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2011 - reNEWS
Energy is here re RENEWABLE POWER IN THE US, CANADA AND BEYOND reNews Americas Free trial at www.reNewsAmericas.com www.juwi.com RENEWABLE ENERGY NEWS • LATIN AMERICA FOCUS Big ask for Brazilian industry Supply chain will be put through its paces with approaching 2.5GW of new wind due in 2012. Turbine exports will tear up rulebook Miassaba II poster child for free market Guillotine set to fall on Proinfa laggards • • • 3 Pirates focus minds at farm Hijacking incident other side of the world inspires some quick thinking at Central America’s largest project, which was built in Honduras. Cerro de Hula transforming lives Power deals and grid limit upside Tender puts Panama on right track 7 22 DECEMBER 2011 Now the deluge • • • Chile turns cheerleader Andean nation working on support regime to move away from reliance on fossil fuels and large-scale hydro. Miners at front of queue for wind • 10 Mexican builders beat odds But conflicts with the indigenous Zapoteca communities continue to blight projects in wind hot-spot Oaxaca. Jostling for space on 4GW Oaxaca line Honduran high point: Globeleq Mesoamerica Energy’s Cerro de Hula farm went live this year Photo: GME • 13 Argentina financing trap • • First shoots in Andean cluster Wind energy breakout shaping up in Bolivia, Ecuador, Colombia, Peru and Venezuela. Caribbean growth spurt Uruguay on gigawatt pathway • • 17 worldwide expertise in renewable energy Almost every windy country in Latin America broke previous construction records this year to propel the annual total past 1GW for the first time, writes Sebastian Kennedy. The region’s operational wind farm portfolio will be more than doubled to almost 7GW by this time next year, according to official forecasts, but this rosy prediction should be taken with a pinch of salt. See page 2 www.pmss.com Apparent withdrawal of sovereign guarantee on power payments adds to woes for renewables tender winners. Rawson carries flag for Genren tenders Chinese turbines on the march 15 latin america 2 reNewsAmericas 22 December 2011 Initiatives such as Brazil’s auction system and Mexican tenders, along with falling turbine costs, are helping to increase the competitiveness of wind energy compared to traditional power sources but industry’s reliance on political will is unlikely to change any time soon Price is right for progress LATIN AMERICA CUMULATIVE CAPACITY FORECAST 2010 build End-2010 2011 build End-2011 2012 build End-2012 2013 build End-2013 2014-15 build End-2015 tally Nations End-2009 L atin America witnessed a record year for wind energy growth in 2011 with more turbines installed across the region than in any previous 12-month period. Almost every windy country in Central and South America and the Caribbean broke previous construction tallies to propel the total past the 1GW per annum landmark for the first time. This symbolic achievement pushed Latin America’s cumulative installed capacity up to 3171MW, according to figures compiled exclusively by reNews Americas. If official forecasts are to be believed, the operational wind farm portfolio will be more than doubled to almost 7GW by this time next year. This rosy prediction should be taken with a pinch of salt, however, as major doubts surround supply chain capacities even in key markets such as Brazil. South America’s largest economy may have seen a flood of investment in new turbine facilities but hitting 2435MW in a single year is seen as too much, too soon. Brazil will continue to blaze a trail, though, and even hitting half of the 2012 target would represent a major step forward. Growth in this market is projected to account Argentina 35 23 58 55 113 267 380 519 899 271 1170 Brazil 632 250 882 448 1330 2435 3765 1861 5626 1938 7564 Caribbean 85 21 106 34 140 265 405 105 510 165 675 Central America 163 23 186 115 301 40 341 89 430 159 589 Chile 167 4 171 30 201 100 301 370 671 300 971 Bolivia, Colombia, Ecuador, Peru and Venezuela 23 0 23 32 55 178 233 170 403 120 523 Mexico 175 344 519 459 978 415 1393 838 2231 3,088 5319 Uruguay 20 23 43 10 53 84 137 362 499 630 1129 TOTAL 1300 688 1988 1183 3171 3784 6955 4314 11,269 6671 17,940 Capacity in MW for almost half of all new Latin wind capacity out to mid-decade. Federal initiatives such as Brazil’s reverse price auction system and Mexican state utility CFE’s wind tenders are at the heart of the mini wind boom. Governments in Chile and Uruguay, this year’s notable under-performers, are addressing market failures by putting in place mechanisms designed to provide long-term price stability and encourage investment. Wind energy is prospering only in those countries where policymakers are proactively greasing the wheels, and industry’s reliance on political will is not likely to change for the foreseeable future. Supply chain and infrastructure investments are being made on the basis of continued government support and market analysts warn this stream will dry up if there is a drastic change of course. Conditions in each market are unique and countries such as Argentina are still working to define an appropriate support structure. The Global Wind Energy Council’s Latin America committee chairman Ramón Fiestas said regulatory experimentation requires a long period of gestation. “In general, when a support system is implemented it takes time before you will observe a satisfactory outcome, and in Latin America this is particularly true. It took a long time for mechanisms to function in markets we now consider successful, for example Supply chain strength: Brazilian workers at Alstom’s new nacelle Brazil and Mexico.” plant at the Camaçari industrial complex in Bahía Another prominent regional Photo: Alstom www.reNewsAmericas.com • www.reNews.biz trend is the increasing competitiveness of wind energy compared to traditional power sources. Wind is undercutting natural gas in Brazil, and similarly economic levelized power costs have been attained at tenders in Peru and Uruguay, and to a lesser extent in parts of Central America. Competition among international turbine suppliers has exerted a strong downward pressure on prices. Electricity consumers across Latin America are indirectly benefiting from the global economic crisis as wind developers and investors battle for a share of one of the few markets with strong medium-term growth prospects. Competitive power procurement tenders have provided suitable mechanisms for governments to take advantage of this window of opportunity. It is still too early to judge the success or sustainability of the approach but their ambitions are creating an opportunity to industrialize wind energy cost-effectively across Latin America. reNewsAmericas 22 December 2011 latin america 3 Big ask in Brazil Turbine breakthrough: Desenvix is aiming to power up the first Alstom machines in Brazil early in the New Year at its 90MW Brotas wind farm in Bahía state Photo: Alstom T he focus in Brazil is firmly on delivery as Latin America’s largest economy prepares for the most frenzied period of wind farm construction in its history. All the ingredients are in place for 2012 to be a momentous year in the decadelong gestation of an indigenous industry. Federal and free market projects totaling 2435MW are contracted to come online over the next 12 months. The 1900MW bulk of this is at early build stages or yet to break ground. The 2012 forecast dwarfs even this year’s all-time high of 448MW, which propelled Brazil towards its second gigawatt of installed capacity. Delivery in 2011 fell well short of expectations of 845MW, however, as a number of schemes at advanced stages have slipped into the New Year. The first 57 Alstom ECO 86 Supply chain will be put through its paces with approaching 2.5GW of new wind due online in 2012 turbines on Brazilian soil went up ahead of schedule but have been in the parked position for several months awaiting a grid connection. Energization is due imminently. A further 225MW of Proinfa sites (see page 5) should come onto the system in the coming weeks and months. Only 913MW, less than half of next year’s tally, has the green light to begin construction from power regulator Aneel. The figure suggests a spate of extension requests are imminent for up to 1GW of wind farms contracted in 2009 for delivery by July 2012. Ramón Fiestas of the Global Wind Energy Council said aiming for 1900MW from a standing start sends out positive market signals but warned Brazil’s fledgling supply chain will be stetched to the limit. “Bringing that quantity online in one year in a market that is only just consolidating is a big ask, and there is a lot to do. There is a need for masses of highway improvements, specialized vehicles for transporting turbine components, logistical services and cranes.” Reports of a shortage of turbine towers earlier this year do not bode well but an ongoing boost in production capacity with the establishment of new factories www.reNewsAmericas.com • www.reNews.biz may be enough to alleviate any supply bottlenecks. Fiestas said Brazil’s longer-term aspirations could require additional efforts to ease the burden on development bank BNDES, the sole funder of Brazil’s wind boom. “I do not doubt the financial capacity of BNDES but Brazil is going to need resources for other lending activities out to 2016 with (the FIFA World Cup and) the Olympics. “Mobilizing the resources for wind projects is a complicated process and not something that can be done overnight. The process needs to be stimulated by the entrance of other financial entities to generate more competitive conditions,” he said. The more favorable loan rates of BNDES compared with other lenders discourages developers from seeking finance anywhere else, he added. 