INTEGRATION and Electrical SECURITY in Latin America
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INTEGRATION and electrical SECURITY in Latin America Organization: Nivalde José de Castro Rubens Rosental Integration and Electric Energy Security in Latin America Integration and Electric Energy Security in Latin America Editors: Nivalde José de Castro Rubens Rosental 1st Edition Oficina de Livros Rio de Janeiro 2017 Integration and Electric Energy Security in Latin America/ editors: Nivalde I61i J. de Castro and Rubem Rosental – Rio de Janeiro: Oficina de Livros, 2016. 255p. ; 23 cm. Article and Thesis collection 1 . Electric Enery ---- Latin America ---- Security. 2. Latin America ---- Electric Energy --- Public Security Policy 3 . Global Warming ---- Public Policies. I. Castro, Nivalde J. De, org II Rosental, Rubens, org. CDD 333. 793298 Systemical cathalog Index 1. Usina Hidrelétrica: América Latina Hydro Power Plant: Latin America 2. Aquecimento Global: Políticas Públicas Global warming: Public Policy ISBN: 978-85-61843-65-6 Director This report was prepared as Christian Hübner the result of work sponsored by the EKLA-KAS. It does not Project Manager necessarily represent the views Karina Marzano of the EKLA-KAS or its em- ployees. The EKLA-KAS and its employees make no warrant, express or implied, and assume no legal liability for the infor- mation in this report. Index Presentation EKLA-KAS ..........................................................................5 Foreword ..................................................................................................8 Introduction ............................................................................................9 Itaipu Dam’s Legacy: Inspiration for the Future .......................................11 Marcel Biato Legal and institutional energy integration models: Comparison between European Union and Mercosur .............................35 Eleonora Mesquita Ceia / Willian Gonçalves Ribeiro Constraints and Perspectives of the Energy Integration in South America ....................................................................................61 Marcel Biato / Nivalde José de Castro / Rubens Rosental Electricity Markets Regional Integration: Conceptual Basis, Potential Benefits and Opportunities for the Southern Cone ...................73 Dorel Soares Ramos Brazil-peru energy integration: History, Challenges and Future Perspectives.............................................97 Paula Franco Moreira Energy integration in MERCOSUR: Itaipu Binacional emblematic case .........................................................136 Thauan Santos and Luan Santos Brazilian energy integration in Latin America: History, current situation and perspectives..............................................159 Nivalde José de Castro / Roberto Brandão / Rubens Rosental / Paola Dorado Energy Integration in South America: Experiences, Potential Benefits, Fears and Challenges ............................199 Ricardo Raineri Presentation EKLA-KAS Dr. Christian Hübner1 Freedom, justice and solidarity are the basic principles underlying the work of the Konrad Adenauer Foundation. The KAS is a political foun- dation, linked to the Christian Democratic Union of Germany (CDU). With more than 80 offices abroad and projects in over 120 countries, our goal is to make a unique contribution to the promotion of democracy, the rule of law and a social market economy. To foster peace and freedom we encourage a continuous dialog at the national and international levels as well as the ex- change between cultures and religions. Alongside the country-specific programmes provided by the KAS coun- try offices in Latin America, there are cross-border regional programmes with distinct thematic focuses. One of these is the Regional Programme of Energy, Security and Climate Change in Latin America (EKLA) which has its headquarters in Lima, Peru. The regional programme EKLA has been designed as a dialogue platform, in order to provide impetus for political decision-making processes. The programme understands itself as a consultative centre for the coordination of the individual KAS country pro- jects on Latin America ,supporting these projects with its network and ex- pertise on the subject. Assuming the role of an initiator and consultant, it aims at complementing the country programmes activities by means of regional networks and the provision of know-how, thus, enhancing their impact. The programme organizes events on the regional level where experts and partic- ipants from the Latin American countries have the opportunity to exchange ideas. The global economy and society faces enormous ecological challeng- es. There is a need to react to climate change and the shortage of resourc- es, as well as to the growing demand for energy, especially in emerging countries. Over the past years KAS has already embraced these issues, however, the enormous importance and the urgency of reacting to these demands led to the establishment of EKLA-KAS, which is able to focus on these subjects. The Latin American region is ideal for the implemen- 1 Head of EKLA-KAS 5 tation of environmental projects due to the great availability of green energy sources such as sun, water, geothermal energy, wind, and biomass. Exploring and developing this potential will help Latin America to satisfy its growing energy demand. In order to exploit the full ecologic poten- tial of the continent, it is necessary to understand the current state of environmental policies in Latin America. Hence, the KAS supports this study, organized in cooperation with our partner, the Electricity Sector Research Group (GESEL, in its Portuguese acronym) of the In- stitute of Economics of the Federal University of Rio de Janeiro (IE/UFRJ), aiming to facilitate the access to information. A better un- derstanding of the peculiarities of the Integration and Electrical Se- curity in Latin America opens up a whole new range of opportunities for cooperation and exchange of best practices. Within the framework of this project, an international seminar took place in Rio de Janeiro, Bra- zil, in which energy experts, politicians and businessmen from different countries could share experiences and opinions. It is our understanding that a paradox lies behind the energy crisis the world is currently undergoing. On the one hand, greater energy supply is required to ensure continuous economic growth and social development on a global scale; yet, on the other hand, it is imperative to reduce greenhouse gases emission so as to mitigate their impact on global warming. Overcoming this dilemma requires a new global energy model, which in turn calls for a new emphasis on greater use of renewable and non-polluting energy sources. This will be a drawn out and costly process, requiring all countries to ac- knowledge their profound interdependence. Such a collective commitment will ensure the necessary financial resources to bring on stream the required projects. Even more important, this new understanding will enable the syn- ergy required for meaningful scientific exchange and research on energy pol- icies and planning in line with this new paradigm. We hope that this book aids the process of further increasing electrical integration in the region, based on renewable sources. It is believed that this is a strategy that will bring security for the transition to a low-carbon energy mix, allowing mitigating climate change while promoting sustain- able social and economic development. The main goal is to offer subsidies and proposals for the authorities responsible for energy policy and for the members of the legislative branch to formulate and implement public policies for the integration and electrical security in Latin America. We 6 would like to thank GESEL for the partnership in the composition of this document, as well as all the researchers and authors who contributed to this publication. We wish you all a pleasant reading! 7 Foreword Brazilian electric sector institutional model allows for the development of projects related to binational hydro plants, and also treats the issue of ener- gy imports and exports through interregional connections. We already have some successful examples, as in the case of Itaipu hydro plant, and the elec- tric interconnections with Argentina, Uruguay and Venezuela. On the other hand, a great effort will have to be made in order to take full advantage of Latin Americas hydroelectric potential, as well as to enable firm energy in- terchange among the countries. This would provide benefits to consumers of the countries involved in the projects that would be developed. The book addresses many alternatives created and the responsible institu- tions, with special attention to the legal, regulatory, technical and commercial aspects which should be considered. In addition this work also suggests the referrals necessary to turn binational hydro plants enterprises possible, as well as the achievement of energy exchange between neighboring countries, with special emphasis to those projects in which Brazil would be involved in. However, I consider that regulatory, commercial and technical obstacles might be overcame, due to the different institutional frameworks of each country’s power sector, which essentially, should be preserved. Therefore, I have no doubts about the need of gradually develop- ing the energy integration between the countries, taking advantage of the opportunities of already existing interconnections, initially developing ex- change arrangements which respect the autonomy of each country, sharing benefits, in the sense of achieving