Presentación Este documento contiene las estadísticas de la industria eléctrica de los países del Istmo Centroamericano, publicación anual elaborada por la Sede Subregional en México de la Comisión Económica para América Latina y el Caribe (CEPAL). El documento se presenta en siete secciones, correspondiendo la primera a los cuadros resúmenes que contienen la información consolidada de la evolución reciente de la industria eléctrica de la región y los resultados reportados durante el 2001. Las siguientes seis secciones corresponden a los reportes por país. Se ha tratado de mantener la uniformidad en cuanto a los cuadros que se presentan en cada país, correspondiendo las diferencias a las relacionadas con la estructura y administración de las transacciones de energía, principalmente en los países que llevaron a cabo reformas en sus industrias de electricidad. La información fue proporcionada por las instituciones oficiales, principalmente por los entes responsables de la regulación de la industria eléctrica y las empresas públicas de electricidad. En algunos casos, las Direcciones especializadas de los Ministerios de Energía también tuvieron una participación importante. De igual forma, fue muy útil el apoyo proporcionado por las instancias encargadas de la gestión de los mercados mayoristas de electricidad que funcionan en cuatro países. Esta publicación también aparecerá en la página de internet de la CEPAL. Se agradecerán los comentarios, observaciones y sugerencias a este trabajo, a fin de mejorar su calidad en las futuras publicaciones. La dirección a la cual pueden dirigirse para este efecto es la siguiente: Comisión Económica para América Latina y el Caribe (CEPAL) Unidad de Energía Presidente Masaryk 29, CP 11570 México, D.F., México Fax: (525) 531-1151 E-mail: email@example.com Página de internet: http://www.un.org.mx SUMMARY This document presents an analysis of the initial conditions, evolution and results of the Wholesale Electricity Markets (WEM) of El Salvador, Guatemala, Nicaragua and Panama. In these countries, the respective legislative Electric Power Acts changed the electricity industry by unbundling" the traditional services of the utilities into functional components. They created new structures and new institutions to allow competition in the generation and some retail areas. WEM were created by the respective Laws and constitute the main mechanism for production assignment between producers and consumers of electric energy. WEM operation and administration (WOA) have been administrated by ad hoc organisms managed by the market agents in El Salvador and Guatemala, or by means of specialized units of the transmission state utilities with stakeholder supervision in Nicaragua and Panama. WEM initiated operations in El Salvador, at the end of 1997; in Panama and Guatemala, during the second half of 1998 and in Nicaragua in 2000. In that way, by the end of 2002 WEM had had four to five years of continuous operation in the first three countries, and two years in Nicaragua. As a result of these power sector reforms, at the end of 2001, the four countries had registered 125 firms in the sector, grouped mainly in the segments of production (55), distribution (26) and transmission (5). There were also 30 large consumers and nine electricity brokers registered. To characterize WEM structures, the study first considers the supply concentration indices for each market (the n-firm concentration ratio, Ri, and the Herfindahl-Hirsham Index, HHI), notwithstanding their inherent limitations for the analysis of supplier market power. A better approximation of price markup is given by the Residual Supply Index (RSI),which measures the residual supply percentage left in the market after taking out the capacity of the biggest firm. Analysis using these indices show that, during the year 2002: a) in El Salvador, the biggest supplier (the state firms CEL-GESAL) participated with 47% (R1) of the market, and the four main producers with 91% (R4); the HHI was 2 999 and the RSI, calculated for the state group CEL-GESAL (which owns greater power capacity), was 99%, indicating a high capacity for price markup; b) in Guatemala, the main producer (the state firm EGEE) participated with 39% of the wholesale market, while the four main producers controled 81% (R4), and HHI and RSI indices were 2 212, and 105%, respectively; c) in Panama the market shows less concentration, with R1, R4 and HHI indices of 29%, 83% and 1 998, the RSI was 118%, still suggesting a significant capacity by the state producer to set marginal prices, and, d) in Nicaragua, the concentration of the wholesale