4 latin america reNewsAmericas 22 December 2011 COMING BRAZILIAN PIPELINE Due 2012 2435.2MW Remaining Proinfa sites Project State MW Developer/owner Turbines Agua Doce Alegria II Contracted at Dec 2009 wind auction Araras, Buruti, Cajucoco, Coqueiros, Quixaba, Garcas, Lagoa Seca, Vento do Oeste Aratua I, Miassaba III, Rei dos Ventos I Areia Branca, Embuaca, Mar e Terra, Icarai Barra dos Coqueiros Cabeco Preto Colonia, Icarai I & II, Taiba Aguia, Taiba Andorinha Dunas de Paracuru Faisa I-V Macaubas, Novo Horizonte, Seabra (Brotas) Morro dos Ventos I, III, IV, VI, IX Osorio II, Sangradouro II & III Pedra do Reino Rei Dos Ventos III Santa Clara I-VI, Eurus VI Various Contracted at LER 2010 auction Pedra do Reino III Contracted at LFA 2010 auction Casa Nova Renascença I-IV, Ventos de Sao Miguel Contracted at A-3 2011 auction Cerro Chato IV-VI, Trindade, Ibirapuitã Contracted on free market Fleixeiras I, Mundaú, Guajirú, Trairi, Porto da Delta SC RN 125.8 101 Impsa New Energy Options (Multiner) Impsa Vestas CE RN RN, CE SE RN CE CE CE BA RN RS BA RN RN, CE BA 211.2 113.7 89.9 34.5 19.8 121.8 42 134.4 90 145 74 30 48.6 188 294 Energimp (Impsa) Brasventos (Furnas / J. Malucelli / Eletronorte) Martifer, Santander Energen (Desenvix) Gestamp Energio Inveravante Suzlon Desenvix Dobreve Energia Inveravante / Elecnor / Enerfin Gestamp Brasventos (Furnas/J Malucelli/Eletronorte) CPFL Renova Energía Impsa Alstom Suzlon Sinovel Vestas Suzlon Gamesa Suzlon Alstom GE Wobben Vestas TBC Wobben GE BA 18 Gestamp Vestas BA RN 180 150 CHESF Energisa Impsa Vestas RS 78 Eletrosul Impsa CE, PI 145.5 Tractebel Energia Due 2013 Contracted at LER 2010 auction Campo dos Ventos II Cristal, Primavera, Sao Judas Da Prata, Dos Aracas, Morrao, Seraima, Tanque, Ventos do Nordeste Eurus I & III Eurus II, Renascença V Fazenda Rosario II Serra Santana I-III, Cabeco Preto IV Contracted at LFA 2010 auction Aratua III Arizona, Caetite, Calango, Mel Asa Branca I-III, Eurus IV Asa Branca IV-VIII Atlantica I, II, IV & V Costa Branca, Juremas, Macacos, Pedra Petra Osorio III Pedra Branca, Sao Pedro do Lago, Sete Gameleiras Pontal 2B REB Cassino I-III São Bento do Norte Vento Formoso, Ventos de Tiangua, Tiangua Norte, Parazinho, Morro do Chapeu Contracted on free market Campo dos Ventos I, III, IV, V, Eurus V RN BA BA RN RN RS RN 30 90 153 60 60 20 97.2 CPFL Enel Brasil Renova Energía Dobreve Energia Atlantic Energias Renovaveis Elecnor / Enerfin Gestamp Wobben Siemens GE GE Vestas Wobben Vestas RN RN, BA RN RN RS RN RS BA RS RS RN CE 28.8 258 120 160 120 78.2 26 86.4 10.8 69 94 150 Bioenergy Iberdrola, Neoenergia Energimp (Impsa) ContourGlobal Brasil Grupo Cobra ERSA Brasil (CPFL) Elecnor / Enerfin Brennand Energía, CHESF Oleoplan / Oleos Vegetais Planalto Santander / Desenvix Dreen Energia (Galvão Energia), COPEL Energimp (Impsa) GE Gamesa Impsa GE Gamesa Siemens Wobben Vestas GE TBC Vestas Impsa RN 150 CPFL Wobben Expected 2014 Contracted at A-3 2011 auction Cataventos Chui I, II, IV & V, Minuano I & II Delta do Parnaíba, Porto das Barcas, Porto Salgado Santa A Pádua, Sao Cristovao, Sao Jorge Various Various Verace I-X Contracted at Reserve 2011 auction Caicara Carcará, Carnaúbas, Reduto, Santo Cristo, Sao Joao Corredor do Senandes II-IV, Vento Aragano I Dos Indios II Famosa I, Pau Brasil, Rosada, Sao Paulo Lanchinha, Pelado Malhadinha Santa Helena, Santa Maria Various Ventos de Santo Uriel Ventos de Sebastiao / Geraldo / Santa Rosa / Inacio Contracted on free market Various 1937.5MW CE RS PI CE BA, RN, PE BA RS 30 144 75.6 73.6 183.6 212.8 258 Tecneira / Grupo ACS Eletrosul Omega Energia Renovável Abengoa / Banco Santander Enel Green Power Renova Eletrosul Gamesa Impsa Gamesa Gamesa Siemens GE Gamesa RN RN RS RS RN, CE RN CE RN BA RN CE 57.6 142.4 116 28 85 48 22 60 148.8 16.1 120 Bioenergy Voltalia Odebrecht Energias Alternativas, MML Energia Elecnor / Enerfin Furnas / Grupo BMG / Ventos Tecnologia Gestamp Servtec Casa dos Ventos / Copel Brazil Energy (Nova Investimentos / Man B&W) Dobreve Energia Energimp (Impsa) GE TBC Alstom Wobben Fuhrländer Vestas Suzlon GE GE GE Impsa RN 116 ERSA Vestas Due 2015 and 2016 Contracted on free market TBC Contracted at A-5 2011 auction Various Siemens 1861.4MW 1377MW BA 400 Renova Energia / Light TBC Various 977 Various TBC TOTAL 7611MW www.reNewsAmericas.com • www.reNews.biz reNewsAmericas latin america 22 December 2011 5 Turbine exports will tear up the global rulebook benefiting rather than hampering the development of a viable supply chain. Brasilia’s promise to contract steady volumes of wind energy to meet growing demand should ensure the sector flourishes on its path towards 25GW in 2020. “The condition to maintain sustainable growth in the wind power industry is the Cheap Brazilian hardware could undermine commercialization of, on average, 2GW per year in federal auctions industry pricing model, particularly in Europe over the next six years. them more cheaply in Brazil and “The government has already roundbreaking prices for signaled the possibility of wind energy in Brazil could more expensive outside?” Melo said suppliers in this amount of wind energy have profound impacts her country can not use the participation. for the sector globally, according requirement to reach renewables “Moreover, there are to national industry association targets as a justification for fiscal incentives for national ABEEólica. expensive turbines, as has manufacture of equipments for Executive president Elbia traditionally been the case in wind and solar power,” she said. Melo said the country’s reverse Europe. Whether prices will stabilize price auction experiment may “Europe is required to invest over the long term is another fundamentally alter project in clean energy but Brazil doesn’t matter, however, and lies largely dynamics by introducing into Vision: ABEEólica executive need to because it already has outside of the hands of industry the market top-name turbines at 70% from renewable sources. The president Elbia Melo and government. highly competitive rates. “The price reduction for the “I think Brazil is going to totally manufacturers don’t have that Photo: www.elbiamelo.com.br argument, so to sell here they need next auctions will depend not only change the paradigms for wind another reason,” she said. on costs of manufacturing and energy in the world,” Melo said large-scale hydro and gas-fired The perfect justification in a services but also on global market in an interview with reNews power generation, as it did in country with some of the highest conditions, currency exchange, Americas. federal auctions in August. electricity prices in the region international climate policy and The ABEEólica boss said Brazil The head of ABEEólica believes would be that wind can undercut other factors,” Melo said. is set to begin selling hardware the rock-bottom prices are overseas within 12 months if domestic production capacity hits official estimates of 4.5GW per a benchmark environmental deadline locking into the higher annum by late 2012. he stragglers from Brazil’s permitting procedure for planners The domestic regulated market previous renewables incentive Proinfa power purchase rate. Those that miss out will have to across the country. is contracting approximately program Proinfa are looking “Environmental licenses find alternative routes to market 2GW per year with the surplus for a route to market as the either through the regulated sector are mostly conceded by the earmarked for export from 2013. commissioning deadline looms at environmental agency from each or on the free market. The deepening crisis for wind in the year-end. state. Since wind power is still a One scheme guaranteed to parts of Europe is only helping the Impsa and Multiner are said new activity, there are no standard lose its Proinfa power purchase Brazilian cause, Melo said. to be seeking a fourth successive procedures (and) each state agreement is the 135MW “Look at Spain, where they are extension to the delivery of applies its (own) mechanism for Quintanilha Machado in Rio de intending to cut the feed-in tariff two respective projects but this environmental licensing. Janeiro state. The site, which for wind by 40% in 2015 while in is expected to fail despite the “This is a temporary problem. is earmarked for sale to CPFL Brazil some investors are saying advanced stage of construction at ABEEólica is working with Energia as part of the Jantus wind could reach R$90 per MWh. both. federal and state environmental acquisition, has not begun “We may end up exporting The first blocks of Impsa bodies to standardize licensing construction and will have to turbines to Europe, which is a bad subsidiary Energimp’s 