the small hydro plants in latin america

THE SMALL HYDRO PLANTS IN LATIN

AMERICA AND THE CARIBBEAN

Small Hydro Energy: Local Solutions to Climate Change and

Sustainable Development

VICTORIO OXILIA DÁVALOS

EXECUTIVE SECRETARY

29th, October, 2013

Campinas, Brazil

The Small Hydro Plants in Latin America & The Caribbean

Source: SIEE-OLADE, 2013, data of the year 2012

Mix of the total energy supply, LA&C vs. The World

Crude oil and derivatives

41%

Natural gas28%

Coal and coke4%

Nuclear1%

Hydroenergy9%

Biomass14%

Other renewables

3%

LA&C (5,909 Mboe)

Crude oil and derivatives

32%

Natural gas22%

Coal and coke27%

Nuclear6%

Hydroenergy2% Biomass

10%

Other renewables

1%

World (91,564 Mboe)

LA&C: 10 boe/ hab. World: 13 boe/hab.

USA: 50 boe/hab.

Japan: 26 boe/hab.

Europe: 22 boe/hab.

LA&C, year2011 (5,909 Mboe) World, year 2010 (91,564 Mboe)

Source IEA, 2013, data of the year 2010



Per capita electricity consumption (year 2012)

Source World Bank, year 2010



Hydroenergy share in the power generation mix (year 2012)



Hydropower, potential and installed capacity (year 2012)



SHP in LA&C, potential and installed capacity (year 2011)

CountryPotential

(MW)

Installed

capacity

(MW)

Argentina 430 66

Belice 51.3 7.3

Bolivia 21

Brasil 25,000 4,106

Chile 117

Colombia 172 172

Costa Rica 91.1

Cuba 65

Ecuador 146 77

El Salvador 98.6 15.2

Grenada 7 0

Guatemala 62.7 35.6

Honduras 385 54.1

Jamaica 80 24

México 3250 353.5

Nicaragua 40 2.9

Panamá 122.3 38.8

Perú 254

Rep. Dominicana < 5.00

Uruguay 176

Ranges of hydro plants of small scale

Country Small (MW) Mini (kW)Micro

(kW)Pico (kW)

Argentina 0.5 - 15 50 - 500 5 - 50

Brazil < 30

Chile 2.1 - 20 101 - 2000 5.1 - 100 0.2 – 5

Colombia 0 - 10

Costa Rica < 20

Ecuador 0 - 10

El Salvador < 20

Mexico < 30 < 500 < 100 < 10

Panama < 10


Main types of incentives for Small Hydro Plants

I N C E N T I V E S

B. To provide

readiness to the energy

trading

D. To provide

readiness to foreign

capital inflows

F. To provide readiness

to project financing

A. Preferential prices for

transport and energy

production.

C. Priorities in the dispatch

of the generated energy.

E. Income tax exemption in

various percentages.


Incentives for SHP in some countries of LA&C

A. Preferential prices for transport and energy production. B. To provide readiness to the energy trading. C. Priorities in the dispatch of the generated energy. D. To provide readiness to foreign capital inflows. E. Income tax exemption in various percentages. F. To provide readiness to project financing.

Source: Renewable Energy Observatory, UNIDO – OLADE, 2013

Country Acts / Incentive Programs Type

National Act on the promotion of renewable energy for electricity production (Act 26 190 /06) F

Electricity Supply Program to Rural Dispersed Population in Argentina. Establish provincial energy programs for rural electrification, mainly using photovoltaic, wind, micro hydro turbines and diesel generators.

F

The most recent policy on renewable energy was established in early 2010, when Argentina had implemented incentive in the tariffs for granting power purchase agreements (PPA) for renewable energy. Includes mini hydro projects.

B

A Rural Electrification Decree was approved in 2005 (Supreme Decree No. 28 of 567), which aims to increase rural electrification through renewable energy development and a change in the energy mix

F

Hydropower program. Designed by UMSA is dedicated to developing technologies to use water resources. Its goal is to get technology packages developed in different research projects, ready to be transferred to the end users, preferably rural population.

