Second Generation Electricity Reforms in Latin America and the California Paradigm

In this paper we discuss second-generation electricity reforms being formulated in Latin America and how they are being reshaped by the California crisis, which had stood as a paradigm, at least in theory, for fully competitive markets. We argue that the main lesson policy makers in Latin America should draw from the experience in California and other electricity markets around the world is that the liberalization of wholesale markets will not result in more competitive outcomes where market concentration is significant, final consumers are isolated from actual marginal production costs and capacity is tight. At least in the case of Argentina and Chile, the California crisis has had a “positive externality” by persuading policy makers, at least momentarily, to postpone liberalization reforms and make them realize the complexities in implementing competitive markets.

Precios Eléctricos Flexibles

One of the critiques to the regulatory framework of the Chilean electricity sector is the lack of flexibility for regulated prices (nodal prices) to adapt to changes in supply and demand. We develop a simple model to estimate welfare losses when using uniElectricity pricing, electricity prices, regulation

Archaean crustal evolution in West Africa: A new synthesis of the Archaean geology in Sierra Leone, Liberia, Guinea and Ivory Coast

A new synthesis of the geology and geochronology of the little-known Archaean rocks in Sierra Leone, Liberia, Guinea and Ivory Coast is presented in order to better understand the processes of Archaean crustal evolution in this region, and to attempt to interpret these data in the light of our current understanding of Archaean crustal evolution. In addition, this study seeks to identify those aspects of Archaean crustal evolution which are currently not known in this area and which need to become the subject of future studies, given the economic importance of this region in terms of the mineral deposits hosted in the Archaean rocks. These include greenstone-belt hosted iron ore, lode gold, chromite and columbite-tantalite and younger diamondiferous kimberlites intrusive into Archaean felsic gneisses. The new results show that this cratonic nucleus comprises of four main geological units: 1. The oldest crust is made up of 3.5-3.6 Ga TTG (tonalite-trondjemite-granodiorite) gneisses. These only outcrop in the east of the craton in Guinea but their presence is indicated elsewhere in the central part of the craton though xenocrystic zircon cores in younger rocks. 2. The major rock type found throughout the craton is 3.26-2.85 Ga TTG gneiss. In detail these magmas are thought to have formed in two episodes one between 3.05-3.26 Ga and the other between 2.85-2.96 Ga. The presence of inherited zircons in the younger suite indicate that this event represents the partial reworking of the older gneisses. 3.4 Ga eclogite xenoliths in kimberlite derived from the sub-continental lithospheric mantle are thought to be the restite after the partial melting of a basaltic protolith in the production of the TTG magmas. 3. Supracrustal rocks form linear belts infolded into the TTG gneisses and metamorphosed to amphibolite and granulite grade. They are of different sizes, contain a variety of lithological sequences and may be of several different ages. The larger supracrustal belts in Sierra Leone contain a thick basalt-komatiite sequence derived by the partial melting of two different mantle sources, unconformably overlain by a sedimentary formation. They are seen as an important resource for gold, iron-ore, chromite and columbite-tantalite. 4. A suite of late Archaean granitoids formed by the partial melting of the TTG gneisses in a craton wide deformation-metamorphic-partial melting event at 2800 +/- 20 Ma. This thermal event is thought to be responsible for the stabilisation of the craton. This new synthesis highlights major geological and geochronological similarities between the Archaean rocks of Sierra Leone, Liberia, Guinea and Ivory Coast and those in the Reguibat Shield in the northern part of the West African Craton suggesting that the two regions were once more closely related.UoD URS

