1 / 31

Regulatory Challenges at the National and Continental Level

Regulatory Challenges at the National and Continental Level. Camput 2005 Quebec City, Canada. Dionisio Pérez-Jácome Comisión Reguladora de Energía. Index. 2004-2005 Update Energy Industry Challenges North America Energy Regulation: Coordination Issues Final Remarks. 2. 2004-2005 Update.

koen
Download Presentation

Regulatory Challenges at the National and Continental Level

An Image/Link below is provided (as is) to download presentation Download Policy: Content on the Website is provided to you AS IS for your information and personal use and may not be sold / licensed / shared on other websites without getting consent from its author. Content is provided to you AS IS for your information and personal use only. Download presentation by click this link. While downloading, if for some reason you are not able to download a presentation, the publisher may have deleted the file from their server. During download, if you can't get a presentation, the file might be deleted by the publisher.

E N D

Presentation Transcript

  1. Regulatory Challenges at the National and Continental Level Camput 2005Quebec City, Canada Dionisio Pérez-JácomeComisión Reguladora de Energía

  2. Index 2004-2005 Update Energy Industry Challenges North America Energy Regulation: Coordination Issues Final Remarks 2

  3. 2004-2005 Update 3

  4. 2005 highlights of the Mexican Natural Gas Industry • Production 4.63 bcfd • Consumption  5.91 bcfd • Power Generation 36% Industry 22% • Pemex 40% Other 2% • Imports  1.28 bcfd • Private investment allowed in transportation, storage and distribution 4 • Source: Natural Gas Prospective, Secretariat of Energy, 2004-2013

  5. Natural Gas permits granted by CRE 5 • Source: CRE

  6. Cross border capacity and new pipelines potential • Cross-border pipelines capacity is close to 3 Bcfd • Cross-border pipelines capacity is close to 3 Bcfd • There is a large potential for new pipeline projects, particularly in the Pacific coast, directly related to new LNG terminals and new IPPs • The potential for new pipelines projects is enormous, specially in the Pacific Rim and is directly related with LNG teminals and Power plants 6

  7. 2005 Highlights of the Mexican Power Industry • Installed capacity  50,676 MW • 2004 power generation  205 TWh • National Transmission Grid 57,622 miles (>115kV) • Strong presence of state-owned vertically integrated monopolies 7 • Source: Electricity Prospective, Secretariat of Energy, 2004-2013

  8. Electricity permits granted by CRE 8

  9. North America Electricity Interconnection Infrastructure 800 MW WECC 200 MW 36MW ERCOT 100MW 80MW 120MW Total Interconnection capacity: 1,336MW 100 MW 200 MW 9 • Source: Electricity Prospective, Secretariat of Energy, 2004-2013

  10. Legal Certainty in Power Generation • On 2003, the Mexican Federal Congress Controller carried out two special Audit Procedures related to the legality of private generation permits granted by CRE. It concluded that: • The permits did not comply with several laws and regulations, and contravened the spirit of the Mexican Constitution • The Federal Government submitted a Constitutional Dispute arguing that all permits fully comply with the legal framework • On April 12, 2005, the Supreme Court of Justice ruled an order in favor of the Executive branch ruling the annulment of the audits results, thus providing full legal certainty to private power projects 10

  11. Energy Industry Challenges 11

  12. During the next ten years, demand for Natural Gas is expected to grow by 5.8% annually, while supply is expected to increase at a rate of 2.5% per year To meet growing demand Mexico needs to increase production and further diversify imports Natural Gas Forecast bcfd Historic Forecast 9 9.3 bcfd 8 Demand Deficit: 3.8 bcfd 7 Imports 5.5 bcfd 6 5 4 3 Supply 2 1 2013 1995 1997 1999 2001 2003 2005 2007 2009 2011 • *Source: Natural Gas Prospective, Ministry of Energy, Mexico 2004-2013 12 • Source: Natural Gas Prospective, Secretariat of Energy, 2004-2013

  13. Challenges in Natural Gas Strategy Challenges • Increase Domestic Production • PEMEX Fiscal Regime • New legal schemes for non-associated natural gas E&P Satisfy Domestic Demand Reduce Domestic Prices Promote LNG Terminals Increase pipeline interconnection infrastructure Improve Permitting Process Achieve Open Access in PEMEX Pipelines 13

