Bolivia

Solar Bolivia

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Bolivia has a high energy potential, both for traditional and alternative energy.

Given its geological nature, the country produces more natural gas than oil (62% of total liquids produced from condensed).

Its natural gas reserves are the second largest in South America (after Venezuela), but considering those that are liquids free, they are the first. Besides, it is expected that they will increase by 200 to 300 trillion cubic feet.

This is the basis for the Bolivian economy. The country has export contracts with the countries that surround it. For example, Brazil has a contract for 30 million cubic feet per day for 20 years.

The power sector accounts for 63% of natural gas sales.

The electricity generated in Bolivia comes from hydroelectric plants (35%) and thermal power stations (65%).

The National Interconnected System (SIN) is 90% composed by the main centers of production and consumption (La Paz, Cochabamba, Oruro, Potosi, Chuquisaca, Beni and Santa Cruz) and by isolated systems in smaller cities and towns that complete the remaining 10% of the national electricity market (Department of Pando).

Bolivia is determined to change its energy matrix, which currently is based on thermal generation.

Authorities have repeatedly pointed that their goal is to achieve a mix of 70% of power generation by hydroelectric or from alternative sources such as wind and solar, and limit thermal to the remaining 30%.

Therefore it targets to incorporate around 183 MW of renewable energy by 2025.

Two thirds of Bolivia, whose latitudinal position is between the parallels 9º 40′ S and 22º 53′ W, are situated within the range of greater solar radiation.

Thanks to this situation, the country has one of the highest levels of solar intensity in the region.

Solar incidence in the country reaches an annual average of 5,4 kWh / m² per day of intensity and 7 h/day of effective insolation.

However, perhaps because of the high availability of natural gas, Bolivia currently has no regulations and legislation that fosters sustainable development for solar installations.

Argentina

Solar Photovoltaic Argentina

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The Argentine photovoltaic market is segmented into 3 types of applications:

1- Rural uses.

The demanded equipment are for electrification of rural housing posts (50W-80W); lighting systems (30W-100W); to feed water pumps that replace the traditional multi-blade mills (50W-400W).

2- Professional or business purposes.

Providing energy to telecommunications systems (100W – 400W), telemetry, markings, signage, highway emergency systems (20W – 50W), cathode protection and pipeline shutoff valves (over 20kW).

3- Institutional demand.

Includes social assistance programs, power regulating entities, organizations and state (provincial) energy companies. Equipment requests for lighting and electrification of schools, medical centers, police stations and residential users. Powers between 50W and 400W.

Until the year 1999 the demand for PV modules remained steady between 20% and 50% annual growth. From that year on, and especially after the devaluation in 2001, demand for these modules has suffered a sharp decline that has begun to reverse since 2004.

There is no domestic solar modules manufacture.

With approximately 1 to 2 MW of installed power per year, mainly in isolated applications, it seems that the only way for this market to grow is through the development of large-scale projects.

In conclusion: government authorities have not learned the lesson taught elsewhere.

Efforts should be focused on distributed systems’ installation and integration of PV in urban environments, developing residential, secondary and tertiary sectors.

The future of a solid and consistent solar PV sector clearly requires the development of:

1) A limited number of grid connected big projects.

2) Encouraging installations on residential and businesses roofs on the basis of a net metering or feed-in payment.

Currently there is no feed-in payment for solar residential electricity.

There are purchasing agreements granted in the solar electricity program GENREN of US$ 572 / MWh (Three times the average of the PPA agreements awarded in the rest of Latin America).

In the city of San Juan, a facility that used a combination of fixed and followers, polycrystalline, mono-crystalline and amorphous silicon cells structures was inaugurated in 2012.

It has 1.2 MW and has become the first solar photovoltaic plant connected to the national network of integrated power system in South America.

At domestic levels, investment in a solar PV system is recovered in about 5 years compared to a fuel generator.

Compared to the electricity network, the figures are radically different.

The electricity network has an approximate price of US$ 47 per MWh against US$ 142 solar MWh.

In other words, solar electricity costs triple the network. In this scenario, the solar investment would be recovered in 98 years (more than 3 times the equipment’s life).

