Current Status and Prospects of Energy Efficiency and Renewable Energy in Latin America & Caribbean

Transcription

1 Current Status and Prospects of Energy Efficiency and Renewable Energy in Latin America & Caribbean Manlio F. Coviello Chief, Energy & Natural Resources Unit ECLAC, United Nations

2 ENERGY EFFICIENCY

3 Latin America and the Caribbean in the global energy context

4 Changes in productive structure, in sectoral composition of consumption and in the share of the sources, explain the non desirable pathway of the Energy Intensity in LAC ENERGY INTENSITY (BOE/1OOO US$ at 2000 prices) Index 1980= OECD Total América Latina y Caribe

5 . The EI s trajectory of LAC is not far from OECD s, even with a different concentration of primary industry (i.e. the natural resources exploitation in LAC) 1 USA OECD Asia (sin China) ALAC-OLADE CHINA CHINA 2.5 China 2 Tep / Miles de U$ ALC Asia OECD - USA

6 Oil consumption in Transport VS Economic Growth C.Final (Tep)/Hab LAC is converging towards pathways already stepped by Korea and EU América Latina y Caribe Estados Unidos UE 15 China OEC D Korea GDP/capita, 2000 US$ Pib Percápita US $2000

7 In the IEA s WEO Reference Scenario , 2030, the energy consumption of ALC keeps its relative position, if referred to OECD ( i.e 4 times less ) A;l k; l ksf ;l ;l ;lfd ;l ; consumo energía final per cápita (toe/hab) l ;la df ; jk;lj kkl ;lda sf Consumo Per-Capita de Final energía Energy final Consumption per cápita. ( toe/hab ALC hab) vs. OCDE ALC toe/hab OCDE toe/hab

8 Promoting Energy Efficiency in Latin America & Caribbean: pending issues and challenges

9 EE IN LAC: AN OVERVIEW The region is characterised by specific obstacles to the implementation of EE investment, both by private businesses and the public sector. Notably: 1) In many countries, the climate of political instability has led to a general uncertainty of the normative context,, hindering the feasibility of such long-term investments ( as the EE-related..)

10 EE IN LAC: AN OVERVIEW 2) the fact that most countries are either energy exporters or control utilities market, removes in many cases the incentives to reduce the consumption of energy through EE investment, since taxation on energy consumption represents a massive source of revenue, at little political cost 3) the rather clean energy mix consumed by the economies of the region (thanks to biofuels and hydroelectric power) makes environmental concerns less urgent

11 URE (Rational Energy Use) in Argentina ( 92-99) PUREE (Energy Efficiency Project) in Argentina since 2006 PROCEL (National Elect. Conservation Progr.) in Brazil since 1985 Main EE programs in LAC CONPET (Rational Use of Oil and Gas Programme) in Brazil since 1991 PPEE (Energy Efficiency Country Programme) in Chile since 2005 PROURE (Progr.. for the Rational Use of Energy) in Colombia PRONACE (Nat. Energy Conservation Progr.) in Costa Rica since 1994 PAEC (Cuba Electricity Conservation Programme) in Cuba since 1997 PAE (Energy Saving Programme) in Ecuador PESIC (EE in Commercial and Industrial Sector) in Honduras since 2004 CONAE (National Commission for Energy Efficiency) in Mexico since 1989 FIDE (Electricity Conservation Trust) in Mexico since 1990 PAE (Energy Saving Project) in Peru since 1994 PAE (Energy Saving Project) in Uruguay since 2004

12 Coordinated by H. Altomonte & M. Coviello March 2010 downloadable at:

13 MAIN FINDINGS OF THE STUDY Based on the results of the the study, 10 fundamental conclusions could be obtained at regional level,, as follows: Conclusion #1) Situation of Energy Efficiency programs, projects and initiatives in LAC are very different depending on the country analyzed

14 CONCLUSIONS OF THE STUDY Conclusion #2) The regulatory and institutional contexts are very different and cannot be addressed with a similar approach.. A strong process of local adaptation must be done in order to be successful Conclusion #3) It is not possible or convenient to merely copy foreign regulations. They must be taylor-made for LAC countries Conclusion #4) In several countries of the Region, lack of continuity in Energy Efficiency policy regulations has been (and still is ) critical

15 CONCLUSIONS OF THE STUDY Conclusion #5) This discontinuity generates the risk of losing experienced technical teams. In fact, counting on trained national experts able to manage national Energy Efficiency programs, requires a long time and continue efforts Conclusion #6) In most countries investigated (except Mexico) do not exist local financial sources focused to specifically support Energy Efficiency programs

