Partie 2 ou 3 Nouvelle conomie lectrique - Centre International de ...

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Partie 2 ou 3 Nouvelle conomie lectrique - Centre International de ...

- 25 -process of being realised had to be suddenly stopped following the cessation of paymentsfor their existing equipment.The contracts concluded in dollars with Take or Pay clauses, which admittedly have apowerful risk limitation function for the independent operators, raise both risk and costs forthe buyer and its guarantors. Therefore the Single Buyer model with its long term contractsappeared to be a very sub-optimal solution when several conditions are not fulfilled. It hasbeen seen that difficulties can arise through three main problems: the prevention of riskassociated with the Take or Pay clause; the credibility of the single buyer and its mandatedresellers -- the distributors -- for raising the income needed to cover the PPA prices, and thecurrency risk that persists in long-term contracts associated with the purchase of equipmentand fuel requiring settlement in currencies.These difficulties invite to reexamine the alternative of staying with the institutionalframework of the reformed public company, which would keep their upstream verticalintegration and the monopoly on sales. However, what would be the conditions for restoringtheir borrowing capacity on the local and international capital market? The minimumprerequisite would be partial control of private businesses over the company which is giventhe function of Single Buyer and over the distributors, in order to distance the publicauthorities. A second condition would be the direct contracting of distributors with theindependent producers. That is not all there is to it, however.3.2.2 An hybrid path: a combination of “single broker” and contract marketWhen the three difficulties can be overcome, how can one resort to the Single Buyer modelwith some variants? Indeed in some emerging countries, this model may perform firstlybecause the institutional environment which creates incentive to performance for thedistributors assumed to purchase electricity from the single buyer: the distribution is partlyprivatised and the regulator applies regulation processes that reflect costs (with the exceptionof social tariffs that have a clearly defined scope). Secondly, the problem of the currency riskis lessened in countries where there is still a significant potential of hydroelectric resources tobe developed, that lessens dependency on fuel imports. This may also apply to countriesdepending on fuel resources not paid for in currency and at opportunity cost, where access tothe fuel resources is restricted to national and public energy companies. If the country also hasa national electrical equipment industry, the currency risk associated with the independentproduction contracts could be contained if the local financial market has sufficient room tobear the greater part of the financial needs from electricity investors in national currency.Brazil and to some extent Mexico find themselves in this situation, in which the single buyermodel, or a similar model combining a central wholesale buyer and distributors, could workwell.Faced with the third difficulty, that of organising the development of large investments withlong lead-times in a context of irregular economic growth, the scheme defined in Brazil in2003 (PSR, 2003; Medidas Provisoria 144-145, 2003) raised some interesting reflections. Itfocuses on security of supply in the long term. To do this, the scheme is based on acombination of official mid term (five-year) and long term (ten- and twenty-year) anticipationscenarios which will be sliding scenarios, taking account of equipment realisation periods.at the end of 1997 and saw the price of electricity under these IPP purchase contracts rise to US$0.085/kWhwhile their average sale price remained blocked at US$0.02 in 1998-1999 (World Bank, 1999).incentives inv elec north south energy policy.doc created by Dominique Finon on 14/05/2004printed by JQ on 12/22/2004 at 11:43 25/31

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