The paradox is that according to an analysis by the Environmental Protection Agency of the City of Buenos Aires (APRA) each MWh that adds to the country, provided by thermal power plants, costs US$ 344.

Therefore, thermal power plants (the majority in country’s energy matrix) are selling to end users 7 times cheaper than the actual cost of producing and transporting electricity.

In addition to this, about US $ 15,000 million annually are used to import fuels.

In short, lack of common sense and any planing.

If the electricity price of other cities within the region (Santiago, Montevideo and San Pablo) was paid in Buenos Aires, the solar system investment would be recovered in 12 years.

From 2016, we will see if political change in the country will lead to the end of energy crisis and sustainable development of solar photovoltaic energy.

Argentina

Solar Thermal Argentina

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In terms of solar thermal energy, Argentina has entered a process of incorporating this technology taking the construction sector as an engine for market development, in absence of laws and regulations to boost it.

There are isolated initiatives. In fact, there are municipalities with Bills or solar ordinances, such as the city of Rosario.

But we could say that the field of solar thermal energy in Argentina is still in diapers.

Up to today, year 2015, there are no comprehensive measures of solar resources available, equipment have not been subjected to testing or certification and have no market sector statistical information.

Generally thermo-siphon systems are installed for DHW heating in houses and townhouses where there is no access to the gas network. Equipment for pool heating are also installed.

A 2009 estimate indicates that around 2,000 m² (about 22,000 ft²) of collectors were installed that year and were about doubled in 2010, reaching 4,000 m2 (about 43,000 ft²).

Flat collectors then constituted 2/3 of the market with a large proportion of domestic products, being vacuum tubes the most imported collectors.

In 2015, it is calculated that above 30,000 m² (around 323,000 ft²) collector capacity was installed; half of them for heating outdoor pools.

Most companies in the sector are located in the Central Region (mainly in Buenos Aires) and the Northwest Region is the one with the largest area of collectors installed, followed by the Northeast.

How could this technology’s sustained development be boosted ?

As far as the public sector is concerned, it would require:

– Elimination of the competitive disadvantage caused by high subsidies for electricity and gas network.

– Standards sanctioning and incentives creation.

– Set an example by incorporating solar systems in its infrastructure facilities.

As for the private sector, it would require:

– Introducing improvements in product quality.

– Training skilled labor on sizing and system design, installation and maintenance.

– Facing the additional challenge of foreign competition, in some cases, with equipment at a lower cost and better performance than those of domestic manufacturing.

Only in the residential sector, there is an estimated potential of 6 million m2 (about 65 mill ft²) for the production of DHW; 2.2 million m2 (around 24 mill ft²) in the public, commercial and services sectors, plus a significant potential in the industrial sector.

Considering 20 years of useful life for a thermal solar system, full investment could be recovered in about 15 years in Buenos Aires province, for instance, when compared with actual price of gas network and considering its level of insolation.

However, in cases of bottled gas and electricity, solar thermal power technology is already profitable in many parts of the central and north regions of the country.

Compared with bottled gas, investment in solar thermal systems could be recovered in 2 years.

Compared with the use of an electric water heater, investment in solar thermal systems could be recovered in about 5 years.

A consistent solar thermal market would provide several benefits to the country:

– Reduction in conventional energy demand.

– Reduction in energy imports

– Reduction of greenhouse gases’ emissions.

– Creation of a new industry sector and new jobs.

– Creation of a national industry sector with high added value.

Argentina

Solar Argentina

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In 1992, Argentina divided the public electricity sector in generation, distribution and transmission, and sold it to private investors.

When the 2001-2002 economic crisis shook the country and its currency was devalued, the government, fearing the political cost an electricity price increase would cause, froze natural gas prices and end users tariffs in 2002.

The solution worked in the short-term, but stopped the exploration of new energy sources and investment in infrastructure improvements by foreign investors.

The national natural gas extraction declined, leaving power generation facilities unused and increasing energy imports.

With the economic recovery, demand for energy soared by an average of 5% a year since 2003.

Enarsa was created in 2004 with the primary mission of exploring and extracting hydrocarbons, oil and natural gas; plus transportation and distribution of these resources. However, power failures remain a problem.