16 CONCLUSIONS OF THE STUDY Conclusion # 7) a relevant relevant difficulty in monitoring the results of energy efficiency programs, is evident. The introduction of Performance Indicators for monitoring Energy Efficiency Program, turns out to be a key-issues in every region s country The most recent ECLAC s Flagship study on EE is attacking this specific issue

17 CONCLUSIONS OF THE STUDY Conclusion #8 ) The The mere existence of compulsory energy efficiency laws or regulations does not guarantee at all the success of a national Energy Efficiency Program An interesting example to this regards is the PUREE program in Argentina. Under its compulsory framework, it gives $ awards to users that show at least a 10% in energy saving with respect to 2004 levels. And establishes $ fines to users that don t t reach the target. The results of all this have beenb een..

18 PUREE/Argentina Amount of awarded and fined users June 2005 December 2008 AWARDED F I N E D Users preferred to pay fines instead of saving energy!! This, is strictly related to the very low price of energy in Argentina

19 CONCLUSIONS OF THE STUDY Conclusion #9 ) National Energy Efficiency programs still depend excessively on international support, although volatility of energy prices are starting to trigger some local investing initiatives Conclusion #10 ) Barriers referred to lack of information for energy consumers, aiming at being be more efficient in using energy,, are still high

20 The ECLAC s proposals for more effective EE Public Policies To correct price distortions that fight against the sustainable management of energy demand To actively promote and finance national EE programs To put in place transport, urban infrastructure and territorial policies to reduce fuel consumption & pollution The EE and Renewable sources policies must be part of an integrate energy policy,, conceived from the perspective of the sustainable development

21 The ECLAC s proposal for more effective EE Public Policies All the above, calls for the proactive participation of different actors, mainly the energy companies Nevertheless the leadership of the Government in its role of planner, promoter and regulator is fundamental Though the State must lead the process, EE policy constitutes a national responsibility in this respect From there, the need to generate a political dialogue" inside and between region s s countries, aiming at exchanging experiences and jointly advance towards a sustainable path

22 The new ECLAC s challenge: the EE Policy Dialogue With the support of the German Cooperation (BMZ/GTZ) ECLAC is launching a new initiative aiming to stimulate & coordinate a deeper discussion about the need for more sustainable and sustained energy efficiency policies in Latin America & Caribbean Project s s overall objective: to contribute to strengthen the horizontal & international cooperation in EE in LAC, establishing: 1. An Energy Efficiency Policy Dialogue (1 st EEPD: November 18 & 19 t, Santiago, Chile); and 2. an "ad-hoc" Regional Fund for Energy Efficiency (Energy Efficiency Fund)

23 OBJECTIVES OF UNECE-GEE21 FULLY MATCH WITH ECLAC S S WORKPLAN!! Given the overall situation and the bottlenecks presented above, ECLAC is strongly interested in a more systematic exchange of experience on capacity building, policy reforms and investments project finance with countries of other regions The experience accrued by with UN-ECE the EE 21 project and the expected accomplishments of GEE21 programme, are unsurpassed opportunities in this sense, that ECLAC is seriously intended to support and take advantage of

24 RENEWABLE ENERGY

25 In 2009, world investements in renewables have simply collapsed, due to the financial crisis

26 and Renewable Energies do not take-off in the Latin america either

27 AMERICA LATINA & CARIBE OFERTA ENERGÍA LATIN AMERICA AND THE CARIBBEAN TOTAL ENERGY SUPPLY Carbon 2.6% Leña NO Sostenible. 2.7% Otras NO Renovables 0.6% Geotermia 0.7% Gas natural 28.3% Renovables 25.7% Hidroenergía 14.7% Petroleo 40.1% Leña Residencial 4.7% Productos Caña 4.1% Carbón Veget. 0.6% Leña Industria 0.2% Leña Agropecuario 0.3% Otras Renovables 0.5%

28 AMERICA LATINA & CARIBE OFERTA DE ENERGÍA LATIN AMERICA AND THE CARIBBEAN TOTAL ENERGY SUPPLY Carbon 5.2% Nuclear 1.1% Leña no Sostenible. 1.7% Otras No Renovables 0.1% Geotermia 0.4% Gas natural 27.1% Hidroenergía 11.7% Carb Veget Sosten 1.4% Petroleo 39.2% RENOVABLES 25.7% = Leña Sosten/Residen 4.0% Productos Caña 5.8% Leña Sosten/Industria 0.7% Leña Sosten/Agropec 0.3% Centrales Eléct. Renov. 0.1% Otras Renovables 1.2%

