Gas-short thermal generators idled in Colombia

2 thermal power plants within Colombia have been idled upon financial losses tied to increasing diesel generation, raising stress on the government to avoid blackouts as natural gas materials dwindle.

Cartagena-based 314MW TermoCandelaria and Cali-based 205MW TermoValle shut down last week. The vegetation, which can run on gas or even diesel, are owned through US and Chilean private equity finance funds.

Thermal generators which rely on diesel when fuel is unavailable absorbed about $80mn in financial losses through 20 September to 20 Oct, Colombian generators chamber Andeg tells Argus.

The deficits are the result of a price cover on a Ps302/kWh peso ($0. 10) scarcity fee within the government-regulated formula for prices thermal electricity. Operating expenses range from Ps450-700 pesos/kWh, states Andeg.

Bogotá subsidizes the actual thermal generators with a book subsidy to ensure their accessibility during emergencies. Andeg according to the subsidy is not enough.

The actual chamber has been calling on Colombia's energy ministry to adjust the particular scarcity fee and think about easing the generators´ energy tax.

Trying to quell predictions of a blackout, Colombia's power minister Tomas Gonzalez keeps the country has sufficient power to cope with drought associated with the Este Niño climactic phenomenon, whenever hydroelectric reservoirs decline as well as dispatch leans toward energy generation based on gas and also diesel.

Hydroelectric plants generally contribute around 70pc associated with Colombia's power generation, wherever thermal units contribute 30pc.

During El Niño drought periods, that ratio typically hits 50: 50, based on the energy ministry.

Gas is less expensive than diesel for heat generators, but generators are experiencing trouble nailing down provide in a tight market, a market executive tells Argus. A few gas at key areas is stranded because of restricted gas pipeline capacity.

Republic of colombia produces around 1bn ft3/d (28mn m3/d) of gasoline, but output is flat in the absence of big brand new discoveries.

Tight gas source prompted a group of Colombian arctic generators known as Grupo Térmico, which includes TermoCandelaria, to spearhead a regasification project which is under construction near Cartagena on the Caribbean coast. The particular project is expected to become completed by the end of 2016.

Additional liquidity could originate from neighboring Venezuela. State-owned PdV has said it plans in order to reverse a cross-border canal, through which Colombia used to deliver gas to Venezuela, with regard to exports to begin next year.

At the same time, Colombia will require diesel imports, in spite of the new capacity in state-controlled Ecopetrol's new one hundred sixty five, 000 b/d Cartagena refinery Reficar.

Andeg says the need from thermal generators, along with a supply gap inside areas once regularly given by contraband Venezuelan fuel, tend to be driving up diesel imports. Venezuela started closing the border crossings with Republic of colombia in August in an official work to stem smuggling along with crime.

National diesel requirement of around 80, 000 b/d, in addition to peak specifications from thermal generators of around 55, 000 b/d, might bring total demand to be able to 135, 000 b/d, based on Andeg.

Most thermal power generators are purchasing diesel via distributors that include Chilean Copec subsidiary Terpel and B razil state-controlled Petrobras, but a minumum of one generator is importing diesel powered directly from a US provider.

Ecopetrol did not immediately react as to whether it has recently improved diesel imports, but the organization has said it is importing close to 60, 000 b/d regarding diesel from the US Gulf of mexico Coast to cover demand.

Reficar, which is slated to come completely on line by March 2016, will add 89, 000 b/d of diesel outcome on top of up to 60, 000 b/d from the 250, 000 b/d Barrancabermeja refinery.

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