Javier Bustos: PMGD generation must be developed at efficient costs

PRESS RELEASE from Acenor
January 15, 2024

(Machine translation of original release, issued in Spanish)

The talk “Regulation of PMGDs” was held in person and online. Challenges for the market and free competition, organized by the Faculty of Law and the Faculty of Engineering and Sciences of the Adolfo Ibáñez University. In this context, the executive director of ACENOR, Javier Bustos, participated in a conversation panel with representatives of different unions and institutions.

On the occasion, Javier Bustos expressed that from the point of view of electricity customers we raise the question: “Why do we want a regulation that promotes Small Distributed Generation Means (PMGD) or stabilizes their prices? We have an objective as a country that is carbon neutrality, sustainable development, going from a middle-income country to a developed country through processes that are sustainable. And what do customers need for that? A supply that is safe, quality, renewable and at competitive prices. That is the fundamental thing and therefore distributed generation has to be a useful tool for these purposes.”

The energy transition will be feasible, Bustos explained, to the extent that we make it as cost-efficient as possible. Because if we have distortions in the different segments of the electrical system, finally, "the cost of electricity will not allow us to electrify consumption that we are making today based on fossil fuels and therefore there will be no decarbonization, nor carbon neutrality."

“The focus should not only be how we are going to increase renewable generation capacity but how we are going to do it at competitive prices so that demand can change,” said the representative of free customers, adding that distributed generation is a very useful tool. important that it can help us to the extent that it is cost efficient.

We need a system that has appropriate price signals. If 4,000 MW are advancing in PMGD when demand is 10,000 MW during the day, in a situation where demand is growing little, at rates of 1 or 2% in the short term, we will have a mismatch if the price signal is not adequate, stated Javier Bustos, who provided figures: “When it is said that PMGD generation saves network infrastructure, it is a charge that could be three times what is being paid for national transmission and there is obviously something that It is distorted.”

“It is urgent that we do something about this issue. Today, the stabilized price charge is the main systemic charge for two consecutive months, reaching almost 7 dollars per MWh, while the cost of the entire Complementary Services market (SSCC) is at 3 dollars per MWh and the technical minimums at 4 dollars per MWh. Therefore, decisions must be made quickly, otherwise there are investment projects to produce low-emission steel, cement or copper that will be postponed or taken to another country. The industrial manufacturing sector in Chile employs 20 times more than the electricity sector in Chile, if this generates a cost to the rest of the country, it causes a problem and that is what must be put on the table," concluded the executive director of ACENOR. .

Paulo Oyanedel, head of the Competition Monitoring Unit of the National Electrical Coordinator , also participated in the talk; Eduardo Bitran and Rodrigo Castillo, both academic directors of the Master in Regulation at the UAI; Darío Morales, executive director of Acesol ; Ana Lía Rojas, executive director of Acera ; José Tomás Morel, Studies Manager of the Mining Council and Carolina Zelaya, former prosecutor of the CNE and partner of ZeBra Energía SpA.

You can watch the full talk here: https://youtu.be/tzt4WdGQiRc?feature=shared