Argentina has invested heavily in a renewable resource: water. This resource accounts for about 35% of electricity, so a greater diversification is necessary to avoid the problems a severe drought would cause.

Oddly enough, judging by the development it has taken so far, Argentina is one of the countries with the highest potential for renewable energies.

Argentina could supply all of its electricity consumption with renewable energy, and could even become a net exporter.

In 2006 the regulatory framework was established with the enactment of Law 26.190/06, giving renewables a national interest. It was set as a target for 2016, that Argentina should reach 8% of electricity generation from renewable sources.

Current figures indicate that in 2016 it will barely exceed 2%, achieving, therefore, only a little more tan 25% of the objective.

In 2009, the national government launched with Enarsa (the public energy company) the GENREN program, which offered to buy 1.000 MW of renewable energy by 15-year fixed contracts.

In June 2010, after an exhaustive analysis, the winners were announced and a total of 895 MW were approved.

Most of the bids were for wind energy.

Even though the central and northern parts of the country enjoy many sunshine days throughout the year that would allow many applications to take advantage of solar energy, only 20 MW photovoltaic solar energy projects were granted in the province of San Juan.

Economic instability in recent decades contrasts with the expected energy crisis in which Argentina is sinking ever more rapidly.

With rates that do not reflect the true cost of resources nor the need for investment and a subsidies policy that will soon come to an inevitable end, renewable energies gain a value that they never had before.

Uncertainty about the availability and value of energy in the future is a question that only the state can solve with energy planning and implementing public policies, promoting energy efficiency and clean energy.

Solar Energy

Who makes business with solar energy ?

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The attempt to answer this question leads us to understand the development level achieved by this technology and exposes the dark side of the energy matrix in, except isolated cases, most countries.

We must take 2 points of view:

1) Distributed Solar Generation (Intelligent Network)

Distributed Solar generation is business for the consumer and for the country’s economy.

On the consumers’ side, it allows them to generate their own energy and to buy energy from distributors only if their demand exceeds their energy generation capacity.

For the country’s economy, because it increases their energy sovereignty and promotes job creation (professionals, installers, equipment suppliers and related sectors).

2) Centralized Solar Generation (Conventional Network)

Centralized Solar generation is business for energy generating and distributing companies and for political parties.

For generation and distribution companies, because they continue controlling the energy business.

For political parties, because they get funding and returns from generating companies and energy distributors and because it is much easier to “cut deals” with just a few than doing serious long-term work, creating a regulatory framework that truly encourages distributed generation and that benefits both citizens and the country’s economy.

Solar energy’s competitive advantage is that it can be generated in the place where it is consumed, making distribution unnecessary and eliminating all energy losses that its transport causes.

Efforts should focus on distributed systems installation and solar energy integration in urban environments, developing residential, secondary and tertiary markets.

The ups and downs suffered in European countries (the most representative case is the photovoltaic sector in Spain) that have given prominence to large-scale projects, indicate that that is not the right way and that it only benefits a few.

The future of a solid and consistent solar energy sector clearly entails:

1) A limited number of specific centralized generation projects on soil that has no other purpose and in areas with very high levels of solar radiation (e.g. semi-desert areas).

2) Encouraging installations on individuals’ and companies’ roofs.

3) Distributed generation’s development due to energetic efficiency and continuity in supply (catastrophes, terrorist attacks, warfare).

Political parties and energy generating and distribution companies have been throwing spanners in the works and the latest trick they have pulled out of their hat is charging very high “access fees” to those who have a solar generator connected to network.

This has caused surreal situations in which fines on those who generate their own power are applied or that make it more profitable to continue with the centralized generation and distribution’s “status quo” rather than investing in solar energy.

The real paradox is that most of the infrastructures exploited currently by energy generation and distribution companies were originally State assets.

Private or private with state participation companies that currently operate these infrastructures they received have well amortized them already.

They have done little to modernize them and are reluctant to invest in modern transmission networks and interconnected bidirectional measurement equipment.

What should be clear is that the future of the energy sector is the energetic efficiency, the distributed generation and the renewable energies incorporation.