125MW requirements,” it said. sign for Europe but a good sign for Agua Doce development cluster in negotiate a new PPA. This is being done through the The turbine bottleneck that Brazil.” Melo said the perennial Santa Catarina are entering test updating of the 2009 wind charter argument for generous subsidies phases now and the site will reach hampered delivery of Proinfa (Carta dos Ventos), which sets out projects has been resolved with in Europe has been significantly full power by June. planning guidelines for regulators the arrival of international undermined by the plummeting Multiner’s 100MW Alegría and industry. manufacturers in Brazil, cost of Brazilian wind. extension in Rio Grande do Norte One of the signatories, Rio but the problem of securing “All of the companies that is said to be due to go live from Grande do Norte environmental environmental licenses continues fabricate turbines in Brazil are next April. watchdog IDEMA, is going a to hinder auction schemes. foreign, from the USA, Denmark, Industry sources said one or Industry association ABEEólica step further by expanding a new Spain or Germany. more of these projects may be department dedicated to wind said it is working with state “Given that labor is only a small split into sub-sections, with those farm analysis and permitting. part of the price, why do they sell delivered and signed off before the and federal agencies to develop G Guillotine set to fall on Proinfa laggards T www.reNewsAmericas.com • www.reNews.biz latin america 6 reNewsAmericas 22 December 2011 Miassaba II poster child for free market T he convoluted task of establishing a free market for wind energy in Brazil reached a milestone this month with the completion of a pioneering project. Independent developer Bioenergy flicked the switch at the country’s first wind farm to secure finance on the back of a private power purchase agreement negotiated outside of the federal regulated market. The project, while modest in size at just 14.4MW, is significant in that it demonstrates the viability of selling wind power directly to distributors and energy intensive consumers. Miassaba II, located in the coastal area of Guamaré in Rio Grande do Norte state, began delivering power on a commercial basis to Minas Gerais power giant Cemig this month. It is the first tranche to come to fruition from a 218MW lot sold to Cemig at a private auction almost two years ago. The wind farm dispelled industry concerns over Bioenergy’s ability to finance a free market project, although there is no firm timeframe for delivering the remaining capacity. The perennial hurdle is the difficulty in guaranteeing a physical quantity of power at any particular moment from an inherently variable power source. Bioenergy president Sergio Power sales pioneer: Miassaba II features nine 1.6MW GE turbines, the first of more than 1GW due to be installed by the US outfit in Brazil by 2015 Photo: Bioenergy Marques said negotiating a PPA with a large utility that has a diversified portfolio of power sources mitigated the task at Miassaba II. “This was easier to resolve with Cemig, which owns a generation mix with which it can control and regulate supply with total balance between different matrices,” Marques said. Despite Bioenergy’s landmark achievement, however, substantial barriers still have to be overcome before Brazilian wind is being sold at significant volumes in the parallel market. “In reality, every case is unique and there is no single formula,” he added. Industry association ABEEólica is hoping this is not the case, launching a renewed effort to define a regulatory silver bullet in a bid to open the free market floodgates. Executive president Elbia Melo described the process as “a major challenge”. She began discussions with regulatory agencies last month over a pair of proposals to increase the attraction of wind to power traders. The first suggestion would see traders create portfolios of contracts from different and complementary sources by lumping wind in with biomass, mini-hydro and others. Supply from each technology would, in theory, peak and trough BRAZIL’S 2011 REPORT CARD Proinfa sites Project State MW Developer/owner Turbines Alegria I RN 51 New Energy Options (Multiner) Vestas Alhandra I PB 6.3 Impel do Brasil Suzlon Bom Jardín da Serra SC 90 Impsa Impsa Tramandaí/ Elebrás Cidreira 1 RS 70 EDP Brasil/innoVent Wobben Contracted at December 2009 wind auction Coxilha Negra/Cerro Chato RS 90 Eletrosul Wobben Fazenda Rosario I & III RS 22 Inveravante/Elecnor/Enerfin Wobben Mangue Seco RN 104 Petrobrás Wobben RN 14.4 Bioenergy GE Contracted on free market Miassaba II TOTAL 447.7MW Installed capacity to date: 1329MW www.reNewsAmericas.com • www.reNews.biz at different points throughout the daily and seasonal cycle, presenting a single power portfolio with a guarantee of generation. This would minimize the risk to traders and increase the viability of commercializing the power to consumers, Melo said. A separate proposal is to include wind in an existing energy reallocation mechanism for hydro. This works by pooling production across all participating hydro plants and assigning credits to each generator according to their proportional size. This allows for the purchase of shares of Brazil’s overall hydro production, which is less volatile than output from individual plants. Physical delivery from each plant is measured against its assigned credits and a settlement is reached periodically to iron out any discrepancy. Melo said she is pursuing the integration of wind into this system due to the complementary nature of hydro and wind in Brazil. The proposals remain just that, however, and discussions with regulators are expected to extend well into 2012 before any firm agreements are reached. Elsewhere, legislative proposals to oblige energy companies to purchase a minimum of 250MW of “assured energy” per year from wind farms were rejected this month by Brasilia’s House of Representatives. reNewsAmericas T Table laid for 24MW dessert ME is preparing to order a further batch of Gamesa turbines to expand Cerro de Hula by 24MW. The second phase will begin construction sometime next year and come online in 2013. The developer is looking at simplifying arrangements through a single turnkey contract with Gamesa, which would in turn bring in Iberdrola to handle the civil engineering element. GME had an engineering, procurement and construction contract with both Gamesa and Iberdrola for the first phase. The extra power from 12 new turbines could be sold under an existing power purchase agreement with state utility ENEE. Honduran law allows PPAs to be extended by up to 25% without recourse to a new competitive power procurement tender. The additional turbine locations were included in the original environmental impact assessment, which will help to minimize permitting requirements. 7 Pirates focus minds for Honduras team Hijacking incident other side of the world inspires some quick thinking at Central America’s largest wind farm ground in Honduras were forced GME was left largely in the dark to think on their feet to keep the with no indication of how long schedule on track and mitigate talks would last or what kind of the impact of extra costs. Cerro de deals were being negotiated with Hula project manager Alex Rojo the hijackers. said GME and turnkey contractors The construction crew on the Gamesa and Iberdrola hastily drew up a Plan B. “We came up with seven different scenarios to face this situation. We considered ordering a second transformer and airlifting it over from Mumbai, and we are talking about 100 tonnes of weight. “We also thought about renting a portable substation from Mexico,” Rojo said. In the 8 www.greenpowerconferen www.greenpowerconferences.com +44 (0)20 +1 971 23870 0700 he largest wind farm in Central America reached full power ahead of schedule last month despite an encounter with pirates that threatened to derail the entire project. The development team at Globeleq Mesoamerica Energy (GME) is celebrating successful commissioning of the 102MW Cerro de Hula in Honduras while reflecting on a frantic six months that took the scheme to the brink of catastrophe. Midway through the construction schedule, Somali pirates off the coast of Oman took a ship carrying the project’s high-voltage substation transformer hostage. The vessel was intercepted after leaving the supplier’s warehouse in Mumbai, India, en route to the Suez Canal via the Gulf of Aden. Specialist hijacking mediators were brought in to negotiate the liberation of the vessel with its captors but the cargo remained trapped on the edge of the Arabian Sea for the next three months. G latin america 22 December 2011 Mexican International Renewable Energy Congress Cemex CRE Asociación Uruguaya de Energía Eólica (AUdEE) Iberdrola Acciona Wind Power, Oaxaca Enel Green Power www.reNewsAmericas.com • www.reNews.biz latin america 8 reNewsAmericas 22 December 2011 Win-win: Gamesa supplied 51 G87 turbines to Cerro de Hula and is in line for a repeat order for 12 units Photo: Globeleq Mesoamerica Energy Cerro de Hula transforming lives T he Cerro de Hula project has delivered a “paradigm shift in the living standards” of