Arguing that due to the pandemic it is not feasible to call a public tender, the bidding processes for 400 MW to be contracted to cover the long-term demand of three distributors were suspended in Guatemala.
At the beginning of the year, it was reported that before the end of the first quarter of 2021, the National Electricity Commission (CNEE) had planned to call the public tender in which 400 MW would be put out to bid.
In Guatemala, the distribution company Energuate appealed the resolutions of the National Commission of Electric Energy, arguing that the losses because of social conflict were not considered in the authorized tariffs for the next five years.
The controversy began after the National Commission of Electric Energy (CNEE) approved the Non-Social Tariff and Social Tariff Sheets for the 2019-2024 period, which stipulate the final prices of electric energy service for users of Distribuidora de Electricidad de Occidente S.A. -DEOCSA- and Distribuidora de Electricidad de Oriente S.A. -DEORSA-. See CNEE newsletter.
In Guatemala, the upward trend shown by tariffs in 2018, because of the 10% drop in hydroelectric generation and the increase in production with coal and oil derivatives, could continue this year.
The National Commission of Electric Energy (CNEE) reported that last year energy tariffs increased between 5% and 7% in the three largest distributors: Eegsa, Deocsa and Deorsa.
In the last ten years the use of renewable energy has doubled in the country, and currently sources of generation of this type represent between 65% and 70% of national consumption.
According to the authorities at the National Electricity Commission (CNEE), the stability that has been achieved in electricity rates and the lower dependence on oil derivatives, is due to the fact that the country is consuming more energy generated through renewable sources.
The private sector demands more actions from the government to solve the problem of restrictions on the sale of energy in the regional network, imposed by the Regional Operator.
Since October and to date the Regional Operator Entity (EOR) of the Siepac has disconnected Guatemala from the regional network on several occasions, preventing local generators from exporting their surplus to other countries in the region.
In the coming weeks an international tender will be launched to provide firm capacity and associated energy in order to meet demand in 2017.
Authorities at the Energy Regulatory Commission of Honduras (CREE) explained that it has not yet been defined how many MW will be in the tender, but "... in the electrical industry they are working on it being 180 MW in order to meet demand in 2017", reported Laprensa.hn.
In order to replace the contracts that will soon come to an end electricity distributors are preparing to launch tenders in the coming months for the supply of 380 MW.
It is expected that in the coming months approval will be given by the National Electric Energy Commission (CNEE) for the distributors Empresa Electrica de Guatemala (EEGSA) and Energuate to start the tender processes.In the case of the first entity, the tender will serve to replace a contract with the San Jose plant, which provides 120 MW.
According to the CNEE the current available power will be able to supply the market for more than 15 years, even in a scenario with increasing demand, therefore it is not recommending new tenders in the short term.
The 'Conclusions' section of the document "Indicative Plans for Generation and Transmission 2016" by the National Electric Energy Commission (CNEE by its initials in Spanish) :
Non social tariffs for the period February-April 2016 represent for the EEGSA a reduction of 2%, while for DEOCSA and DEORSA there are no variations.
From a statement issued by the National Energy Commission (CNEE):
This rate adjustment is calculated based on power purchases made by the Distributors, EEGSA, DEOCSA and DEORSA during the months of October to December 2015.
The sustained fall in oil prices has led to record lows on the price paid by Guatemalan wholesalers for energy in the spot market.
The spot price paid by wholesalers in December went down by 12.5% compared to what was paid in the same month in 2014, totaling $41.55 per MW. According to the National Energy Commission (CNEE) and the Wholesale Market Administrator (AMM), it is the lowest amount paid in the last six years.
The drop in oil prices has made clean energy less profitable, going from 30%, in previous years to 12%.
The approval of the General Electricity Law passed in Guatemala ten years ago encouraged a boom in the generation and transmission of electricity in the country, including from renewable sources. In the past five years, 28 new hydropower stations of over 5 MW were set up.
Due to delays in some of the projects where contracts had been signed to supply power starting from May 2015, Energuate will be receiving bids in March in order to replace part of that supply.
Bids will be received in late March and in the adjudication of these 180 MW of power the lowest price offerings will be favored. Among the projects which have been delayed are Energía del Caribe (120MW) and the hydroelectric stations Tres Ríos (5MW) and San Luis (6.56 MW).
Between 2007 and 2014 the share of energy generated from renewable sources in the energy matrix of the country increased from 50% to 64%, led by hydropower and biomass.
At the end of 2014 records showed that 951.7 MW was generated by hydropower, equivalent to 37% of the national electrical grid. Additionally, 101 MW of generated by wind power was consumed and 88 MW generated by solar energy.
In the tariff schedule from February to April and the EEGSA Social Rate and Non Social rate will go down by 10%, rates for Energuate and Deocsa will go down by 1%, and rates for Deorsa will go down by 7%.
With this adjustment, the new rates per kW / h will be; for EEGSA, $0.19, Deocsa $0.26, and Deorsa $0.25. These rates will come into effect for the period from February to April and it is expected that this trend will continue with the start-up of plants which are under construction, such as Jaguar Energy.
An announcement has been made in Guatemala that the coal power plant will start operating partially in May, as it is estimated that only one of the two generating units will be ready by that date.
Star Energy, the firm responsible for overseeing the project, announced that there is little chance that the two generating units will be operational in May. However, the first unit will be contributing 140 MW to Energuate by that date.