These should be the 3 objectives to pursue.

While new players, technologies, situations and settings will appear; regulations or policy should encourage progress towards these 3 objectives or they will not be doing their job.

Regulation should be implemented “ex ante” and must be updated “ex post” according to the energy sector’s development, distributed generation growth and renewable energies incorporation degree.

For countries that want to seriously work for their citizens and their economy there are vast examples of regulatory frameworks that can be taken as a starting point and adapt to each country’s reality.

For example, the Spanish CTE (Technical Building Code) in case of solar thermal energy and several US states’ legislation in case of solar photovoltaic energy.

Solar Photovoltaic Energy

Solar PV Latin America

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Latin America generates about 7% of the world’s electricity and non-traditional sources account only for 6% of the energy mix.

It is expected that by 2050 over 20% of the electricity generated in the region will come from non-hydro renewables.

May the contribution of photovoltaics be significant?

This technology has great potential in the region, but is still marginalized to the background among the countries’ energy choices and many times what is done about it is just to “stand” and very little is accomplished.

Compared to the rest of the world, the rate of solar photovoltaic energy implementation in Latin America is very low.

Annually the installation of about 100 GW of solar photovoltaic energy is expected worldwide and usually only 1% corresponds to this region.

However, the fact of not having been one of the pioneer regions where the development of this technology began will allow learning from other regions or countries mistakes.

We must distinguish between solar industrial development (manufacturing of modules and other components) and solar energy (solar electricity).

Solar industrial development in the region has difficulties with the sharp drop in solar modules’ prices.

In contrast, solar electricity production is favored by the fall in modules prices and makes solar photovoltaic energy more competitive.

The average cost of 1 W of installed solar PV has dramatically dropped in recent years and most projections indicate that this trend will continue. The underlying costs associated with solar photovoltaic energy will also continue to decline.

PV installed capacity of Latin American countries has always been oriented to isolated applications to meet the needs of rural populations without access to electricity network.

Only after 2014 solar photovoltaic projects began to attract capital.

Latin America has 51 solar photovoltaic plants in operation and 625 MW of installed PV in 2014, compared to 133 MW in 2013. They have announced 23 GW projects, 5,2 GW in contracts, 1,1 GW under construction and 722 MW in operation.

From GTM Research consultancy recent studies show that the installed capacity in MW has increased 370% in 2014 and is expected to rise 237% in 2015.

This figure could be revised downwards following the price collapse that has rocked the oil industry and the commodity sector in recent months.

Today, in Latin American countries with good levels of radiation and without large subsidies in the energy market, the model of solar PV is self-sustaining.

In some cities in Mexico, Brazil, Chile and Peru, the solar PV cost is situated very close to grid parity.

Countries like Costa Rica, Guatemala, Mexico, Panama, Dominican Republic and Uruguay already have national laws and regulations in place for connecting photovoltaic generators under the net metering system.

The most suitable places to locate large plants are the deserts near the Pacific coast and northeastern Brazil.

Over the next 20 years it is expected that the investment in solar photovoltaic energy per year will reach about U$S 100.000 million worldwide.

A forecasted development of 3,5 GW is estimated in Latin America by 2016.

Could this be possible?

To know it, we are going to do a country-by-country analysis because there are very different realities.

Solar Thermal Energy

Solar Thermal Latin America

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Solar thermal energy for domestic applications is a mature technology that has been successfully developed in many countries for over 30 years.

It is not well understood why its underdeveloped compared with photovoltaics while almost double its performance.

It is a relatively simple technology that already has small and medium manufacturers in countries of the region such as Argentina, Uruguay and Brazil. However, there is still no certification at regional level as in Europe.

In the Caribbean nation of Barbados 80% – 90% of households have solar energy equipment on their roofs. This country ranks in the top 5 global installed capacity per capita.

There are no reliable data concerning the installed capacity in Latin America.

The most recent global estimate dating from 2012 and informs an installed capacity of 234 GWth. Brazil is among the top 7 countries with about 4 GWth (2%).

The Latin American regional market is slowly developing.

In parallel, there is an emerging incipient regulatory framework for certifications that are mainly based on regulatory frameworks of Europe and the US. COPANT is working on the unification of the regional framework of standards and certifications.