local people, according to Globeleq Mesoamerica Energy country managing director Jay Gallegos. Agricultural communities in the area will receive a package of benefits valued at up to $20m over the lifetime of the farm, he said. Improvements include a forestry programme that will deliver a net increase of 76,500 trees and creation of a database of the area’s hitherto undocumented archaeology, flora and fauna. Up to 24% of project costs were spent on local products and services, including sourcing many electrical components within Honduras and employing up to 650 local people at the peak of construction. Gamesa dispatched a team from the US to train up local subcontractors in safety procedures, and the project is on track to reach 1 million man-hours with no lost time incidents. One of the toughest preconstruction challenges was to define and legalize title deeds for more than 280 landowners within the project area. “We spent a lot of time registering land… in exchange for Pirates focus minds for Honduras team end GME ordered a second transformer and shipped it the “long way round” across the Pacific to avoid running into any more pirates while embarking on an accelerated turbine commissioning schedule to make up for lost time. Rojo and his men set up a temporary medium-voltage tie-in to the local distribution network and rigged up portable generators to prepare the 51 Gamesa G87 machines in the absence of an HV transmission link. “By doing that 7 and by allocating more resources to assemble faster we were able to have all the turbines ready and commissioned by 26 October instead of 15 December,” he said. “We thought that the impact was going to be enormous and that we were going to lose a lot of money. But in the end having all these people thinking and working together helped a lot in accelerating the other fronts at the same time.” He added: “To be honest I don’t know how we did it but we did.” The run-in with the hijackers added around $5m to the overall cost of the project, of which $2m was spent on the second transformer. The pirates eventually released the vessel and the original unit arrived in September, two months before its replacement. GME said the availability of a spare transformer improves the reliability of Cerro de Hula as a power producer in the unlikely event of a critical failure in the substation. www.reNewsAmericas.com • www.reNews.biz land lease agreements. That’s a direct benefit. These landowners, who live simple agricultural lifestyles, now have titles to their properties,” Gallegos said. Nearby businesses are said to be experiencing an upturn in trade on the back of a growing number of tourists coming from the capital Tegucigalpa and further afield to visit Honduras’ newest landmark. Travel through the area has been improved with the refurbishment or creation of 23 kilometers of roads, which was an essential measure to overcome significant access challenges. Cerro de Hula stands 1500 meters above sea level some 150 kilometers from the Pacific Port of San Lorenzo. It is accessible via steep, winding two-way tracks and roads. Collaboration with local transit police and the Ministry of Transport was key to safely delivering oversized components, spread out in 459 trips along treacherous stretches of highway throughout the rainy season. reNewsAmericas latin america 22 December 2011 Tender puts Panama on right track P anama is on course to build its first wind farm in 2014 after a Spanish consortium won a statesponsored wind power tender. Unión Eólica Panameña swept the board at national utility ETESA’s auction, bagging power purchase agreements for 158MW and beating off rivals Innovent, Fersa and Helium Energy. UEP will install 88 Vestas V100 1.8MW turbines over the next two years at four sites: Marañón, Nuevo Chagres, Portobelo Ballestillas and Rosa de los Vientos. The developer’s bid prices ranged from $95 to $110 per MWh, but ETESA said it was able to drive down the rate to $90.58 by awarding the entire tender to a single bidder. “The combination of bids yielded a present value of $90.58, which will result in better prices to end users,” the utility said. “The manager recommended the other tenders submitted be discarded, taking into consideration the objective of filling the energy supply gap to regulated customers over the long term at the lowest possible price.” Power will be sold to local distribution companies EDEMET, EDECHI and Elektra Noreste under 15-year power purchase agreements starting 1 January 2014. A similar story could unfold in Guatemala where a mixed technology power tender is also underway. 2011 top-up: the 12.75MW Los Santos wind farm in Costa Rica Photo: Coopesantos 9 CENTRAL AMERICA’S SCHEDULE Installed 2011 114.75MW Project Country MW Developer Turbine Cerro de Hula Honduras 102 Globeleq Mesoamerica Energy Gamesa Los Santos Costa Rica 12.75 Coopesantos Gamesa Nicaragua 40 Blue Power & Energy / ITP Vestas Cerro de Hula II Honduras 24 Globeleq Mesoamerica Energy Gamesa Chiripa Costa Rica 49.5 Acciona / Grupo Ecoenergía Acciona Valle Central Costa Rica 15.3 Juwi Enercon Commissioning 2012 La Fé-San Martin 40MW Due online 2013 88.8MW Coming 2014 158.4MW Marañón Panama 18 Unión Eólica Panameña Vestas Nuevo Chagres Panama 30.6 Unión Eólica Panameña Vestas Portobelo Ballestillas Panama 50.4 Unión Eólica Panameña Vestas Rosa de los Vientos Panama 59.4 Unión Eólica Panameña Vestas Installed capacity to date: 300MW Power deal challenges and transmission limit upside W ind farms continue to come forward in a dripfeed fashion in parts of Central America where restricted access to long-term power purchase agreements remains a major pinch-point. Costa Rica is buying a steady trickle of new capacity through build-operate-transfer and buildown-operate concessions with state utility ICE. The winner of the most recent deal was Acciona Energía and Grupo Ecoenergía at the 49.5MW Chiripa wind park in Guanacaste province. Guanacaste is already home to an eponymous 50MW wind farm owned by GDF Suez and the new 12.75MW Los Santos facility commissioned by local power cooperative Coopesantos earlier this year. The growth of wind in Costa Rica is restricted by rules that limit the size of ICE power concessions to 50MW or 15% of the country’s installed capacity. Wind energy is approaching grid parity in other parts of the region blighted by high fossil fuel prices, but cost competitiveness alone is not enough to guarantee access to project finance. Globeleq Costa Rica CEO Mikael Karlsson said securing a bankable agreement with a credit-worthy off-taker is the main barrier. “There needs to be regulatory change and until that happens projects will be done on a one-byone basis. There is no real market that you can sell power into with the exception of Guatemala. “Renewable energy like wind needs a framework where there’s an off-taker that accepts the power when you produce it with clarity over the tariff. It doesn’t have to be a feed-in tariff but that would help. It could be a regular procurement process where you bid for a PPA,” Karlsson said. Nicaragua’s privatized power sector distinguishes it from its state-monopolized neighbors. The liberalized structure allows developers to negotiate PPAs directly with distribution companies but the issue is getting the offtaker “comfortable” with a variable power source, Karlsson said. The successful delivery of the Amayo I & II wind farms made progress in that regard, and Nicaragua is expected to be the www.reNewsAmericas.com • www.reNews.biz only Central American country to bring a wind farm online in 2012. Vestas will deliver hardware next year to Blue Power & Energy’s 40MW La Fé-San Martin project. The prospect of Central America becoming a unified power market is limited by unhelpful regulations set down as part of an ongoing project, known as SIEPAC, to interconnect six national transmission networks. “There is no such thing as a Central American market. You have individual countries with self-contained markets,” the Globeleq CEO said. “The SIEPAC project is going to help by balancing supply across the region but it is not designed to facilitate selling power across borders. The regulation doesn’t allow the private sector to trade wholesale electricity on the SIEPAC network. “It could be improved to allow us to sell wind power from Costa Rica, where we have high capacity factors, to El Salvador (where the wind resource is more limited), but the structure doesn’t facilitate these kinds of arrangements,” Karlsson said. latin america 10 reNewsAmericas 22 December 2011 Chile turns renewables cheerleader C hile is putting in place the building blocks for a sustained rollout of new renewables capacity as mass protests over the controversial HidroAysén hydro facility push the issue of energy supply up the political agenda. The broad direction of proposed reforms by President Sebastian Piñera’s administration is away from fossil fuel plants and large hydropower, in line with separate reports from conservative government-appointed advisors and an opposition group. The two studies, while at odds over the long-term potential of non-hydro renewables within the power mix, highlighted common barriers preventing Chile’s 3GW backlog of wind projects