Renewable Energy in the Context of Sustainable Development

Historically, economic development has been strongly correlated with increasing energy use and growth of greenhouse gas (GHG) emissions. Renewable energy (RE) can help decouple that correlation, contributing to sustainable development (SD). In addition, RE offers the opportunity to improve access to modern energy services for the poorest members of society, which is crucial for the achievement of any single of the eight Millennium Development Goals. Theoretical concepts of SD can provide useful frameworks to assess the interactions between SD and RE. SD addresses concerns about relationships between human society and nature. Traditionally, SD has been framed in the three-pillar model—Economy, Ecology, and Society—allowing a schematic categorization of development goals, with the three pillars being interdependent and mutually reinforcing. Within another conceptual framework, SD can be oriented along a continuum between the two paradigms of weak sustainability and strong sustainability. The two paradigms differ in assumptions about the substitutability of natural and human-made capital. RE can contribute to the development goals of the three-pillar model and can be assessed in terms of both weak and strong SD, since RE utilization is defined as sustaining natural capital as long as its resource use does not reduce the potential for future harvest. The relationship between RE and SD can be viewed as a hierarchy of goals and constraints that involve both global and regional or local considerations. Though the exact contribution of RE to SD has to be evaluated in a country specifi c context, RE offers the opportunity to contribute to a number of important SD goals: (1) social and economic development; (2) energy access; (3) energy security; (4) climate change mitigation and the reduction of environmental and health impacts. The mitigation of dangerous anthropogenic climate change is seen as one strong driving force behind the increased use of RE worldwide. The chapter provides an overview of the scientific literature on the relationship between these four SD goals and RE and, at times, fossil and nuclear energy technologies. The assessments are based on different methodological tools, including bottom-up indicators derived from attributional lifecycle assessments (LCA) or energy statistics, dynamic integrated modelling approaches, and qualitative analyses. Countries at different levels of development have different incentives and socioeconomic SD goals to advance RE. The creation of employment opportunities and actively promoting structural change in the economy are seen, especially in industrialized countries, as goals that support the promotion of RE. However, the associated costs are a major factor determining the desirability of RE to meet increasing energy demand and concerns have been voiced that increased energy prices might endanger industrializing countries’ development prospects; this underlines the need for a concomitant discussion about the details of an international burden-sharing regime. Still, decentralized grids based on RE have expanded and already improved energy access in developing countries. Under favorable conditions, cost savings in comparison to non-RE use exist, in particular in remote areas and in poor rural areas lacking centralized energy access. In addition, non-electrical RE technologies offer opportunities for modernization of energy services, for example, using solar energy for water heating and crop drying, biofuels for transportation, biogas and modern biomass for heating, cooling, cooking and lighting, and wind for water pumping. RE deployment can contribute to energy security by diversifying energy sources and diminishing dependence on a limited number of suppliers, therefore reducing the economy’s vulnerability to price volatility. Many developing countries specifically link energy access and security issues to include stability and reliability of local supply in their definition of energy security. Supporting the SD goal to mitigate environmental impacts from energy systems, RE technologies can provide important benefits compared to fossil fuels, in particular regarding GHG emissions. Maximizing these benefits often depends on the specific technology, management, and site characteristics associated with each RE project, especially with respect to land use change (LUC) impacts. Lifecycle assessments for electricity generation indicate that GHG emissions from RE technologies are, in general, considerably lower than those associated with fossil fuel options, and in a range of conditions, less than fossil fuels employing carbon capture and storage (CCS). The maximum estimate for concentrating solar power (CSP), geothermal, hydropower, ocean and wind energy is less than or equal to 100 g CO2eq/kWh, and median values for all RE range from 4 to 46 g CO2eq/kWh. The GHG balances of bioenergy production, however, have considerable uncertainties, mostly related to land management and LUC. Excluding LUC, most bioenergy systems reduce GHG emissions compared to fossil-fueled systems and can lead to avoided GHG emissions from residues and wastes in landfill disposals and co-products; the combination of bioenergy with CCS may provide for further reductions. For transport fuels, some first-generation biofuels result in relatively modest GHG mitigation potential, while most next-generation biofuels could provide greater climate benefits. To optimize benefits from bioenergy production, it is critical to reduce uncertainties and to consider ways to mitigate the risk of bioenergy-induced LUC. RE technologies can also offer benefits with respect to air pollution and health. Non-combustion-based RE power generation technologies have the potential to significantly reduce local and regional air pollution and lower associated health impacts compared to fossil-based power generation. Impacts on water and biodiversity, however, depend on local conditions. In areas where water scarcity is already a concern, non-thermal RE technologies or thermal RE technologies using dry cooling can provide energy services without additional stress on water resources. Conventional water-cooled thermal power plants may be especially vulnerable to conditions of water scarcity and climate change. Hydropower and some bioenergy systems are dependent on water availability, and can either increase competition or mitigate water scarcity. RE specific impacts on biodiversity may be positive or negative; the degree of these impacts will be determined by site-specific conditions. Accident risks of RE technologies are not negligible, but the technologies’ often decentralized structure strongly limits the potential for disastrous consequences in terms of fatalities. However, dams associated with some hydropower projects may create a specific risk depending on site-specific factors. The scenario literature that describes global mitigation pathways for RE deployment can provide some insights into associated SD implications. Putting an upper limit on future GHG emissions results in welfare losses (usually measured as gross domestic product or consumption foregone), disregarding the costs of climate change impacts. These welfare losses are based on assumptions about the availability and costs of mitigation technologies and increase when the availability of technological alternatives for constraining GHGs, for example, RE technologies, is limited. Scenario analyses show that developing countries are likely to see most of the expansion of RE production. Increasing energy access is not necessarily beneficial for all aspects of SD, as a shift to modern energy away from, for example, traditional biomass could simply be a shift to fossil fuels. In general, available scenario analyses highlight the role of policies and finance for increased energy access, even though forced shifts to RE that would provide access to modern energy services could negatively affect household budgets. To the extent that RE deployment in mitigation scenarios contributes to diversifying the energy portfolio, it has the potential to enhance energy security by making the energy system less susceptible to (sudden) energy supply disruption. In scenarios, this role of RE will vary with the energy form. With appropriate carbon mitigation policies in place, electricity generation can be relatively easily decarbonized through RE sources that have the potential to replace concentrated and increasingly scarce fossil fuels in the building and industry sectors. By contrast, the demand for liquid fuels in the transport sector remains inelastic if no technological breakthrough can be achieved. Therefore oil and related energy security concerns are likely to continue to play a role in the future global energy system; as compared to today these will be seen more prominently in developing countries. In order to take account of environmental and health impacts from energy systems, several models have included explicit representation of these, such as sulphate pollution. Some scenario results show that climate policy can help drive improvements in local air pollution (i.e., particulate matter), but air pollution reduction policies alone do not necessarily drive reductions in GHG emissions. Another implication of some potential energy trajectories is the possible diversion of land to support biofuel production. Scenario results have pointed at the possibility that climate policy could drive widespread deforestation if not accompanied by other policy measures, with land use being shifted to bioenergy crops with possibly adverse SD implications, including GHG emissions. 712 Renewable Energy in the Context of Sustainable Development Chapter 9 The integration of RE policies and measures in SD strategies at various levels can help overcome existing barriers and create opportunities for RE deployment in line with meeting SD goals. In the context of SD, barriers continue to impede RE deployment. Besides market-related and economic barriers, those barriers intrinsically linked to societal and personal values and norms will fundamentally affect the perception and acceptance of RE technologies and related deployment impacts by individuals, groups and societies. Dedicated communication efforts are therefore a crucial component of any transformation strategy and local SD initiatives can play an important role in this context. At international and national levels, strategies should include: the removal of mechanisms that are perceived to work against SD; mechanisms for SD that internalize environmental and social externalities; and RE strategies that support low-carbon, green and sustainable development including leapfrogging. The assessment has shown that RE can contribute to SD to varying degrees; more interdisciplinary research is needed to close existing knowledge gaps. While benefi ts with respect to reduced environmental and health impacts may appear more clear-cut, the exact contribution to, for example, social and economic development is more ambiguous. In order to improve the knowledge regarding the interrelations between SD and RE and to fi nd answers to the question of an effective, economically effi cient and socially acceptable transformation of the energy system, a much closer integration of insights from social, natural and economic sciences (e.g., through risk analysis approaches), refl ecting the different (especially intertemporal, spatial and intra-generational) dimensions of sustainability, is required. So far, the knowledge base is often limited to very narrow views from specifi c branches of research, which do not fully account for the complexity of the issue

