Renewable Energy forI Electricity Generation in Latin America:NSERIR the FOTOS market, technologies and DE RENOVAVEIS PARA outlook PREENCHER O ESPAÇO BRANCO 2010 Copper Connects Life TM Renewable Energy for Electricity Generation in Latin America Page i EXECUTION Gilberto De Martino Jannuzzi University of Campinas – UNICAMP and International Energy Initiative – IEI, Brazil Odón de Buen Rodríguez Energía, Tecnología y Educación, S.C. – ENTE, S.C., Mexico João Gorenstein Dedecca International Energy Initiative – IEI, Brazil Larissa Gonçalves Nogueira International Energy Initiative – IEI, Brazil Rodolfo Dourado Maia Gomes International Energy Initiative – IEI, Brazil Judith Navarro Energía, Tecnología y Educación, S.C. – ENTE, S.C., Mexico Renewable Energy for Electricity Generation in Latin America Page ii COPYRIGHT © 2010 International Copper Association DISCLAIMER Although this document has been prepared with due care, the ICA and any other participating institution are not responsible for the information and analysis presented, which shall be credited directly to the authors of the study. International Copper Association Latin America Av. Vitacura 2909, Oficina 303 Las Condes, Santiago Chile www.procobre.org Renewable Energy for Electricity Generation in Latin America Page iii Contents 1 CONCLUSIONS AND RECOMMENDATIONS ...................................................................... 1 1.1 GLOBAL FACTORS ............................................................................................................1 1.2 LOCAL POLICY DRIVERS ......................................................................................................1 1.3 PRESENT SITUATION (IN 2009) ...........................................................................................1 1.4 OUTLOOK TO YEAR 2015-2020 ..........................................................................................2 1.5 MOST COMMON POLICIES AND REGULATION .......................................................................... 3 1.6 STAKEHOLDERS ...............................................................................................................3 1.7 MULTICRITERIA ANALYSIS ..................................................................................................4 1.8 GENERAL CONCLUSIONS ....................................................................................................4 1.9 RECOMMENDATIONS TO ICA ..............................................................................................5 1.10 THE TYPES OF ACTIONS/INTERVENTIONS BY ICA. ..................................................................... 5 2 EXECUTIVE SUMMARY ...................................................................................................6 2.1 GENERATION OF ELECTRICITY FROM RENEWABLE SOURCES SITUATION AND OUTLOOK ....................... 6 2.2 THE FUTURE MARKET FOR ELECTRICITY FROM RENEWABLE NON-CONVENTIONAL SOURCES ................. 8 2.3 COPPER QUANTITY ......................................................................................................... 12 2.4 THE REGULATORY SITUATION, INCENTIVES AND FINANCING ...................................................... 12 2.5 PUBLIC AGENTS, MARKET PLAYERS, PARTNERS AND INSTITUTIONS.............................................. 15 2.6 AN ANALYSIS OF THE MOST ATTRACTIVE ENERGY MARKETS IN LATIN AMERICA .............................. 18 3 RENEWABLE ENERGY IN LATIN AMERICA ...................................................................... 20 3.1 CURRENT RENEWABLE SOURCES MARKET AND TRENDS ............................................................ 20 3.1.1 INTRODUCTION ................................................................................................................... 20 3.1.2 EXISTING POTENTIAL............................................................................................................. 20 3.1.3 PROJECTIONS ...................................................................................................................... 23 3.1.4 ARGENTINA ........................................................................................................................ 28 3.1.5 BRAZIL ............................................................................................................................... 35 3.1.6 CENTRAL AMERICA............................................................................................................... 46 3.1.7 CHILE ................................................................................................................................. 52 3.1.8 COLOMBIA.......................................................................................................................... 62 3.1.9 MEXICO ............................................................................................................................. 69 3.1.10 PERU ............................................................................................................................... 73 3.1.11 VENEZUELA ....................................................................................................................... 79 3.2 LEGAL FRAMEWORK ....................................................................................................... 87 3.2.1 ARGENTINA ........................................................................................................................ 87 3.2.2 BRAZIL ............................................................................................................................... 93 3.2.3 CENTRAL AMERICA............................................................................................................. 103 3.2.4 CHILE ............................................................................................................................... 104 3.2.5 COLOMBIA........................................................................................................................ 108 3.2.6 MEXICO ........................................................................................................................... 114 3.2.7 PERU ............................................................................................................................... 115 3.2.8 VENEZUELA ....................................................................................................................... 124 Renewable Energy for Electricity Generation in Latin America Page iv 3.3 PARTNERS AND INSTITUTIONS ......................................................................................... 124 3.3.1 ARGENTINA ...................................................................................................................... 124 3.3.2 BRAZIL ............................................................................................................................. 126 3.3.3 CENTRAL AMERICA............................................................................................................. 127 3.3.4 CHILE ............................................................................................................................... 128 3.3.5 COLOMBIA........................................................................................................................ 129 3.3.6 MEXICO ........................................................................................................................... 130 3.3.7 PERU ............................................................................................................................... 132 3.3.8 VENEZUELA ....................................................................................................................... 134 3.4 DEMAND FOR COPPER .................................................................................................. 135 4 REFERENCES ............................................................................................................... 137 5 ANNEX ....................................................................................................................... 158 5.1 DESCRIPTION OF MULTICRITERIA ANALYSIS ......................................................................... 158 5.1.1 METHOD AND PHASES .................................................................................................. 158 5.1.2 METHOD APPLICATION EXAMPLE ........................................................................................... 161 5.1.3 RESULTS ........................................................................................................................... 170 5.1.4 CONCLUSIONS ............................................................................................................... 181 5.1.5 REFERENCES .................................................................................................................. 181 Renewable Energy for Electricity Generation in Latin America Page v Tables TABLE 1: ADDITIONAL MINIMUM AND MAXIMUM INSTALLED CAPACITY PER SOURCE AND COUNTRY (MW) ....... 2 TABLE 2: ESTIMATED ADDITIONAL COPPER REQUIRED TO MEET PROJECTED ELECTRICITY DEMAND FROM RE TECHNOLOGIES YEAR 2020 (TON) ................................................................................................. 3 TABLE 3: ESTIMATED POTENTIAL OF ALTERNATIVE SOURCES FOR ELECTRICITY GENERATION ............................ 8 TABLE 4: PRESENT INSTALLED CAPACITY AND ESTIMATED ELECTRICITY GENERATION FROM RENEWABLE ENERGY SOURCES (MW) .....................................................................................................................