from reaching financial close. The Senate has spearheaded reform efforts, putting meat on the bones of a new support structure within a legislative project known as 20/20. Late last Andean nation working on support regime to move away from reliance on fossil fuels and large-scale hydro month lawmakers approved plans to establish twice-yearly auctions to stimulate demand for clean power and boost the country’s renewables target to 20% by 2020. Each technology will be allocated a capacity block and projects will compete for accreditation in a public tender process. The lowest bidders will secure a power price fixed for 12 years. The size of capacity blocks will be calculated to ensure renewables account for at least 50% of electricity dispatched annually into each of Chile’s four independent transmission systems. Measures such as capital guarantees and deposits will deter speculation, and sites must secure environmental permits and land use agreements to participate in the tenders. The proposals would also double the obligation on utilities to generate or buy in renewables from 10% to 20% of their annual sales. The House of Representatives will have the final say on the Senate’s reform package but any changes are expected to amount to fine-tuning rather than wholesale alteration. Jose Ignacio Escobar of Chilean renewables association ACERA said the government is focusing on institutional arrangements, including plans for an independent system operator. “We have held long discussions with Piñera’s team about what would be the best and most cost-effective solution to support renewables. I think that because of the history in Chile and what we have seen in neighboring countries the current track is heading toward an auction system with some sort of price stabilization mechanism. “I don’t think that the government is clear how that will be established, perhaps buying energy with some sort of fund or forcing consumers to buy the energy. We are evaluating alternatives and so is the government,” he said. Escobar said the state may have to guarantee the creditworthiness of the new system by underwriting spot market payments. “We would like to see some work on that, some sort of guarantee the price that’s awarded gets paid and is not subject to the risk of any other generator in the system,” he said. The new framework should be approved next year and in operation in 2013 at the latest. Renewable energy consultants Technical by nature QUALIFIED BY EXPERIENCE www.gl-garradhassan.com www.reNewsAmericas.com • www.reNews.biz reNewsAmericas latin america 22 December 2011 11 Chilean winds of change: President Piñera (center) at the inauguration of Barrick’s 20MW Punta Colorada wind farm Photo: Chile govt. Power-hungry miners at front of queue for wind A two-year lull in wind farm construction is coming to an end in Chile where as much as 470MW is planned to come online before end-2013. At least six projects are gearing up to break ground in 2012, regardless of the outcome of ongoing power sector reforms, which will turn the page on a disappointing 24 months that saw only 34MW come online in the Andean country. The increasing competitiveness of Latin American wind and shifting market conditions are opening up a route to market under the existing regulatory framework for sites up and down the length of Chile. Energy-intensive mining companies, which consume around 40% of the nation’s power, are seen as appropriate off-takers for a number of schemes. Others are preparing to take their chances on the spot market. Investment group Consorcio Eólico is planning to begin construction next year at the 108MW first phase of its Lebu Sur wind farm in the southern Biobío region. Financing agreements are said to be in place and power purchase agreement talks are underway with a confidential offtaker. Acciona Energy is in a similar situation with its 108MW Punta Palmeras project in Coquimbo, where a mining PPA and transmission grid upgrade are on the 2012 to-do list. Both companies are hoping to emulate Pattern Energy’s deal to sell power from its 115MW El Arrayán wind farm 12 CHILE’S SHORT-TERM MENU Total built 2011 Project 30MW MW Developer Turbines Monte Redondo extension Coquimbo (IV) Region 10 GDF Suez Vestas Punta Colorada Coquimbo (IV) 20 Barrick DeWind Coquimbo (IV) 100 Vestas Vestas Due 2012 100MW Talinay East Expected 2013 370MW El Arrayán Coquimbo (IV) 115 Pattern Energy Siemens Lebu Sur Biobío (VIII) 108 Inversiones Bosquemar/Consorcio Eólico TBC Negrete Cuel Biobío (VIII) 34.5 Mainstream Renewable Power Goldwind Punta Chome Antofagasta (II) 9 3Power Energy / Seawind TBC Punta Palmeras Coquimbo (IV) 103.5 Acciona Acciona Installed capacity to date: 201MW www.reNewsAmericas.com • www.reNews.biz latin america 12 to a mining company controlled by Antofagasta. The deal, which concedes a 30% project acquisition option to local offshoot Antofagasta Minerals, paved the way for Pattern to order hardware from Siemens and kick off earthworks. Renewables association ACERA’s Jose Ignacio Escobar, from Irish developer Mainstream Renewable Power, said the growing gulf between power supply and demand has opened a window of opportunity. Escobar said the local wind resource regime at any given site plays a large role in determining the viability of selling power on the spot market. “It depends on matching the curve of generation against the 11 Mining for power: Barrick’s 20MW Punta Colorada site Photo: Barrick curve of demand in that area. If you have a match then definitely you could get a good price. It depends on each project; some work on spot while others are better with a PPA.” He added: “You need to find a bank that has the vision and price expectation similar to what you need.” The improving conditions in Chile have prompted Mainstream to move away from its contingency plan to sell consented sites to cash-rich utilities aiming to hit their mandatory renewables quotas. “We are much more eager and willing to build ourselves and take on the construction risk, mainly because the market is tight. Coal plants are being delayed and stopped, and big off-takers are struggling to find supply. “Of course, you can never say no to good business and if a good opportunity appears then we have enough assets in our portfolio to sell some of those,” he said. reNewsAmericas 22 December 2011 CHILE’S LONG-TERM PIPELINE Total with environmental consent 1606.94MW Project Region MW Developer Alto Baguales extension Aysén (XI) 1.7 Grupo SAESA/Empresa Eléctrica de Aysén Altos de Hualpen Biobío (VIII) 20 Eólica Navarra Arauco Biobío (VIII) 100 Element Power Chile Calama Antofagasta (II) 250 Codelco Camarico Coquimbo (IV) 32 3Power Energy/Seawind Chiloé Los Lagos (X) 112 Ecopower Collipulli Araucanía (IX) 48 Ener-Renova El Pacifico Coquimbo (IV) 72 Eolic Partners Chile Gaby Biobío (VIII) 40 Codelco Hacienda Quijote Coquimbo (IV) 26 3Power Energy/Seawind Huentelauquen Coquimbo (IV) 9 3Power Energy/Seawind La Cachina Coquimbo (IV) 66 Ener-Renova La Gorgonia Coquimbo (IV) 76 Eolic Partners Chile Las Dichas Valparaiso (V) 16 Ener-Renova Lebu Biobío (VIII) 36 3Power Energy/Seawind Lebu extension Biobío (VIII) 6.24 Cristalerías Toro Llanquihue Los Lagos (X) 74 Ener-Renova Punta Colorada extension (PC4) Coquimbo (IV) 16 3Power Energy/Seawind Quillagua Antofagasta (II) 100 3Power Energy/Seawind San Pedro Los Lagos (X) 36 Bosques de Chiloé Talinay II & III Coquimbo (IV) 380 Vestas Valle de los Vientos Antofagasta (II) 90 Sowitec Ancud Los Lagos (X) 120 Callis Energia Chile Ckani Antofagasta (II) 240 Mainstream Renewable Power Cabo Leones Atacama (III) 170 Grupo Ibereólica Calama Antofagasta (II) 128.8 E-CL Küref Biobío (VIII) 61.2 TeEólica (EnorChile / Taim-TFG) La Cebada Coquimbo (IV) 48.3 Eolic Partners Chile Laguna Verde Valparaiso (V) 19.5 Mainstream Renewable Power Lebu Sur II Biobío (VIII) 158 Inversiones Bosquemar/Consorcio Eólico Lebu Sur III Biobío (VIII) 280 Inversiones Bosquemar/Consorcio Eólico Llay Llay Valparaiso (V) 56 Servicios Eólicos Raki Biobío (VIII) 9 3Power Energy / Seawind Renaico Araucanía (IX) 105.6 Endesa Eco Ucuquer O’Higgins (VI) 16.2 Renovables Total in planning 1412.6MW On the horizon 213MW Alcones Coquimbo (IV) 35 Mainstream Renewable Power Chile Chico Aysén (XI) TBC 3Power Energy / Seawind Chiloé Los Lagos (X) 100 Mainstream Renewable Power Maitencillo Atacama (III) 18 3Power Energy / Seawind Negrete Biobío (VIII) 60 Mainstream Renewable Power Proyectos Zona del Maule Maule (VII) TBC 3Power Energy / Seawind Puclaro Coquimbo (IV) TBC 3Power Energy / Seawind TOTAL: 3232.54MW www.reNewsAmericas.com • www.reNews.biz reNewsAmericas 22 December 2011 latin america Mexican builders beating the odds 13 Top dog: Acciona’s operational Mexican portfolio surpassed half a gigawatt after commissioning the 306MW Oaxaca wind farms this year Photo: Acciona Energía Conflicts with the indigenous Zapoteca communities continue to blight projects in wind hot-spot Oaxaca W ind farm construction in Mexico hit a record high of almost half a gigawatt in 2011 despite substantial social and financial obstacles confronting projects on the ground. Spanish developer Acciona, the leading player in the country, completed turbine installation in good