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User-centred energy models in Latin America

Highlights and insights from the 4th meeting of the Global Observatory on Peer-to-Peer, Community Self-Consumption and Transactive Energy Models, GO-P2P.

Article written by Juan Andrés Estrada and Aya Azzahra Jamai.

The global drive to decarbonise is reconfiguring power systems globally, but the form this takes varies enormously between regions.

Latin America’s energy resources and social structures translate into very different solutions to those in other parts of the world. Understanding these differences allows us to learn how future digitalised and demand-driven electricity networks may emerge in different places.

On 12 and 13 July 2021, EIA University (Colombia) hosted the fourth meeting of the GO-P2P dedicated to better understanding how new user-centred energy models are shaped by the Latin American context. About 200 people, from over 25 countries around the world joined this two-day event.

Please see below some information about the Latin American cases presented during day 1 of the event, and some of the most relevant ideas discussed throughout the different sessions.

1. LATIN AMERICAN CASE STUDIES

Colombia

Juan Manuel España, Director of the Transactive Energy Colombia Initiative, and Juan Esteban Hincapié, CEO at NEU Energy, presented their Peer-to-Peer energy trading pilot in Medellín.

The Transactive Energy Colombia Initiative (TEIC) was established by EIA University and University College London (UCL) in alliance with NEU Energy, Empresas Públicas de Medellín (EPM), and ERCO Energía. One of the reasons the project is born is to answer to an identified need of many users to generate their own clean energy. Some of them cannot do so because they live in buildings or have no way of acquiring solar panels. Hence, the main idea behind ​​the pilot is to explore how these users, currently standard consumers, can buy energy from prosumers. They would have access to energy in such a way that they can choose how green, local or what social impact it has.

Chile

Ignacio Santelices, Executive Director of the Energy Sustainability Agency of Chile, presented his case study.

The Energy Sustainability Agency is a non-profit foundation that aims to articulate public and private initiatives to develop projects in three different fronts : energy efficiency, renewable energy, and e-mobility. The progress done by the organisation has shown that cooperation is a key enabler of the implementation of user-centred energy systems in the country.

Their projects are not only meant to clarify the formulation of business plans, but also to give insights for adequate policy development. It is also one of their main objectives to democratise renewables through community-owned projects. These are built on municipal land and are shared between various households. Democratising energy includes making it more affordable, and to do so, the Agency also works on the aggregation of demand and projects co-financing.

Brazil

Kathlen Schneider, Director of the Institute for the Development of Alternative Energy in Latin America (IDEAL), showcased the progress done by some energy cooperatives in Brazil

IDEAL is a private non-profit organisation that promotes renewable energy and the development of policies for energy integration in the region. The Institute currently works with the German Cooperative and Raiffeisen Confederation (DGRV) on a project that tracks distributed energy generation cooperatives. So far, 16 cooperatives with a total capacity of 18.3 MW have been interviewed. Some of the relevant examples are:

  • Coober: a pioneering energy cooperative project, established in 2016, with a capacity of 75 kWp.
  • Compartsol: owned by a third-party investor, established in 2017, with a capacity of 1400 kWp. It distributes energy to 110 houses.
  • Ciclos: established in 2019, with a capacity of 240 kWp.

2. CASE STUDY ASSESSMENT ACCORDING TO GO-P2P SUB-TASKS

Power systems integration: Shafi Khadem, International Energy Research Centre (Ireland)
Hardware, software & data: Brian O’Regan; Fabio Silva, International Energy Research Centre (Ireland)
Transactions and markets: Lynne Kiesling, University of Colorado-Denver (United States)
Economic and social value: Juan Pablo Cárdenas Álvarez, EIA University (Colombia)
Policy and regulation: Lucila de Almeida, European University Institute (Italy)

DAY 1 - GENERAL DISCUSSION POINTS

  1. Power systems integration
  • Latin American countries are currently making efforts towards achieving a sustainable energy transition. In the case of Colombia, the Ministry of Mines and Energy focuses on exploring the role of the end-users to advance this process and the importance of understanding the impact of decentralised energy resources (DERs) integration into power systems.
  • Not only Colombia, but countries like Chile and Brazil, are trying to structure programmes and policies that enable end-users to play a more active role in energy generation. Studying how local energy markets will influence power system flexibility and overall behaviour is a must for researchers.

2) Hardware, software & data

  • The ongoing digitalisation of the energy systems is a key factor to tackle the increasing energy demand in Latin America and the rest of the world. Digital technologies enable a multi-directional data flow, that in turn creates highly integrated energy systems.
  • It is important to take into account that, despite the fact that the technologies to reduce emissions already exist, their large-scale deployment continues to be a key aspect to achieve global climate goals by 2030 and 2050.

3) Transactions and markets

  • Pioneering projects, such as the Transactive Energy Colombia Initiative (TEIC), have focused on exploring the barriers and opportunities related to the adoption of peer-to-peer energy markets. The development of energy trading pilots carried out in this project can inform and work as an example for other programmes and initiatives at the regional level.
  • Chile’s Energy Sustainability Agency has shown how the country’s bottom-up initiatives proved themselves to be useful in promoting the autonomy of users. The agency aims to transform the energy consumer and prosumer into energy managers.

4) Economic and social value

  • Economic development in Latin America has been severely affected by the pandemic. The population living in poverty has increased significantly and the prospects for improvement are not positive. In that sense, transactive and peer-to-peer energy projects must make sense for local communities and be perceived as profitable. In comparison to more developed countries, people in the region have different economic priorities.
  • Community energy programmes in Chile have shed light on the business value of user-centred projects. At the same time, in the case of Brazil, the growing number of community-owned solar farms has fostered social developments and the establishment of new energy technology businesses in the country.
  • Transactive energy models also prove to be very promising because users do not need to install solar photovoltaics on their own roof and can be assigned a consumption tailored to their needs. For the Chilean case, aggregations have helped to reduce costs up to 35%.

5) Policy and regulation

  • Latin American countries need to carry out many more research studies and pilots that allow a better understanding of the barriers and opportunities of adopting user-centred energy models. Policymakers do not have enough information to develop regulatory frameworks that can increase the uptake of these new energy business models in the region.
  • The energy regulation in Brazil has made important progress in the last decade. Policies at the national level have enabled the increase in the number of prosumers and more recently the creation of energy communities. However, one of the biggest challenges for Brazilian policymakers remains the designing of the new tariff without impacting the economic stability of the country.
  • In the case of Chile, the Energy Sustainability Agency articulates initiatives from the private and public sectors that are currently benefitting around 3000 families. This enables to draw the lines of the future regulation in the country.

Day 1 Agenda -Open to all- and presenters’ slides can be found here.

Event recording can be found here.

For more information on the Global Observatory on Peer-to-Peer, Community Self-Consumption and Transactive Energy Models (GO-P2P), click here.

Acknowledgment: EIA University would like to thank the Digital Demand-Driven Electricity Networks Initiative — 3DEN, by IEA, for the support provided to the organisation of this GO-P2P meeting.

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