29 LATIN AMERICA LATINA AND THE Y CARIBE CARIBBEAN - OFERTA TOTAL ENERGY DE ENERGÍA SUPPLY Carbon 4.6% Nuclear 0.8% Leña no Sostenible. 1.7% Otras No Renovables 0.4% Geotermia 0.5% Gas natural 25.6% Petroleo 42.1% RENOVABLES 24.7% Hidroenergía 9.2% Productos Caña 7.0% Carb Veget Sosten 1.4% Leña Sosten/Industria 0.7% Leña Sost/Residen 4.0% Leña Sosten/Agropec 0.3% Otras Renovables 1.5% Centrales Eléct. Renov. 0.1%

30 RENEWABILITY INDEX (Renewables( Supply / Total Energy Supply) IRO - INDICE DE RENOVABILIDAD DE LA OFERTA DE ENERGÍA (Oferta Renovables/Oferta Total de Energía) 45.0% 40.0% 35.0% % 25.0% 20.0% 15.0% 10.0% 5.0% 0.0% CARIBE ORIENTAL GRANDES ANTILLAS AMERICA CENTRAL COMUNIDAD ANDINA MERCOSUR MEXICO BRASIL

31 BRASIL BRAZIL - TOTAL ENERGY OFERTA SUPPLY ENERGÍA TOTAL ENERGY SUPPLY Carbon 7.0% Nuclear 1.1% Leña NO Sostenible. 2.9% Otras NO Renovables 2.8% Gas natural 6.0% Hidroenergía 14.8% Carbón Vegetal 2.7% Petroleo 42.6% Renovables 37.6% Productos Caña 12.5% Leña Industria 1.5% Leña Residencial 3.2% Leña Agropecuario 0.6% Otras Renovables 2.2%

32 BRASIL BRAZIL - OFERTA TOTAL TOTAL ENERGY DE SUPPLY ENERGÍA Carbón 5.8% Nuclear 1.4% Leña no Sostenible. 3.1% Otras No Renovables 2.8% Carb Veget Sosten 3.4% Gas natural 9.6% Petroleo 34.9% RENOVABLES 42.4% Hidroenergía 12.6% Productos Caña 17.9% Leña Sosten/Industria 1.5% Leña Sosten/Residen Leña 2.8% Sosten/Agropec 0.7% Centrales Eléct. Renov. 0.1% Otras Renovables 3.4% EFECTO PROINFA

33 Available at:

34 Some steps towards a more stimulating regulation have been taken, though

35 LAW YEAR MECHANISMS / INCENTIVES ARGENTINA Law N A Fiduciary's Fund is created; managed and allocated by the Electric Energy Federal Council. Pays up to 1,5 cents US$/kWh wind, solar, biomass and geothermal power. BRASIL Law N /02 (PROINFA) 2002 Direct incentives to the national grid connection of biomass thermal electricity plants, wind power plants and small hydroelectric plants. CHILE Law N : 2008 It has been set, for electric operators, a minimum level of electric generation through renewable energies ( 5%) - "Renewable Portfolio Standard System". COLOMBIA Law N ECUADOR Regulación N. 004/ PROURE program is created to promote the Rational Use of Energy and the nonconventional energy sources. Regulates the operation of the renewable energy generation units installed in the country, as the parameters to set the tariffs ("feed-in tariff" system). GUATEMALA Decree N Economical and fiscal incentives EL SALVADOR Law "LIFFER" 2007 A Revolving Fund to Promote the Renewable Energies (Fomento de las Energías Renovables - FOFER) will grant soft credits, securities and assistance to financing feasibility studies. MEXICO Law "LAFRE" (in process) Creates a 55 MM US$ annual Trust that will allow the renewable energies to cover the 12% of national generation in NICARAGUA Law N It establishes a 10 years period with tax benefits to the investor company. It guarantees a payback for renewable sources of energy between 5.5 y 6.5 cents US$/kWh. PERU Law Decree N It fix a "Bonus" for renewable energies on electric tariffs, in order to guarantee a minimum profitability (12%) to renewable generators. DOMINICAN REPUBLIC Law N It guarantees a 100% exemption from tax on machineries imported by companies ; moreover the companies are exonerated from the the Income Tax during 10 years. URUGUAY Decree N. 77/ It authorizes UTE ( Govt'l Electric Utility) to subscribe special purchase agreements on energy with national suppliers that produce energy through renewable sources.