time at its 306MW Oaxaca II, III and IV schemes. Energization of all 204 AW1500/70 turbines is complete and full commercial operations are slated to begin tomorrow. Acciona’s success shored up what could otherwise have been a frustrating year as conflicts between wind developers and indigenous Zapoteca communities flared up once again in Oaxaca. Renovalia’s 90MW Piedra Larga wind farm is the latest site to be held up and looks set to run well into 2012 amid accusations of misconduct by security contractors. Similar problems blighted Iberdrola at its 103MW La Venta III development, which is only now coming online. This year also saw the largest wind project outside Oaxaca indefinitely shelved due to apparent financial irregularities within the Tamaulipas state government, the municipal power off-taker. The failure of the 161MW Los Vergeles casts major doubts over other municipal wind initiatives in Tamaulipas but private developments are set to benefit from a new “open season” in the state. The Regulatory Energy Commission (CRE) is designing new transmission lines around a call for developer interest in Tamaulipas, Baja California and Puebla states. A larger 4GW line in Oaxaca (see next page) will service new projects hoping to tap into the spectacular resource along the Tehuantepec Isthmus. Wind development will be concentrated for the foreseeable future in Oaxaca, where capacity factors regularly exceed 50%, but www.reNewsAmericas.com • www.reNews.biz policy initiatives at a federal level may help redress that balance somewhat. Changes to Mexico’s renewable energy law could see farms in less windy states become cost competitive with fossil fuels. Transmission grid connection charges 14 latin america 14 Jostling for space on 4GW Oaxaca transmission line reNewsAmericas 22 December 2011 MEXICO GROWTH TRAJECTORY Commissioned 2011 459MW Project State MW Developer Turbines Fuerza Eolica del Istmo I Oaxaca 50 Peñoles Clipper exico’s Energy Regulatory Commission (CRE) has assigned capacity on a new 4GW transmission line to developers with wind sites in the state of Oaxaca. EDF Energies Nouvelles reserved 300MW at the highest rate of $320,000 per megawatt while Mareña Renovables and Eólica Unión Hidalgo each bagged 400MW. US turbine supplier Clipper claimed the largest single slice of 500MW. A number of new players are on the list, including Impulsora Nacional de Electricidad, Ecowind, Gesa Energia, Chunca del Istmo and Polímeros Mexicanos. CRE assigned a total of 3030MW to private developers plus another 800MW to national utility CFE for future tenders. Spain’s Renovalia Energy later withdrew from the call, leaving a total of 420MW unassigned. The regulator re-offered the free capacity to developers initially excluded after bidding below the minimum threshold of $271,000/MW. These companies include Elecnor, Acciona, Delaro, Tecnologías Avanzadas and Promotora y Desarrolladora Eólica del Istmo. The first deposit of 10% is due by end-January and 15% by 29 March. La Venta III Oaxaca 103 Iberdrola Gamesa Oaxaca II, III & IV Oaxaca 306 Acciona Acciona Chiapas Chiapas 28.8 REM Generación Electrica Mexicana Vestas Energía Alterna Istmeña (prev. Vientos del Istmo I & II) Oaxaca 90 Macquarie Capital/Mareña Renovables/FEMSA Vestas Fuerza Eolica del Istmo II Oaxaca 30 Peñoles Clipper Oaxaca I Oaxaca 102 Recursos Eólicos de Mexico Vestas Piedra Larga I Oaxaca 90 Desarrollos Eolicos Mexicanos (Renovalia) Gamesa Stipa Nayaa Oaxaca 74 CISA/Gamesa Gamesa Aubanel Wind Project phase 1 Baja California 70 Cannon Power/ Mexico Power Group Gamesa Chiapas Chiapas 39 Geomex TBC Comondu Baja California 16 Next Energy de Mexico TBC Energía Eólica Mareña (prev. Vientos del Istmo I & II) Oaxaca 306 Macquarie Capital/Mareña Renovables/FEMSA Vestas Energía Sierra Juárez first phase Baja California 125 Sempra Generation TBC Santa Catarina Nuevo León 22 Next Energy de Mexico GE Santo Domingo Ingenio (prev. Eoliatec del Pacifico) Oaxaca 160 EDF-EN Gamesa Sureste I Oaxaca 100 TBC (CFE tender) TBC Bií Stinu (prev. Eoliatec del Istmo) Oaxaca 164 EDF-EN Gamesa Cozumel I Isla de Cozumel 85 Mexico Power Group Gamesa? Fuerza Eolica del Istmo III Oaxaca 100 Peñoles TBC Piedra Larga II Oaxaca 137.5 Desarrollos Eolicos Mexicanos (Renovalia) Gamesa Sureste II, II & IV Oaxaca 1,100 TBC (CFE tender) TBC Mexican builders beating the odds Zopiloapan, Dos Arbolitos, El Retiro Oaxaca 214 CISA/Gamesa Gamesa Bií Hioxio Oaxaca 227.5 Unión Fenosa Generación Mexico TBC Fuerza Eólica de Baja California (power export) Baja California 300 Fuerza Eolica TBC M for all sources are being recalculated to include external costs such as environmental or ecological impacts. The changes may speed up lengthy price negotiations for wind developers looking to sell power directly to large consumers through the “self-supply” (autoabastecimiento) mechanism. The framework operates outside direct control of state monopoly utility CFE but projects must still pay connection charges to use federal infrastructure. Many get bogged down in price negotiations 13 Due 2012 414.8MW Due 2013 838MW Coming 2014 1800.5MW Expected circa 2015 1287.5MW Fuerza Eolica del Istmo IV Oaxaca 80 Peñoles TBC Mexico Wind (power export) Baja California 500 Gas Natural Fenosa/Geobat TBC Zacatecas I Zacatecas 180 Mexico Power Group Gamesa? Installed capacity to date: 978MW with industrial off-takers that will hold out in the hope of low-balling when prices dip. Several gigawatts of wind are pursuing a route to market through the self-supply model but developer appetite is yet to translate into significant capacity. Wind farms contracted through a power purchase agreement with CFE, on the other hand, tend to encounter fewer issues securing finance. These projects account for a www.reNewsAmericas.com • www.reNews.biz disproportionate share of Mexico’s installed capacity despite being fewer and further between. Documents for the next CFE tender are expected in the New Year for the 400MW Sureste I-IV series in Oaxaca. reNewsAmericas A latin america 22 December 2011 rgentina’s first serious attempt at kick-starting its dormant wind sector appears to be running into difficulties. Delivery of the government’s Genren renewables procurement program has been thrown in doubt as projects contracted to sell power to state utility Enarsa struggle to secure finance. A climate of uncertainty prevails around the deployment timetable for the unbuilt majority of the 754MW of wind contracted in the first round of the tender. Industry sources cited the high cost of capital imposed by financial institutions when securing debt against power purchase agreements with Enarsa. The root cause is said by some to be the inflated level of risk, perceived or genuine, associated with capital flows within the Argentine power sector. “When the cost of capital is more than half the project cost, perception of risk is crucial. The Argentine formula of recuperating electricity tariffs does not seem to satisfy lenders that these costs will be borne out over the long term,” a market source said. The finance problem is hindering projects at the stage of raising long-term debt. The only wind farm to move forward since Enarsa signed power contracts more than year ago, the 77.4MW Rawson in the Patagonian province of Chubut, was financed off utility Emgasud’s balance sheet. Emgasud has begun civil engineering work at the first 50MW module of its larger Puerto Madryn development, also in Chubut, but delivery of the full 220MW may require alternative finance. A project source said: “We have built Rawson and that cost us a fair sum. Madryn is underway but we are tackling it stage by stage to see if we can avoid running into the same difficulties as other Genren projects.” International investors’ unwillingness to lend to Genren schemes is due in part to a lingering skepticism around the creditworthiness of Argentine institutions since the financial 15 Argentina struggles to escape financing trap sector seeking long-term tariff certainty. “Under Genren you had fixed prices contracted and guaranteed by the state. If they haven’t been able to finance projects in Argentina with those state guarantees, how is it going to changes apply only to sites being offer any greater certainty selling considered under Genren 2 or to those already contracted under the straight into the spot market? “Any new structures should be first round. complementary to the existing Either way, bidders are still system rather than a replacement awaiting the long-overdue award to it,” a source said. of contracts under Genren 2, The difficulties have led to which was at one point expected to speculation that some sites are up buy a large proportion of capacity for sale as developers seek a swift left over from the first round. exit from their obligations. The program modifications Rawson carries flag are being seen as a step in the for Genren tenders wrong direction for an emerging Apparent withdrawal of sovereign guarantee on power payments adds to woes for Genren tender winners crisis a decade ago. The situation has been compounded, however, by the federal government’s apparent withdrawal of a $2bn sovereign guarantee on payouts from Enarsa. The removal of the Treasury backstop