Panama: Control of Electricity Market

The private sector warns about the market concentration that the Corporation AES could have if it wins the tender for 350 MW, where it presented the lowest bid.

Thursday, September 3, 2015

In a letter sent by the Chamber of Commerce, Industries and Agriculture to Energy Secretary Victor Urrutia, it was indicated that according to the law, "... no market agent can apply for awards if the same exceeds 25% of national energy consumption. " If Natural Gas del Atlantico, a subsidiary of AES Corporation, wins in the bidding for 350 MW of thermal energy, "... AES group would have 177 thousand MW in the country or 73% of current demand."

"... According to the union, competition is a fundamental pillar of any market and 'we are concerned that the results of this tender may lead to players in our market holding a position of market control. We believe there is a risk that an actor can reach beyond the limit of concessions and generation licenses . '"

Prensa.com reports that "... On top of the tender organized by the Empresa de Transmisión Eléctrica, S.A. (Etesa) this Monday received 27 proposals. One of the companies that offered the lowest price was Gas Natural del Atlántico, a subsidiary of AES Corporation. This makes it the potential winner of the tender, which would allow it to build a plant based on natural gas with a capacity to generate 400 MW. "

The manager of AES Panama, Miguel Bolinaga, said that currently the company complies with the law because of all the generators that it operates provide 24% of national consumption daily, that is to say, below the limit of the restriction. Moreover, he says that this restriction does not apply to natural gas plants because it is a different technology than that used in hydroelectric and geothermal stations as established legally. The restriction would apply the moment AES requested a concession for a hydroelectric plant, which then would cause it to exceed 25%. "



More on this topic

Monopolistic Practices in the Electricity Market Denounced

October 2015

In Panama two companies who took part in the tender for 350 MW announced that they will appeal to the Supreme Court to denounce alleged monopolistic practices by AES, the entity which won the tender.

The companies Panamá Power Corp (IPPCO) and Pentacles Energy S.A. have turned to the Supreme Court after not receiving answers from the Electricity Transmission Company (ETESA) and the National Authority of Public Services (ASEP) after having submitted an application for consideration.

AES Corporation Wins Tender for 350MW

September 2015

Its subsidiary Gas Natural Atlantico won the contract to supply power for 10 years from 2018, after submitting the lowest price out of 27 bidders.

The company was chosen by the Electricity Transmission Company, SA out of a group of 27 bidders who submitted offers in the tender, even though they were warned about the possible dominant position of AES Corporation, as "...

$100 million Pipeline Construction Being Assessed

April 2015

The company AES is studying the feasibility of expanding the Andrés terminal in the Dominican Republic in order to export liquefied natural gas and build a pipeline with capacity to generate 1,000 MW of energy.

For the expansion of the terminal at Andrés an $25 million investment is estimated, while for pipeline construction the company AES plans to invest $100 million.

El Salvador: Tender for 350MW Declared Void

March 2012

The process was unable to be completed after the withdrawal of offers from firms with capacity to generate electricity required.

The company DelSur on Monday declared void the tender for the generation of 350 MW, equivalent to one third of the El Salvador’s national demand, which it had planned to contract out for 15 years from 2016.