Un nuevo operador independiente de los mercados eléctricos chilenos

El mercado mayorista eléctrico de cada uno de los sistemas interconectados de Chile es administrado por el Centro de Despacho Económico de Carga (CDEC), organismo encargado de la operación física, económica y comercial del sistema. El funcionamiento de los CDEC ha sido uno de los aspectos de la regulación que más discusión y análisis ha generado y su reformulación ha sido planteada en varias instancias. El artículo revisa las características ideales que debe cumplir tal organismo, según patrones internacionales, y como el CDEC cumple, o no, con ellas. Se analiza cómo gradualmente se han ido introduciendo cambios a su estructura y modo de operación. Se formula por último cómo avanzar en su reforma para llegar a constituir un efectivo operador independiente

COMPETITIVE MARKETS IN ELECTRICITY SUPPLY: ASSESSMENT OF THE SOUTH AMERICAN EXPERIENCE

The paper analyzes the South American experience in the creation of competitive markets in the electric industry, which has pioneered changes worldwide. The changes began in 1982, when Chile formalized an electric power reorganization. Argentina followed in 1992, and then Peru in 1993, Bolivia and Colombia in 1994. The Central American countries and Brazil joined the group in 1997. Venezuela and Ecuador have also started similar processes. The paper contributes with an assessment of the insights gained with the introduction of competition, as well as management challenges and opportunities. Problems in competitive markets operation are identified, along with the regulation of monopolistic activities, transmission access and distribution pricing. The consequent global interaction of the energy markets and related emerging issues are also analyzed.Electric Utilities, Electricity Markets, Utilities Policy, Deregulation, Industrial Organization, Industrial Policy

Regulación del sector eléctrico en Chile, Perú y Venezuela

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