B

The current Act 10438/02 helped to the Incentive Program for Alternative Electricity Generation (PROINFA-Programma Fonres Incentive Alternatives), which aims to encourage the involvement of Mini Hydro Power to the national grid.

C

Free energy trading allowing producers to sell energy directly to consumers through the network at a rate of 50% discount to use the network (Act No. 9648). A, B

Exemption of the financial compensation for the use of resources (Act No. 7990-No. 9427) F

Chile

Renewable Energy Electricity Act and Electricity Short Acts I and II. which proclaims the following: a) the free transit of the energy through the network for plants with installed capacity under 9 MW and the proportionate share of transit for plants between 9 MW and 20 MW, b) The electricity distribution companies must purchase the energy generated for all kinds of small plants and the price is set periodically by the Ministry of Energy.

A, B

Argentina

Bolivia

Brazil






The Act 697 makes available the incentives for research and development in the field of mini hydro plants F

Incentives have been implemented as research grants, tax exemptions and fee waivers by reliability for SHP (<20 MW).

E

Ecuador Preferential costs depending on the energy source of the plant and the preferential entry to the network. Regulation 004/011 - CONELEC.

A

Act of investment promotion for electricity generation (Act No. 1002) F

Priority dispatch of transmission system operators. C

Regulation 354/009 promotes the electricity generation from non-traditional renewable sources and granting a waiver of a significant percentage of income tax for the generators. D, E

Decree 455/007 provides tax benefits that may be granted (deduction of taxes in accordance with the amount of investment, tax exemptions, VAT refund).

D, E

El Salvador Tax exemption for 10 years for projects under 10 MW. D, E

In 2009, a rural electrification program for four years was implemented, initiated by the Government, where the objectives were to promote the energy access across the country and the use of renewable energy sources in marginalized rural communities; This initiative operates in 55 rural communities. It is planned to install a total of 31 micro-hydro (5-150 kW) and a wind turbine which will generate an average availability of 200 Wh per household.

B

E, F

Dominican Republic

Act No. 57-07 on Incentives for Development of Renewable Energy Sources and its Special Regimes. Where it stands: exemption from income tax, tax relief to external financing, bond emissions reduction for projects through mini-hydropower plants up to 5MW.

Uruguay

Peru

Colombia






Act 476 for the Promotion of the Hydropower Subsector, states that hydropower schemes under 1 MW do not need a water concession, but must be granted 15 years for systems with capacities from 1 MW to 5 MW, a simplified procedure is applied to obtain a water concession from MIFIC.

D, E

Act 217 General Act of Environmental Protection and Natural Resources states that projects below 5 MW of capacity is not necessary environmental impact assessment F

It frees of the income tax for a period of up to seven years (Act 532). D, E

CubaIn 2006 it was held a series of programs called "Energy Revolution", where, in the electricity sector, are considered: energy saving and efficiency, a higher availability of power services (implementation of distributed generation and rehabilitation of the network), and the use of renewable energy.

B

JamaicaIncentives from the government: 15% of total generation capacity of the networkwork will be provided from renewable energy resources by the end of 2015. Furthermore, a bonus of up to 15% above the utility avoided costs will be allowed to purchase electricity generated from renewable sources.

A, B

Nicaragua


Conclusions:


1. Most countries in the region have implemented within their internal policies and regulations, various types of mechanisms and incentives to promote the construction and operation of small hydro plants.

2. There is significant potential in many countries, for the installation of small hydro plants, which has not yet been harnessed as the case of Argentina, Brazil, Mexico and Central American countries.

3. The SHP projects should be evaluated on the basis of a socio-economic and environmental analysis, eliminating financial barriers through tariff incentives, tax exemptions and preferences in the electricity market.

4. The Governments should take advantage of abundant multilateral credit lines that currently exist to implement non-conventional renewable energy projects, including the SHP.

THANKS

the small hydro plants in latin america

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