is said to be linked to a legislative modification approved in May whereby Genren projects will sell power directly into the spot market. There are conflicting reports over whether these 16 ARGENTINA ROADMAP Commissioned 2011 54.9MW Project State MW Developer ELOPER Turbines Diadema Diadema 6.3 Hychico/Enercon Wobben Wobben Rawson I Chubut 48.6 Emgasud Renovables Vestas Due online from 2012 267.4MW Arauco II La Rioja 25.2 Impsa Impsa El Jume Santiago del Estero 8.4 Sociedad Enerse Sapem Impsa Koluel Kayke I & II Santa Cruz 75 Impsa Impsa Malaspina I & II Chubut 80 Impsa Impsa Puerto Madryn Sur Chubut 50 Patagonia Wind Energy (Emgasud) Vestas Rawson II Chubut 28.8 Emgasud Renovables Vestas Genren wind projects Expected from 2013 Vientos del Secano 519MW Buenos Aires 50 ABO Wind TBC Loma Blanca I - IV Chubut 200 Isolux Vestas? Puerto Madryn I & II Chubut 100 Emgasud Renovables Vestas Puerto Madryn Norte Chubut 50 International New Energies (Emgasud) Vestas Puerto Madryn Oeste Chubut 20 Energías Sustentables (Emgasud) Vestas Tres Picos I & II Basica Buenos Aires 99 Sogesic TBC Zapala & Picún Leufú Neuquén 100 WPD / Sadesa TBC Zapala & Arroyito Neuquén 171 Sowitec TBC Genren wind projects Expected from 2014 271MW Installed capacity to date: 113MW www.reNewsAmericas.com • www.reNews.biz latin america 16 G enren has delivered at least one success story for Argentina in the form of the Rawson wind farm. The project’s first 27 Vestas V90 1.8MW turbines are up and running, and another 16 are in place and on schedule for commissioning in January. Emgasud’s delivery of Rawson marked a brief upturn in installation rates in Argentina and a near-doubling in the country’s cumulative installed capacity to 113MW. Next year’s prospects of up to 267MW look good on paper but the apparent troubles blighting Rawson carries flag for Genren tenders Genren could see much of that slide well into 2013 or beyond. Some claim to be on track, however. Manufacturer/developer Impsa is hoping to break ground at its respective Genren sites in the first semester of 2012. The company is closing finance at the 80MW Malaspina and 75MW Koluel Kayke sites under a debt model with a reduced proportion of project finance. The structure includes up to 71% corporate debt generated partly from commercial loans to the Impsa parent company and only 29% non-recourse project finance from external lenders. Impsa is also supplying hardware to two sites developed reNewsAmericas 22 December 2011 outside the Genren framework with backing from provincial government entities. The 25MW Arauco II will double the size of the largest wind farm in La Rioja while an 8.4MW effort at El Jume will become the first wind farm in Santiago del Estero province. German developer ABO Wind is working on a portfolio of 725MW in Argentina and Uruguay. The most advanced scheme, Vientos del Secano in Buenos Aires province, weighs in at 50MW. ABO has completed detailed engineering and design at the site. Chinese turbines on the march F irst it was the Spanish, now it is the Chinese. Turbine suppliers from the world’s fastest-growing wind energy market have begun to land on the shores of South America. This year saw Sinovel secure its first order in Brazil and Goldwind landed a pair of contracts in Ecuador and Chile. Guodian United Power Prospect of turnkey project financing packages give supply deals an extra shine for developers Technology Company will establish its regional headquarters in Brazil and has narrowed down its search to two states. Others such as Sany Electric and Envision Energy are studying market Planning a fresh ad campaign? Contact: [email protected] Get your name in front of key industry decision makers Brazil where the Chinese will have to compete with a maturing domestic turbine market. Brazilian wind association possibilities in the region. Chinese ABEEólica believes the rules are turbines are attractive to countries such that Chinese companies will have to fabricate turbines locally only beginning to develop wind in order to break into the market. because they come bundled Attaining a local content index within a complete turnkey finance of 60% is the key to accessing package. favorable loans from development Mainstream Renewable Power bank BNDES, which provides the purchased 23 Goldwind GW87 most viable model for financing 1.5MW turbines for its Negrete Cuel wind farm in central Chile on wind in Brazil. ABEEólica executive president the back of non-recourse financing from the China Development Bank. Elbia Melo said the exchange rate risk associated with bringing an Negrete Cuel is the first to alternative finance package from come forward from Mainstream’s China to Brazil is too high to work Chilean portfolio and only the country’s sixth utility-scale facility. in practice. “Chinese turbines will have to be Goldwind USA chief executive made in Brazil if they are going to Tim Rosenzweig said South America is a “key strategic market sell in Brazil. Moreover, we don’t want to create jobs for China, we for Goldwind’s international want to create jobs in Brazil,” she ambitions and we are eager said. to work with partners like Even if machines built using Mainstream to continue our cheap Chinese labor can be momentum”. effectively financed and exported A loan from the China to Brazil, fears of established Development Bank to Ecuador suppliers being undercut may not allowed Enersur and Celec to buy materialize. 16 Goldwind machines for the Melo, who returned from a trade Andean country’s first mainland mission to Beijing last month, wind farm at Villonaco. said the price of Chinese turbines Officials in Bolivia are also is comparable to those being paving the way for the Chinese attained by European, US and government to cover 85% of Asian companies already present project costs for state-owned in Brazil. industrial group SINOMACH to “We believe the Chinese will build a 14-turbine development in Tarija, another maiden Andean improve the market in Brazil but we don’t think it will affect the site. price that much,” she said. The situation is different in www.reNewsAmericas.com • www.reNews.biz reNewsAmericas latin america 22 December 2011 17 First shoots in Andean cluster Wind energy breakout shaping up in Bolivia, Ecuador, Colombia, Peru and Venezuela Venezuela milestone: state oil company PDVSA commissioned the nation’s maiden wind farm at Paraguaná this year N ations in the Andean region are beginning to cotton on to opportunities presented by the increasing economic efficiency of wind power in Latin America. While installed capacity across Bolivia, Peru, Ecuador, Colombia and Venezuela barely tops 50MW, that tally could increase tenfold by mid-decade. Much of the new megawatts is coming forward through Peru’s renewable tender system, which has seen contracted wind power prices follow a regional downward trend. The Tres Hermanas wind farm in Marcona will sell power at $69 per MWh, thanks in part to an estimated capacity factor of 52.73%. The Peruvian system works by setting a fixed price over a 20-year term through a competitive tender process, with the award going to the lowest bidders. The winning projects sell power into the spot market at the going rate, and at the end of each year any difference between the tender rate and the amount paid is liquidated through a transaction with the government. Any shortfall in payments is topped up by a state agency while any overpayment is refunded to the state by the generator. The mechanism has proved sufficiently popular to attract international developers but total contract awards of 232MW fall well short of a 2008 resolution to buy in half a gigawatt of wind. The material success of the system will become apparent over the next six to 12 months when the first three wind farms are due to enter commercial operations. Neighboring Ecuador will build out its first mainland wind farm in the province of Loja in the first half of 2012. The 16.5MW Villonaco project is a joint venture between provincial Photo courtesy of Bloque Socialista Digital, www.blosodi.com.ve developer Enersur and Ecuadorian state power company CELEC, and will feature 11 Goldwind 1.5MW turbines overlooking the provincial capital. Enersur and CELEC are already pushing ahead with their next venture, an array of up to 33 turbines along an eight-kilometer stretch of a nearby mountain ridge called Ducal-Membrillo, which is slated for operations in 2014. The partnership is assessing the feasibility of a further three sites totaling 37MW. Venezuela’s first wind farm became a reality this year with the installation of 24 Gamesa MADE AE61 1.32MW turbines on the Paraguaná peninsula of Falcón state. State oil company PDVSA intends to expand the site to 76 units by 2013. Argentina’s Impsa is firming up plans for a 75MW wind farm called Venezuela I, which has a longer-term target of 225MW. Impsa is also believed to be in the frame to supply hardware to a 25.2MW development in Guajira near the border with Colombia. The scheme is backed by electricity ministry MPPEE and state power company Corpoelec. Bolivia will install its first wind farm as soon as next year at La Ventolera in the department of Tarija, where 14 1.5MW turbines are due to go up in nine