DISPERSED RURAL POPULATION ELECTRICITY SUPPLY PROGRAM OF ARGENTINA

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DISPERSED RURAL POPULATION ELECTRICITY SUPPLY
PROGRAM OF ARGENTINA

• Lic. Aldo FABRIS
• Coordinator for RD
• Energy Secretariat
• Ministry of Economy and Public Works and Services
• Finansol 98 - ALBUQUERQUE

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ELECTRICITY SERVICES IN SOUTH CONE OF LATIN
AMERICA
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THE PROBLEM/ARGENTINA

• Between 2.5 y 3 million people with no
  electricity services.
• Relatively high number of public services with no
  electricity supply (schools, first aid medical
  centers, water services, etc.).
• Electricity supply by grid extension not possible
  due to high extension costs by new incorporated
  user.

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DISPERSED RURAL POPULATION WITHOUT ELECTRICITY
SERVICES BY STATE (THOUSAND OF INHABITANTS)
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PREVIOUS ELECTRICITY SUPPLY EXPERIENCE WITH
RENEWABLES

• SEVERAL STATES INSTALLED DIESEL GEN-SETS,
  MICRO-HYDRO, PV SYSTEMS AND WIND SYSTEMS.
• IN ALL CASES SYSTEM MAINTENANCE WAS CARRIED ON BY
  THE USERS AND/OR THE STATE OWNED ELECTRICITY
  UTILITIES.
• FACTORS FOR FAILURE
• LOW TECHNOLOGY KNOWLEDGE.
• LOW PRIORITY OF THE USERS WITHIN COMPANY PROGRAM.
  
• NO SYSTEM MAINTENANCE.
• FINAL RESULT
• PEOPLE CHARACTERIZED RENEWABLES TECHNOLOGY AS
  UNRELIABLE.

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DIAGNOSIS

• RENEWABLE ENERGY (SOME OF IT, TYPICALLY SHS)
  TECHNOLOGIES ARE ELECTRICITY SUPPLY READY BECAUSE
  THEY ARE
• TECHNOLOGICALLY MATURE.
• ECONOMICALLY COMPETITIVE.
• SOCIALLY ACCEPTED.
• THE MAIN DETECTED PROBLEM IS SUSTAINABILITY DUE
  TO PROGRAMS WITH A STRONG EMPHASIS IN SOCIAL
  WELFARE NOT LOOKING FOR MEDIUM/LONG TERM ISSUES
  THAT DO NOT CARE OF
• LONG TERM MAINTENANCE AND PARTS REPLACEMENT.
• PEOPLE TECHNICAL TRAINING.
• ECONOMIC SUSTAINABILITY OF SUPPLY.

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ELECTRICITY SUPPLY PROGRAMGOAL AND PREMISES

• PROVIDE MINIMUM ELECTRICITY SERVICES TO DISPERSED
  RURAL INHABITANTS AND RURAL SERVICES (LIGHTS AND
  SOCIAL COMMUNICATIONS) USING THE MOST ECONOMIC
  TECHNOLOGY.
• SHARED RESPONSIBILITY
• USERS (THE PAY A TARIFF IN ALL CASES)
• STATE GOVERNMENTS (THEY USE THEIR ELECTRICITY
  PROMOTION FUND PARTIALLY FOR THE PROGRAM)
• FEDERAL GOVERNMENT (ASSIST THOSE STATE IN WHICH
  THE LOCAL AVAILABLE FUND ARE NOT SUFFICIENT
• ELECTRICITY SERVICES PROVIDED BY PRIVATE
  CONCESSIONAIRES WHOSE INCOME IS ENOUGH TO RUN THE
  BUSINESS UNDER PREVAILING ECONOMIC CONDITIONS IN
  THE PRIVATE SECTOR.

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ELECTRICITY SUPPLY PROGRAMGOALS

• REACH WITH ELECTRICITY SERVICES TO 1.400.000
  INHABITANTS (315.000 users) and 6000 PUBLIC
  SERVICES WITH SEVERAL TECHNOLOGIES. MOST OF THESE
  SERVICES RENEWABLE ENERGY TECHNOLOGIES WILL BE
  USED.
• MINIMUM TARIFF TO USERS OF ABOUT 15 A MONTH.
• MINIMUM SERVICES QUALITY IS OF ABOUT 4 KWh/MONTH.
  
• WORKING POSITIONS IN THE PRIVATE SECTOR ARE
  CREATED.

