 The Guatemala Mexico interconnection capacity represents an increase from 120 MW available to 200 MW.

40 The information of flows for the study development were obtained from the data base that National Electric Power Commission used to carry out the Indicative Expansion Plan of the Generation System , and it was complemented with additional information provided by the National Institute of Electrification and the Wholesale Market Administrator. The hydroelectric power stations Xacbal and Palo Viejo were modeled as daily regulation centrals because it had technical data to model it this way and hydroelectric power stations San Cristobal, Santa Teresa, El Manantial and El Cobano were modeled as passing centrals. For the development of the different scenarios was considered the 2003 as a basis for hydrological simulation.

41 CAPÍTULO 3 STUDY RESULTS

42 CASE 1 DEMAND TYPE FUEL TREND Medium Reference By May 2013 when the coal plant Jaguar start-up is estimated that coal generation will increase from 16.3% in 2010 to 40.8% in 2015, because of this, generation with bunker is reduced from 14.8% to 0.6%. It is estimated that the energy dispatch of bunker will be approximately GWh in The average of demand marginal cost in these conditions will be approximately $ per MWh. In these circumstances the probable deficit is zero.

43 Figure 3-1 Energy matrix, 2010 and 2015, case 1 Figure 3-2 Energy dispatch, case 1

44 Figure 3-3 Available power-demand, case 1

45

46 Figure 3-4 Demand marginal cost, case 1

47 CASE 2

48 DEMAND TYPE FUEL TREND Medium High By May 2013 when the coal plant Jaguar start-up is estimated that coal generation will increase from 16.2% in 2010 to 41.0% in 2015, because of this, generation with bunker is reduced from 14.8% to 0.6%. It is estimated that the energy dispatch of bunker will be approximately GWh in The average of demand marginal cost in these conditions will be approximately $ per MWh. In these circumstances the probable deficit is zero. Figure 3-5 Energy Matrix, 2010 and 2015, case 2

49 Figure 3-6 Energy dispatch, case 2

50 Figure 3-7 Available power-demand, case 2

51

52 Figure 3-8 Demand marginal cost, case 2

53

54 CASE 3 DEMAND TYPE FUEL TREND High Reference By May 2013 when the coal plant Jaguar start-up is estimated that coal generation will increase from 15.9% in 2010 to 41.0% in 2015, because of this, generation with bunker is reduced from 17.0% to 1.3%. It is estimated that the energy dispatch of bunker will be approximately GWh in The average of demand marginal cost in these conditions will be approximately $ per MWh. In these circumstances the probable deficit is zero. Figure 3-9 Energy Matrix, 2010 and 2015, case 3

55 Figure 3-10 Energy dispatch, case 3

56 Figure 3-11 Available power-demand, case 3

57 Figure 3-12 Demand marginal cost, case 3

58 CASE 4

59 DEMAND TYPE FUEL TREND High High By May 2013 when the coal plant Jaguar start-up is estimated that coal generation will increase from 15.9% in 2010 to 40.8% in 2015, because of this, generation with bunker is reduced from 17.0% to 1.2%. It is estimated that the energy dispatch of bunker will be approximately GWh in The average of demand marginal cost in these conditions will be approximately $ per MWh. In these circumstances the probable deficit is zero. Figure 3-13 Energy Matrix, 2010 and 2015, case 4

60 Figure 3-14 Energy dispatch, case 4

61 Figure 3-15 Available power-demand, case 4

62 Figure 3-16 Demand marginal cost, case 4

63 CASE 5 DEMAND TYPE FUEL TREND Medium Reference This case considers the start-up of a 50MW geothermal power station from April 2014, further considered the start-up of a block of 50 MW of renewable distributed generation in blocks of 20MW by April 2013, 20MW by April 2014 and 10MW by April These power generation plants based on renewable resources eliminate the price volatility in the transition (May and June) of dry season to wet season. Figure 3-17 Energy Matrix, 2010 and 2015, case 5