months. ANDES ACTION STATIONS Commissioned 2011 32MW Project Country MW Developer/owner Turbines Paraguaná I Venezuela 32 PDVSA Gamesa Cupisnique Peru 80 Energía Eólica TBC La Ventolera Bolivia 21 Sinomach TBC Marcona Peru 32 Cobra Perú/Perú Energía Renovable TBC Talara Peru 30 Energía Eólica TBC Villonaco Ecuador 16.5 Enersur/Celec Goldwind Venezuela I Venezuela 75 Impsa Impsa La Guajira Venezuela 25.2 MPPEE/Corpoelec Impsa? Paraguaná II Venezuela 69 PDVSA Gamesa Tres Hermanas Peru 90 Consorcio Tres Hermanas TBC Ducal-Membrillo Ecuador 30 Enersur/Celec TBC Due online 2012 179.5MW Coming 2013 169.2MW Scheduled 2014 120MW Installed capacity to date: 55MW Andes = Bolivia, Ecuador, Colombia, Peru and Venezuela www.reNewsAmericas.com • www.reNews.biz latin america 18 reNewsAmericas 22 December 2011 Caribbean growth spurt D elivery of wind energy in the Caribbean fell halfway short of this year’s forecast of 63MW but overspill from 2011 is teeing up a bumper 12 months for the islands. The Dominican Republic was the only country to deliver on its promises this year by commissioning 33.45MW at the island’s first two wind sites in Pedernales province. The other developments originally planned for 2011, Dutch developer NuCapital’s 30MW repowering of two wind farms on Curacao, were pushed into 2012 due to minor delays in reaching financial close. The Curacao repowerings will form the thin end of a 370MW wedge of Caribbean capacity coming online in 2012 and 2013. Puerto Rico will host 150MW across three new sites being built over the next two years. Pattern Energy’s 101MW Santa Isabel scheme will become the largest wind farm in the Caribbean when Dominican jumpstart: utility EGE Haina is mulling a 100MW expansion of the Los Cocos and Quilvio Cabrera wind farms, where 14 Vestas V90s and five NEG Micon NM82s came online earlier this year Photo: EGE Haina, www.loscocos.egehaina.com its 44 Siemens 2.3MW turbines come online in September. Vestas is due to deliver hardware to Spanish developer Gestamp Wind’s 23.4MW Punta Lima wind farm in 2011 while WindMar Renewable Energy is continuing with preparatory works at a 15-turbine Puerto Rican site called Guayanilla. Gamesa said it will bring online its long-delayed 50MW El Guanillo wind farm in the Dominican Republic in 2012. Spanish compatriot Inveravante’s 80MW pipeline at Granadillos and Matafongo will get underway next year and conclude in 2013. A wind tariff of $135.7 per CARIBBEAN DRUMBEAT Commissioned 2011 33.45MW Project Country MW Developer Turbines Los Cocos Dominican Republic 25.2 EGE Haina Vestas Quilvio Cabrera Dominican Republic 8.25 Consorcio Energético Punta Cana-Macao Vestas Belle Vue St. Kitts 5.4 North Star Development El Guanillo Dominican Republic 50 PECASA (Gamesa) Gamesa Playa Kanoa repowering Curacao 15 NuCapital Vestas Vestas Due 2012 209.8MW TBC Punta Lima Puerto Rico 23.4 Gestamp Wind Santa Isabel Puerto Rico 101 Pattern Energy Siemens Tera Kora repowering Curacao 15 NuCapital Vestas Granadillos Dominican Republic 50 InverAvante Vestas Guayanilla Puerto Rico 24.75 WindMar Renewable Energy Vestas Los Cocos II Dominican Republic 55 EGE Haina TBC Matafongo Dominican Republic 30 InverAvante Vestas Coming 2013 104.75MW Expected from 2014 165MW Puerto Plata-Imbert Dominican Republic 115 Jasper Caribbean Windpower TBC Luperón Dominican Republic 50 Los 4 Vientos TBC Installed capacity to date: 140MW www.reNewsAmericas.com • www.reNews.biz MWh set out in the Dominican Republic’s renewables law 57-07 has produced a pipeline of onshore developments but timescales are dictated by access to finance. Italian developer Los 4 Vientos said the build schedule for its 50MW Luperón wind farm remains up in the air despite having secured all necessary permits. The project is negotiating a majority loan from a European bank through Italian financial broker San Marco Finanziaria while local lenders will provide the remaining debt. Airon Group, a Florence-based investment company, will provide project equity. Los 4 Vientos said a turbine tender will kick off as soon as financial agreements are in place with commissioning slated for 15 months later. The wind farm was designed around Nordex machines. On St Kitts, meanwhile, the US government’s Overseas Private Investment Corporation is propping up a 5.4MW wind farm called Belle Vue being pursued by property developer North Star. The facility will offset dieselfired generation and meet up to 30% of power demand on the islands on St Kitts and Nevis. reNewsAmericas latin america 22 December 2011 19 Uruguay on gigawatt pathway Series of competitive power tenders to tap increased availability of turbines from new factories in the region W ind energy could soon account for almost a third of all power generated in Uruguay, where state utility UTE is throwing its doors open to new market entrants. This year’s construction lull of only 10MW will give way to a relative boom as a series of highly competitive wind tenders begin to bear fruit. Next year’s forecast of 84MW will more than double the country’s installed capacity, but the real action will get underway thereafter as Uruguay pitches for a gigawatt by 2014. UTE has been quick to take advantage of falling wind power prices and increased availability of turbines from new production lines in neighboring Brazil. This year’s competitive tender, which is in the final stages of grid connection analysis, is buying in 192MW at rates as low as $65 per MWh. The losers from the tender are getting a second bite at the cherry after the government passed a hasty decree to make power purchase agreements available to those able to match the average price of the winning projects. Officials in Montevideo were quick to act after spotting a window of opportunity to more re www.reNewsAmericas.com © All articles appearing in reNews Americas are protected by copyright. Any unauthorised reproduction is strictly prohibited. GIANT LEAPS IN URUGUAY Commissioned 2011 10MW Project Department MW Developer Turbines Kentilux II San José 10 Kentilux Vestas Due 2012 84.1MW El Libertador Lavalleja & Maldonado 65 Impsa Impsa Fortuny I Cerro Largo 10 Grupo Fortuny TBC Luz de Mar I Maldonado 9.1 Luz de Mar TBC Fortuny II Cerro Largo 10 Grupo Fortuny TBC Luz de Mar II Maldonado 10 Luz de Mar TBC Consorcio Venti Lavalleja & Maldonado 50 Consorcio Venti/Impsa Impsa Palmatir Tacuarembó 50 Teyma (Abengoa) Gamesa? Fingano Maldonado 50 Corporación América TBC Aguas Leguas Tacuarembó 100 Aguas Leguas TBC Ensol Florida 50 Teyma (Abengoa) Gamesa? Generación Eólica Minas Lavalleja 42 Sowitec TBC Coming 2013 362MW Expected from 2014 630MW UTE leasing San José, Colonia & Flores 180 TBC TBC UTE 3rd wind tender TBC 450 TBC TBC Installed capacity to date: 53MW than double a legislative target of 500MW by 2015. Last week’s Presidential decree said positive results from tenders indicated it is “economically and technically viable to incorporate more wind energy, and convenient to exceed the minimum target originally established”. The target can be surpassed “in the short term” thanks to the large quantity of privately developed projects presented in various recent calls. A third wind call for 450MW is due from UTE in 2012. The company is also drawing up a separate contracting mechanism to provide an alternative route to market for wind on public land. The process will lease out 180MW of sites in the departments of San José, Colonia and Flores for the construction phase, after which UTE reserves the right to acquire the project or extend the rental period to 20 years. The positive direction of wind development in Uruguay builds on less than successful initial attempts to buy in small amounts of capacity. UTE was not deterred by a barren 2007 tender or the failure of a winner from a 2009 contest to deliver results. Ramón Fiestas of the Global Wind Energy Council said the Chief correspondent Liz Switzer Correspondents: Canada and US Great Lakes states Patti Lane Latin America Sebastian Kennedy Offshore Todd Westbrook [email protected] Managing Editor Production: [email protected] +44 (0)1962 890 449 [email protected] Dan Rigden Richard Crockett 270-996-7900 [email protected] 416-481-9795 [email protected] +44 (0)208 981 8151 [email protected] +44 (0)1479 873 167 Sales manager Cassi Lamb [email protected] +44 (0)1962 890 440 Sales executive Amy Spillard [email protected] +44 (0)1962 890 468 reNews Americas costs $299 for a 12-month subscription. A 10-user annual subscription costs $799 and a full (unlimited) corporate subscription costs $1599. state utility took the time to find the right formula before launching more ambitious wind calls. “The first tenders did not create a lot of interest because they awarded some projects to entities that were not ready to develop them, and they didn’t move ahead. “In the next phase, when they demanded an extra level of commitment from bidders, a more serious business sector entered the market and as a result the projects are developing well.” He added: “It is a good signal to see projects under construction. It is just a shame that Uruguay is such a small market.” Get your name in front of key industry decision makers To advertise contact Cassi Lamb [email protected] ISSN 1757-8027