  14. Challenges in Natural Gas Strategy Challenges • Increase Domestic Production • PEMEX Fiscal Regime • New legal schemes for non-associated natural gas E&P Satisfy Domestic Demand Reduce Domestic Prices Promote LNG Terminals Establish economically efficient tariffs Improve Permitting Process Keep market references & promote hedging schemes to mitigate volatility Achieve Open Access in PEMEX Pipelines Implement Federal subsidy to assist low income residential consumers 14

  15. Challenges in Natural Gas Strategy Challenges Satisfy Domestic Demand Reduce Domestic Prices Simplify Regulations Improve Permitting Process Open hearings to address stakeholders concerns Improve Federal / State / Local Government coordination Achieve Open Access in PEMEX Pipelines 15

  16. Challenges in Natural Gas Strategy Challenges Satisfy Domestic Demand Reduce Domestic Prices Improve Permitting Process Implement open access regulation Introduce further regulations to reduce PEMEX market Power Achieve Open Access in PEMEX Pipelines Promote competition in Natural Gas Trading 16

  17. Not Associated Natural Gas Investments Record Investments in E&P have reverted the decreasing trend in production, but have not been enough to meet national demand Investments (USD million) Natural Gas Production (Mcfd) • Source: Pemex, Direction of Corporate Finance and Oil Indicators, 2003 17

  18. Electricity Forecast Power demand is expeced to grow by 5.6% per year over the next ten years 350 National Electricity Demand (TWh) 300 Increase rate=5.6% 250 200 Self supply and cogeneration 150 100 IPP’s and Public Monopolies 50 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 18 • Source: Electricity Prospective, Secretariat of Energy, 2004-2013

  19. Power Industry Investment Requirement for 2004-2013 To satisfy demand, the Power Industry will requiere investments of more than USD 52 billion over the next ten years 19 • Source: Electricity Prospective, Secretariat of Energy, 2004-2013

  20. Challenges in Electricity Strategy Challenges Promote private investment in generation that does not require Government financial back up Satisfy Domestic Demand Develop sufficient Transmission and Distribution infrastructure Efficient Prices Develop more power interconnections Power Quality Power Dispatch Promote Renewable sources 20

  21. Challenges in Electricity Strategy Challenges Satisfy Domestic Demand Strengthen CRE to give it the mandate to set economically efficient electricity tariffs Efficient Prices Power Quality Power Dispatch Promote Renewable sources 21

  22. Challenges in Electricity Strategy Challenges Satisfy Domestic Demand Efficient Prices Strengthen CRE to give it the mandate to set Power Quality Regulation Power Quality Power Dispatch Promote Renewable sources 22

  23. Challenges in Electricity Strategy Challenges Satisfy Domestic Demand Efficient Prices Power Quality Strengthen CRE to give it the mandate to approve generation dispatch rules Power Dispatch Promote Renewable Energy Sources 23

  24. Challenges in Electricity Strategy Challenges Satisfy Domestic Demand Efficient Prices Power Quality Power Dispatch • Implement regulations to foster renewable sources of energy: • Capacity payments & energy bank • Renewable Sources of Energy Bill Promote Renewable sources 24

  25. North America Energy Regulation: Coordination Issues 25

  26. CRE- FERC letter of intent In November 2004, CRE and FERC signed a Letter of Intent to enhance interagency coordination on cross-border energy projects. Among the main issues considered in the Letter of Intent are: • Sharing of information to facilitate the effective application of the respective regulatory frameworks • Coordination among agencies to promote the public interest • Increasing communication and cooperation among agencies 26

  27. Security and Prosperity Partnership of North America On March 2005, Presidents Fox and Bush and Prime Minister Martin established the Security and Prosperity Partnership of North America, in order to promote growth, competitiveness and quality of life This partnership is divided in three major groups: i) Security, ii) Political relationship and iii) Prosperity and Quality of Life. Different working groups have been created to accomplish specific tasks One of the objectives of the third group will be to strengthen energy markets in North America and to guarantee a reliable energy supply in the long run, as well as to promote investments in energy infrastructure and foster new technologies A report is being prepared and it is expected to be ready by the end of next June CRE is currently participating in this project 27

  28. Other Coordination Mechanisms CRE participates in the North America Energy Working Group (NEAWG) and holds quarterly meetings with FERC and NEB to discuss common regulatory issues CRE plans to join NARUC in the near future 28

  29. Final remarks 29

  30. What keeps me, as a regulator, awake at night?

  31. www.cre.gob.mx

More Related