36 Which barriers still prevent the take-off of the renewables in Latin America?

37 FINANCIAL BARRIERS Limited availability of the promotion credits/loan High transaction costs Lack of financial international cooperation mechanisms

38 TECHNICAL BARRIERS Insufficient technical-economical economical information about national resources Limited technical capacity to design and develop projects Limited development of supply and service system chains in off-grid zones

39 REGULATORY BARRIERS Shorter periods of contracts for purchasimg energy (max 36 months) Limits to the installed capacity of renewable projects

40 SOCIAL BARRIERS Social rejection of hydro projects with reservoir Reduced payment capacity of low- income sectors (rural areas,, remote, poor areas) poor city

41 POLITICAL / ECONOIMICAL BARRIERS Weak insertion of renewables in the energy policies and in the national regulatory frameworks Regardless the huge volatility of hydrocarbon price, the renewables continue having economic competitiveness problems VS conventional energies (see next graph) The renewable energies insertion requires solid (i.e $$$$.) promotion mechanisms!!!

42 Medium-Big Hydro Natural Gas Oil & Coal Source: Source, IEA, January

43 LEVELIZED COSTS OF ENERGY Main problem of renewable energies is the difficulty calculating in a integrated way the efective economic competitiveness in comparison with conventionals. Concept of Levelized Cost of Energy (LCoE or LCE) : enables to compare in a comprehensive manner costs of different technologies, throughout their lifetime Represents cost of energy of a project for which NPV = 0 In other words: LCoE = minumum price at which the energy has to be sold in order to reach the break-even

44 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : L a r g e H Y D R O LCOE (cents/kwh PETROLEO GENERACIÓN a FUEL OIL 5 - GRAN HYDRO = Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

45 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : G E O T H E R M A L LCOE (cents/kwh GEOTERMIA = 5.97 PETROLEO GENERACIÓN a FUEL OIL Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

46 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : M i n i H Y D R O LCOE (cents/kwh MiniHYDRO = 6.79 PETROLEO GENERACIÓN a FUEL OIL Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

47 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : B I O M A S S (gasification) LCOE (cents/kwh BIOMASA = 7.02 PETROLEO GENERACIÓN a FUEL OIL Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

48 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : C O A L (price: 50 US$/ton) 35 LCOE (cents/kwh PETROLEO GENERACIÓN a FUEL OIL CARBON (eficiencia planta: 34%)= Precio Petroleo (US$/barril) Price of Oil (US$/barrel) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

49 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : W I N D LCOE (cents/kwh EOLICA = 8.89 PETROLEO GENERACIÓN a FUEL OIL Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

50 35 30 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : C O M B I N E D C Y C L E (price of natural gas: 12 US$/ (price of natural gas: 12 US$/mmBTU) LCOE (cents/kwh C.C a GAS = 9.60 PETROLEO GENERACIÓN a FUEL OIL Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

51 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : N U C L E A R LCOE (cents/kwh NUCLEAR = 9.65 PETROLEO GENERACIÓN a FUEL OIL Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

52 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : CONCENTRATED SOLAR POWER (CSP) LCOE (cents/kwh PETROLEO GENERACIÓN a FUEL OIL C S P = Precio Petroleo (US$/barril) Price of Oil (US$/barrel) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

53 L e v e l i z e d C o s t o f E n e r g y (LCoE)) : D I E S E L (price: 3.50 US$/gallon) LCOE (cents/kwh GENERACIÓN a PETROLEO FUEL OIL DIESEL = Price Precio of Petroleo Oil (US$/barrel) (US$/barril) Fuente de datos: ESMAP 2007 y L. Monari, World Bank

54 INSTITUTIONAL BARRIERS Limited institutionality of the renewable energies Tendency to prioritize red expansion instead of renewable projects in situ Global benefits not recognized by the energy authorities (see next graphic)

55 EXTERNALITIES AND GENERATION COST SOURCE GENERATION COST (US$ cents/kwh) EXTERNALITIES * (US$ cents/kwh) COAL NATURAL GAS LARGE HYDRO FUEL OIL NUCLEAR GEOTHERMAL MINI - HYDRO BIOMASS WIND PHOTOVOLTAIC Range min - max, world average Uniform World Model for Spain calculated by UAH ** Damages produced by polluting emissions coming from an energy source. Calculated througout the whole life cicle of each kilowatt/hour

56 ..and if the World imposes a CO2 Tax to fossil fuels. Impacto Impact de la Tasa of CO2 de Tax CO2 on sobre LCoE el LCoE LCOE Coal Oil Natural Gas IGCC with CCS * Tasa sobre CO2 (US$ / ton CO2) Data source: ESMAP 2007 & L. Monari, World Bank * Integrated Gasification Combine Cycle with Carbon Capture & Storage

57 Today, not only technical, ethical and environmental, but also economical elements exist that could open the way to a massive implementation of selected renewable energies. So, let s s go on promoting our Green Dreams!

58 Thank you