Gas-short thermal generators idled in Colombia
Cartagena-based 314MW TermoCandelaria and Cali-based 205MW TermoValle shut down last week. The plants, which can run on gas or diesel, are owned by US and Chilean private equity funds.
Thermal generators that rely on diesel when gas is unavailable absorbed around $80mn in financial losses from 20 September to 20 October, Colombian generators chamber Andeg tells Argus.
The losses are the result of a price cap on a Ps302/kWh peso ($0.10) scarcity fee in the government-regulated formula for pricing thermal electricity. Operating costs range from Ps450-700 pesos/kWh, says Andeg.
Bogot? subsidizes the thermal generators with a reserve subsidy to ensure their availability during emergencies. Andeg says the subsidy is not enough.
The chamber has been calling on Colombia's energy ministry to adjust the scarcity fee and consider easing the generators? fuel tax.
Trying to quell fears of a blackout, Colombia's energy minister Tomas Gonzalez maintains the country has sufficient power supply to cope with drought associated with the El Ni?o climactic phenomenon, when hydroelectric reservoirs decline and dispatch leans toward thermal generation based on gas and diesel.
Hydroelectric plants usually contribute around 70pc of Colombia's power generation, where thermal units contribute 30pc.
During El Ni?o drought periods, that ratio usually hits 50:50, according to the energy ministry.
Gas is cheaper than diesel for thermal generators, but generators are having trouble nailing down supply in a tight market, an industry executive tells Argus. Some gas at key fields is stranded because of limited gas pipeline capacity.
Colombia produces around 1bn ft3/d (28mn m3/d) of gas, but output is stagnant in the absence of big new discoveries.
Tight gas supply prompted a group of Colombian thermal generators known as Grupo T?rmico, which includes TermoCandelaria, to spearhead a regasification project that is under construction near Cartagena on the Caribbean coast. The project is expected to be completed by the end of 2016.
Additional liquidity could come from neighboring Venezuela. State-owned PdV has said it plans to reverse a cross-border pipeline, through which Colombia used to ship gas to Venezuela, for exports to begin next year.
In the meantime, Colombia will require diesel imports, in spite of the new capacity at state-controlled Ecopetrol's new 165,000 b/d Cartagena refinery Reficar.
Andeg says the demand from thermal generators, coupled with a supply gap in areas once regularly supplied by contraband Venezuelan fuel, are driving up diesel imports. Venezuela started closing its border crossings with Colombia in August in an official effort to stem smuggling and crime.
National diesel demand of around 80,000 b/d, in addition to peak requirements from thermal generators of approximately 55,000 b/d, could bring total demand to 135,000 b/d, according to Andeg.
Most thermal generators are purchasing diesel through distributors that include Chilean Copec subsidiary Terpel and Brazilian state-controlled Petrobras, but at least one generator is importing diesel directly from a US supplier.
Ecopetrol did not immediately respond as to whether it has recently increased diesel imports, but the company has said it is importing around 60,000 b/d of diesel from the US Gulf Coast to cover demand.
Reficar, which is slated to come fully on line by March 2016, will add 89,000 b/d of diesel output on top of up to 60,000 b/d from the 250,000 b/d Barrancabermeja refinery.
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