One of the main barriers to the development of solar thermal energy are important subsidies that some countries in the region granted to conventional energy.

Professionals and companies in the solar energy industry of Latin America and the Caribbean met recently in San Jose, Costa Rica, to promote the development of this technology in the region.

The meeting was made by IRENA (International Renewable Energy Agency), OLADE (Latin American Energy Organization), ICE (Instituto Costarricense de Electricidad) and the German Metrology Institute (PTB).

According to the Innovation and Technology Department of IRENA, currently the region only takes advantage of 3% of its solar thermal potential.

The most important conclusión we arrived is that the region has great potential for development of solar energy in residential and commercial areas, but experience shows that to achieve this, we must build confidence in this technology.

How is this achieved ?

Proposals were:

1) Develop mechanisms to ensure the quality of the facilities (standards and inspections)

2) Encourage best practices among professionals and companies (testing and certification)

3) Implement government policies that promote genuine development of this technology

The global analysis of the development programs of solar thermal energy estimates a worldwide installed capacity of 1,600 GWth in 2030 and 3,500 in 2050 GWth.

Will be Latin America an important player in this global installed capacity growing ?

To know that, in next deliveries we will discuss solar thermal sector of each country in the region.

Solar Energy

Solar Energy in Latin America

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Before evaluating the solar potential of the region, we will expose some macro variables.

Latin America includes Argentina, Bolivia, Brazil, Chile, Colombia, Costa Rica, Cuba, Ecuador, El Salvador, Guatemala, Haiti, Honduras, Mexico, Nicaragua, Panama, Paraguay, Peru, Dominican Republic, Uruguay and Venezuela.

It has 22.222.000 km2 (approximately 13.5% of the planet’s land surface) and more than 600 million inhabitants.

The region has a remarkable political and economic diversity and is unstable because of the continued monetary policy focus shift.

Currently, in Latin America 3 types of economic systems are recognized.

The capitalists, with open economies that rely on the free market and free trade agreements. Some of these countries are Peru, Chile, Mexico, Colombia, Panama and Costa Rica.

Countries that, even though argue having an open structure to the world, are clearly protectionists, with a social market or mixed economy. Some of these countries are Argentina, Uruguay, Brazil, Ecuador, Bolivia and Paraguay.

Finally there are a few countries that maintain closed economies with little regard for free market and with a clear tendency to Marxist models. This is the case of Cuba, Venezuela and Nicaragua.

The largest economies by GDP are Brazil, Mexico, Argentina, Colombia and Venezuela.

The most developed in terms of GDP per capita are Chile, Argentina and Uruguay’s economies.

Let us analyze the solar resource available in the region.

Solar energy is evenly distributed, since much of the region lies within the so called ‘Sun Belt’ region presenting the highest solar radiation; with the exception of specific sites, it is a predictable and reliable resource.

What is the main advantage of solar energy over other renewable energies?

Solar energy has a higher degree of integration into the urban environment.

Roof facilities take advantage of idle surfaces to generate clean energy. The country that manages to focus its efforts on such facilities’ development will have the key to its own, and its inhabitants’, energy sovereignty.

Another important factor is that solar installations can be performed by local workers, reducing dependency on technology developers and equipment suppliers (mostly manufactured outside the region). This eliminates the link between the equipment’s sale, installation, commissioning, operation and maintenance; unlike it happens with other renewables.

With some of the best solar resources in the world, Latin America has great opportunities.

Some reasons to be optimistic:

1. Good levels of solar radiation in the region

2. Sustained downward trend in solar systems components’ prices

3. Technology with high potential for generating local employment

4. Increasing public environmental awareness

5. Convenience for many countries to reduce dependence on oil and its derivatives

6. Political will is evidenced by governments of some countries in the region

And some outstanding issues:

1- Investment in modern interconnected transmission networks infrastructure and bidirectional measurement equipment

2- A larger financial market to support solar technology long-term development with loans

3- Legal uncertainty and economic instability in some countries of the region

In upcoming deliveries we will analyze the thermal and photovoltaic solar energy domestic applications’ situation in the region.