La República

Reform will enable private participation only in generation

Electric Opening Promote Clean Energy

Natasha Cambronero / This e-mail address is being protected from spambots. You need JavaScript enabled to view it / 07/08/2010

The idea is that companies provide two thirds of the $ 9 billion needed to supply the country over the next decade
The law project shall be presented to Congress in three weeks for approval

Costa Rica bet to be the regional leader in the production of clean electricity. The goal is to eliminate the dependence on oil within a period not exceeding ten years.
That is the purpose of the new framework that will promote power in the country, which brings major reform increased participation of private enterprise in the financing and production of energy, as long as they do with renewable resources.
The country currently employs 8% of electricity based on oil derivatives. The rest is produced based on water, steam, wind or biomass.
The new energy policies were announced yesterday by Laura Chinchilla, president of the Republic, who announced that the draft framework will send a study of the deputies in about three weeks.
The amendment provides an opening only in the production of electricity, but not in marketing, as this task remains in the hands of the eight groups that currently exist.
In this regard, the proposal creates two figures in a wholesale market, a buyer that is where will the Instituto Costarricense de Electricidad (ICE) and the seven public enterprises and cooperatives that operate today to be the only ones responsible for distributing energy to final consumers.
In the other category are the producers formed by international public and private companies wishing to participate which marketed its energy to the previous companies. These groups will not limit production of electricity as it currently exists, but will depend on the needs that have the market.
Something that will make clear the new policy is that priority power supply will be Costa Rica. Just in case there are surplus could be exported.
The award of private projects will be managed by tender process to be developed by the Regulatory Authority of Public Services. The winner will be providing the technical conditions and the lowest price.
"Once the award list, each vendor must sign a long-term contract with each of the eight distributors, in proportion to what each one needs," said Teofilo de la Torre, Minister of Environment, Energy and Telecommunications.
The challenge is that private investors can help increase production of geothermal, wind and hydropower in the country, and encourage the development of electricity through biomass and solar.
It is estimated that to meet demand over the next decade the country needs to double its electricity production, which amounts to saying that you need to install additional 2,400 megawatts. That task would represent an estimated investment of $ 9 billion.
Of this amount, ideally, private capital two thirds contribution either through strategic alliances with ICE or personal investment.
While the remaining third is provided from the budget of the state entity.
Another purpose of the new energy policy is to ensure the universality of electricity, namely to ensure that caters to the whole country. This feature also will be entrusted to the state institute, which also allows you to go out and compete in the region.
To that end, Chinchilla undertook to finance two hydroelectric megaprojects such as Reventazon Diquís (both up nearly 1,000 megawatts), and seek permission for the state company to explore and derive geothermal steam in national parks Corner Old and Tenorio, De la Torre said.
Along with this reform, Laura Chinchilla also plans to run a series of actions within its energy plan for the next four years.
Among the projects is, extending the oil port in Moin and build a terminal in the Pacific.
Increase the storage capacity of the Costa Rican Petroleum Refinery (Recope) and enlarge the system of pipelines.
Similarly, do not rule out construction of a refinery to supply domestic demand, through an alliance between Recope and its Chinese counterpart.
"The construction of the new refinery will depend on whether it is cheaper to refine crude oil in the country, or import their derivatives at once. If the feasibility study says it is the second, then the refinery is not going, "said De la Torre.
Chinchilla's proposal is viewed with great caution by energy producers, believing that a model is rare in the world.
"It seems strange, do not remember opening similar models in other countries, I worry about how these figures will work in practice. But wait and see what the bill says to have a clearer picture, "said Mario Alvarado, CEO of the Costa Rican Association of Energy Producers.