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The opening of the electricity market

Insist on centralism and protection of ICE is not good policy

We must be open to competition, decentralization and regional market

December 27th,2014

A few days ago, the executive and the ICE reported that they drive the Contingency Bill Power, which has as one of its up 15-30 percent of national generation by the private sector purposes. Instead they proposed no other initiative. Their strategy seems to be, simply, tranquility, arguing that domestic demand through 2019 will be covered by plants in operation or contracted.

Days ago, the Government had also ruled out even discuss formulas to enable geothermal wealth that lies in the basement of some national parks can be exploited with respect for the environment.

Both decisions, inconvenience and myopic in themselves, contradict the announced disposal of the executive to thoroughly discuss options for ensuring long-term supply of electricity, creating conditions for lower prices, expand the sources, to further encourage clean energy and adapt our electricity market to changing national and regional conditions. Instead, reflect a mixture of ideological prejudices and defense of bureaucratic-institutional constituted schemes, resulting in a centralist conception of power generation counter to international best practices and best use of public resources, and lead to put the interests of an entity-the Costa Rican Electricity- over the country in general.

Incidentally, both decisions have been emptied of relevance so-called "forum for dialogue on energy issues" coordinated by the Ministry of Environment and Energy, and raised as a multi-instance, in order to discuss the best options and explore the best solutions to address our challenges and opportunities in the field.

The assertion that domestic demand will be covered over the next four years is, to say the least risky. First, it is possible that the electricity needs increase, if the economy grows more vigorously, or if transportation that used to replace fossil fuels are introduced. Secondly, there is no guarantee that the estimated supply materialize, the projects will be developed as planned (which rarely happens) or meteorological events unexpectedly not affect the ability of dams. Worse, refer only to Costa Rica as the scope of our electricity market, and leave out any consideration the regional space that was created with the interconnection of the Isthmus, is to ignore a new reality, both supply and demand, which could offer great opportunities.

Such a parochial view, in a market that tend to expand geographically increasingly contradicts a recent initiative of ICE, aimed, according to their spokesmen, to sell services to structure and build mega power generation in Central America and the Caribbean. The ICE is not a construction company. It is much more consistent with its focus on being efficient, produce cheaper energy and compete with it in the expanded market mission.

Keep the ceiling of 15% for the private sector will involve further reduce the chances of achieving the goal of becoming un-neutral carbon in the 2021 country and further reduce the incentives or pressures on the ICE to reduce the cost burden unnecessary. Indeed, the announcement of the sale of outsourcing involves recognizing the existence of idle staff, which adds to the economic weight of the entity and, therefore, press to increase the rates.

Far from maintaining a pernicious attachment to outdated models, to protect an entity rather than national interests, and centralism bet instead of diversification, what our country needs, urgently, is another matter. We refer to a transformation of its electricity market to be re really competitive and efficient, offer equal terms to all participants and is able not only to meet the current and future demand, but also to become a generator of foreign exchange through its extension beyond our borders.

Source: "La Nación"

Costly plant hire raises invoice for ICE clients

Entity recognizes and evaluates impact and let charging users in 2014

ARESEP alerted the rapid growth of leases at the Institute

October 11, 2013

The rental cost of power plants is going high bill at the Costa Rican Electricity Institute (ICE) and its customers.

During the past seven years, the average cost for the lease of works grew 40%. The company paid in 2006, ¢ 13.796 million in operating leases and, last year, closed at ¢ 55,624, according to the ICE and the Regulatory Authority for Public Services (Aresep).

The sharp increase is passed on to users and ARESEP is required by law to accept them.

During this year, electricity rates rose by 30%, partly as a result of fuel and operating expenses.

Leases are gaining ground in the cost structure of ICE. Were 15.36% of operating expenses between 2010-2012, and will grow to 19% between 2013 to 2015, says the ICE.

Teofilo de la Torre, chief of the institution, told The Nation that another year will try to load only the value of the depreciation of works, which is a third of rental expense.

Reason. Given the lack of resources to invest, ICE uses financial mechanisms such as trusts or lease credits to build plants.

In the first figure, the state built the Peñas Blancas hydroelectric dams, Tern and Garabito thermal project in Puntarenas Gold Montes.

In the three was used securitization Trusts that issued bonds in the local market, to raise money and do the works. ICE is committed to pay the monthly lease trust and at the end of the contract, the total money.

"Read more"

Top to private electricity generation frustrates 81 projects

This year was reached limit of 15% allowed to non state firms

December 15th,2014

A total of 81 private companies await slated to be chosen by ICE and sell its energy from renewable plants.

But today, this probability is almost zero.

Pending the 81 will be useless until the Costa Rican Electricity Institute (ICE) no new contracts out to tender the purchase, and that will not happen in the coming years-at least not before 2019-.

Why? The 7200 Act (which authorizes particular generation) provides that private can not provide more than 15% of the energy of the National Electricity System (SEN). This 2014, after 24 years of entering SEN, reached the top 28 firms.

Hoping to increase their participation was buried days ago, after the executive and discarded ICE requesting Bill Contingency Electric. This text was intended to raise the ceiling of 15% to 30%, and allow each plant exceed 20 MW.

The rationale of the government was that plants contracted and operating (public and private) have covered the electricity demand until at least 2019.

To spare. In the waiting list for eligibility ICE today include 32 hydroelectric projects; 25 wind; 19 solar-five municipal solid waste or biomass (the latter are exempt from caps by law).

These 81 projects would add a capacity of 1,207 megawatts (MW), nearly half of the installed capacity with currently available to the country, 2,776 MW.

Your offer would be sufficient to power about 2 million households, nearly double those in Costa Rica (1.2 million, according to the Housing Promotion Foundation).

That fourfold the power of water plant Reventazón, the largest capacity in the country.

Each of these plants provide employment to about 25 people, according to Mario Alvarado, chief of the Costa Rican Association of Power Producers (ACOP).

"No limits, private could have much more range in type and size. Interest in clean energy and persists it is competition and the best is chosen, would lower rates, "he said.

Osvaldo Durán, representative of the Conservation Federation of Costa Rica, the waiting list is evidence that energy "is a fabulous business that has made wealthy private firms". And he added: "What enabled the country is flat auction. We will not approve the private and participation; 7200 Act must be repealed. Are unnecessary; even 28 could be replaced private ".