market has an intermediate position with regard to the other countries analyzed; the state firms (considered as a single group) were 40% (R1), while R4 reached the 90%; the HHI index had a value of 2 567; while the RSI was 142%, which indicates a lower price markup capacity for the major producer. Other structural topics analyzed include technology and antiquity of generating plants. During 2001, the indigenous source (hydroelectric and geothermal) proportion was 51% in Panama and El Salvador, 45% in Guatemala and 16% in Nicaragua. The rest of the energy was produced by thermal plants (steam generation and small internal combustion and gas turbine power stations). Only Guatemala and Nicaragua have small proportions of cogeneration, produced partially with sugar cane. With respect to antiquity, El Salvador has the oldest steam generation park (34 years average), while Guatemala has the youngest one (only nine years), internal combustion and gas turbine have low antiquity in two countries (three to five years) and intermediate antiquity is prevalent in the other two countries (12 to 17 years). In El Salvador, the spot market has shown greater dynamism, with higher participation with respect to the neighboring countries. During the period of analysis, the transactions in this market represented 23% of the wholesale sales, while in the others countries the spot market accounted for 13.6% in Guatemala, 13.1% in Panama, and 4.2% in Nicaragua. The behavior of spot market prices is analyzed in detail in the study, including the spot price time series, on a hourly base, with the respective calculations of basic statistical indexes. The mean monthly prices are substantially higher in El Salvador, while the other three countries have lower and less dispersed prices. For example, during the year 2001, the lowest average prices were registered in Guatemala (43 dollars/MWh), followed in ascending order, by Nicaragua (44.3 dollars /MWh), Panama (51 dollars/MWh) and El Salvador (63.9 dollars/MWh). During the first half of 2002, this spread has been maintained. Greater spot prices in the Salvadorian WEM owe to the fact that bids include implicit electric energy and capacity prices, while in the other countries, bids only correspond to marginal production costs. However, other structural factors influence the differential (reduced number of agents in the Salvadorian WEM) and explain the interactions between Guatemala and El Salvador WEMs, where agents in the first country have made significant sales, in the forward market and in the spot or real time market. In the future, the entrance of new players (suppliers and big consumers) and the growing transactions in the regional electric market, should reduce the differences among the spot prices of the WEMs in the Central American region. In order to study the spot price dispersion, for each WEM and each year (or semester), price duration curves were constructed. Comparisons using four prominent bands of prices (0-50; 50- 100; 100-150, and more than 150 dollars/MWh) were carried out, identifying the proportions and shares for each price band, as well as the maximum and minimum values of each year or semester. For 2001, relevant results include the following: a) prices lower than 50 dollars/MWh are observed 83% of the time in Nicaragua, 79% in Guatemala, 53% in Panama and 48% in El Salvador; b) the price band between 50 and 100 dollars/MWh appeared 46% of the time in Panama, 35% in El Salvador, 20% in Guatemala and 16.6% in Nicaragua; c) prices between 100 and 150 dollars/MWh marked the Salvadorian spot market 17.2% of the time, while these prices were reached only for very few hours in the other three WEM (1.5% in Guatemala, 0.4% in Panama and 0.3% in Nicaragua), and d) with the exception of four hours in El Salvador, the price threshold of 150 dollars/MWh was not reached. This last result can be considered an important advance, taking into account that the Salvadorian spot market surpassed this threshold 18% of the time during 2000. The document includes a discussion on spot price volatility, which is generally a controversial topic, given the characteristics of electricity markets. This discussion related differences in the behavior of electricity, to differences in market structure across the four WEMs. For every period studied, smaller price volatility was registered in Panama, followed very closely by Nicaragua. El Salvador and Guatemala have substantially greater price volatility. During the periods studied for each market, the monthly average volatility registered in the four WEMs was 1.02, 1.14, 1.39 and 2.22, respectively."