ORLANDO-Latin American nations need to be movers and seekers when it comes to their own power generation density, diversity and destiny.
This was a theme of a hub session on the POWER-GEN International exhibit floor Thursday morning. Representatives of Siemens and the U.S. Energy Association revealed where emerging markets such as Chile, Colombia and Mexico have evolved and how far they have to go to achieve generation diversity and abundance at a low cost.
“Latin America is in a stage of transition,” said Omar Rubio Olvera of Siemens Energy in Orlando, site of this year’s POWER-GEN.
He highlighted Chile’s progress in developing ancillary markets beyond typical day to day generation. Other nations are working toward those goals such as day-ahead markets and power purchase agreements.
“They are slowly moving into doing more,” Olvera said. “From baseload to intermediate and parking, ancillary services”They’ll have to be fast and responsive.”
Johanna Koolemans-Beynen, of the U.S. Energy Association, has worked with Colombia to advance its goals toward a more responsive, diverse generation mix. The country is planning its first reverse energy auction for February, aiming at 1.5 GW of clean generation capacity with a price tag of around $1 billion U.S.
Colombia is heavily dependent on hydropower, but in certain years the rainfall declines and is creating urgency around the fuel diversity issue, she said. Reverse auctions essentially start with a price point and use the bidding processing to drive it down from there.
The risks are underbidding and resale of contracts, as well as currency depreciation.
“Of course, the main goal is to make sure that the electricity is available when it’s needed,” Koolemans-Beynen said.
Argentina, Brazil and Chile have put together auctions for a while. Mexico is planning its fourth auction this month, hoping to replicate or improve on the previous one which whittled costs down to $20.57 per MWh.
“They have helped bring along new generation capacity,” she added.
POWER-GEN 2018 drew more than 14,000 attendees and 800-plus exhibitors to the Orange County Convention Center over its three days. Next year’s event will be in November in New Orleans.