64 Figure 3-18 Energy dispatch, case 5

65 Figure 3-19 Available power-demand, case 5

66 Figure 3-20 Demand marginal cost, case 5

67

68 NODAL LOSSES In the Guatemalan Electricity Market, the procedure to model and determine the economic value of losses in the transmission system is through the establishment of a losses factor in every single node of the National Interconnected System, whereby the electric power is valued in each network connection respect to a reference node. The value of the energy transferred to one node will be the energy price in the market affected by the nodal losses factor. The nodal losses factor of energy according to Commercial Coordination Standard # 7, is set with a reference node (Guatemala-Sur-230kV) as the relationship between marginal cost of both nodes, when in that node the marginal cost incorporates transmissions marginal losses to the reference node. In this study we determined the approximate nodal losses factors for case 1, in which new generation plants are expected to be installed in the future or in the nodes that represent a very important role in the National Interconnected System. The calculation in this analysis considers the works of the Expansion Plan of the Transmission System in commercial operation, so these factors can t be considered definitive because the values in addition to the topology of the network depend on the seasonality, daily economic dispatch of load and demand in the SNI. The nodal losses factors of the existing load bars 69kV tend to get better this means a drastic reduction of network losses, resulting in a benefit for users of electrical service. The nodal losses factors of the nodes considered in of the Expansion Plan of the Transmission System tend to vary in values close to one, due to the seasonality between wet and dry seasons, which could result in a benefit for the centrals that will be connected in the future. The nodal losses factors of the existing load bars 230kV tend to get better this means a drastic reduction of network losses, resulting also in a benefit for users of electrical service.

69 Figure 3-21 Nodal losses factor, load nodes 69kV Figure 3-22 Nodal losses factor, load nodes 69kV

70 Figure 3-23 Nodal losses factor, new PET nodes 230kV Figure 3-24 Nodal losses factor, new PET nodes 230kV

71 Figure 3-25 Nodal losses factor, existing nodes 230kV Figure 3-26 Nodal losses factor, existing nodes 230kV

72

73 CONCLUSIONS I. The growth rate of energy and power demand shows a direct relationship to the national Gross Domestic Product, from 2009 we can note a recovery, however natural phenomena may affect recovery. II. On average, there is an increase from 16% to 41%, from 2010 to 2015 in generation with base fuel. The start-up of Jaguar in May 2013 significantly reduced the generation with bunker, this decrease will depend on demand conditions, hydrology and fuel costs. III. To ensure safety and reliability of electricity supply is necessary that new generation plants considered in this study provide the energy needed to satisfy demand at minimum cost. IV. The demand marginal cost (SPOT price) tends to decrease from the start-up of hydroelectric power stations and base fuel plants, from 2015 is being necessary the start-up of new generation plants to stabilize in the long-term the trend of marginal cost. Due to this reduction in SPOT price is necessary that generation plants have contracts that guarantee their investment return. V. In order to eliminate volatility of SPOT price in the transition from dry to wet season and to assure greater stability of that price after 2015 is convenient encourage the start-up of distributed renewable generation and a geothermal plant. VI. In all cases we notice that renewable energy generation is over 50%.

74 Year Case 1 Case 2 Case 3 Case (%) (%) VII. Most of the nodal losses factors on the existing nodes of 69kV and 230kV tend to get better, resulting into a benefit for users of electrical service because a drastic reduction of network losses. The nodal losses factors of the nodes in the Expansion Plan of the Transmission System tend to values close to 1, this will benefit the plants that will be connected to these nodes in the future.

75 BIBLIOGRAPHY 1. Wholesale Market Administrator, 2009 Statistical Report, Coordination Standards 2. National Commission of Electric Power, Indicative Expansion Plan of the Generation System Expansion Plan of the Transmission System

76 ANEX A ACRONYMS AMM CNEE EIA ETCEE INDE MEM Administrador del Mercado Mayorista (Wholesale Market Administrator). Comisión Nacional de Energía Eléctrica (National Commission of Electric Power). Energy Information Administration. Empresa de Transporte y Control de Energía Eléctrica. Instituto Nacional de Electrificación. Ministerio de Energía y Minas (Ministry of Energy and Mines).

77 TRELEC TRECSA EEGSA DEORSA DEOCSA Transportista Eléctrica Centroamericana. Transportadora de Energía de Centroamérica, S.A. Empresa Eléctrica de Guatemala, S.A. Distribuidora de Electricidad de Oriente, S.A. Distribuidora de Electricidad de Occidente, S.A. MEASURING UNITS GWh kv MVA MW MWh US$ Giga watts hour Kilovolt Mega volt-ampere Mega watt Mega watt hour USA Dollars MULTIPLES Prefix Symbol Factor Kilo k 1,000 Mega M 1,000,000 Giga G 1,000,000,000 Tera T 1,000,000,000,000 ANEX B REFERENCES

78 i Wholesale Market Administrator, Solid demand, ii Wholesale Market Administrator, Solid Offer and Efficient Solid Offer, iii Ministry of Energy and Mines, Electricity Subsector, Energy Statistics Report , iv TRELEC, Corporate Information, Unión Fenosa, the company, high voltage lines, v National Commission of Electric Power, Expansion Plan of the Transmission System vi vii Wholesale Market Administrator, 2009 Statistical Report, Wholesale Market Administrator, Statistical Reports viii Banco de Guatemala, Gross Domestic Product -GDP-, 2001 Base and 1958 Base, Years: (Variation Rate), ix Energy Information Administration (EIA), AEO2009 National Energy Modeling System, 2009,