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FINANCING

• FIVE YEARS PROGRAM
• TARIFAS A USUARIOS(1) 147.000.000
• FONDOS ESPECIALES (2) 113.000.000
• FONDOS ADICIONALES 54.000.000
• TOTAL 314.000.000
• (1)VALOR PRESENTE NETO DE BALANCE DE TARIFAS
• (TARIFAS - COSTOS DE OM ) 10 - 20 AÑOS
• (2)FONDOS EXISTENTES SECTOR ELECTRICO (FCT)

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WORLD BANK RESPONSE

• RENEWABLE ENERGY PROJECT IN RURAL MARKET (PERMER)
• FIRST PHASE UP TO 10 STATES
• WB LENDING TO THE ARGENTINIAN GOVERNMENT OF ABOUT
  U 40 MILLIONS.
• GEF SUBSIDY (CO2 MITIGATION) OF AROUND U 13
  MILLIONS.
• VERY IMPORTANT TECHNICAL ASSISTANCE PROGRAM TO
  OVERCOME THE BARRIERS FOR THE INTRODUCTION OF
  RENEWABLES.
• WB PARTICIPATION GIVES TO THE GOA INITIATIVE
  CREDIBILITY WORLD WIDE.
• CREDIT NEGOTIATION IS IN THE FINAL PHASE.

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PRESENT SITUATION/ 1

• DISPERSED MARKET OF SALTA PROVINCE.
• PRIVATE CONCESSIONAIRE SINCE SEPTEMBER/96.
• 18000 POTENTIAL PRIVATE USERS.
• 500 PUBLIC SERVICES TO BE SUPPLIED WITHIN FIRST 3
  YEARS.
• MAXIMUN TARIFF STRUCTURE FIXED.
• BIDDING IN COMBINATION WITH THE CONCENTRATED
  MARKET WITH CROSS DEFAULT PUNISHMENT.
• WINNER UNION FENOSA EXCEL GROUP.
• AROUND 200 SCHOOLS UNDER CONSTRUCTION.

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PRESENT SITUATION/ 2

• DISPERSED MARKET OF JUJUY PROVINCE.
• PRIVATE CONCESSIONAIRE STARTING IN DEC/96.
• INVESTMENT GROUP
• JOINT OFFER WITH CONCENTRATED MARKET ALTHOUGH
  CLEARLY IDENTIFIED.
• CROSS DEFAULT STATEMENT
• 6500 POTENTIAL PRIVATE USERS.
• 300 PUBLIC SERVICES.
• 14 SOLAR VILLAGES
• 100 SCHOOLS REPOWERED
• NOW BUYING 600 SHS FOR PRIVATE USERS.
• AUTOMATION OF 5 EXISTING MICRO HYDRO.

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PRESENT SITUATION/ 3

• RIO NEGRO MARKET
• 8000 PRIVATE POTENTIAL USERS.
• PRIVATE CONCESSIONAIRE OF GRID MARKETS USE AN
  OPTION TO PROPOSE A CONTRACT AND TARIFF STRUCTURE
  TO ATTEND THE DISPERSED RURAL MARKET.
• THE STATE GOVERNMENT IS BEING ASSESSED BY
  CONSULTANTS OF THE WB PROGRAM FOR PRIVATE COMPANY
  PROPOSAL EVALUATION.
• LA RIOJA MARKET
• IS UNDER NATIONAL AND INTERNATIONAL TENDER FOR
  THE ELECTRICITY AND WATER RURAL MARKETS.

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RESUME

• MOVE FROM EQUIPMENT SUPPLY TO ELECTRICITY SERVICE
  CONCEPT.
• MOVE FROM PROGRAM OR PROJECTS THINKING TO LONG
  TERM BUSINESS THINKING.
• BUILD UP GOVERNMENTAL SUPPORT FOR THE IDEA. LOOK
  FOR GOVERNMENT PRIORITIES.
• WORK WITH THE ENERGY SECTOR.
• FINANCING INSTITUTION PARTICIPATION ADDS VALUE TO
  THE INITIATIVES.
• IF YOU HAVE A BUSINESS, FINANCING IS NOT A HEAVY
  PROBLEMS. MAY TAKE SOME TIME, BUT IT IS POSSIBLE.

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FOR MORE INFORMATION

• INTERNET
• http//www.mecon.ar/energia/energia.htm
• afabri_at_mecon.ar.

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MUCHAS GRACIAS POR SU ATENCION

• FIN