Latin America: market mechanisms and supply adequacy in power sector reforms

Abstract

The process of transformation in government and operations in the power sector leads to interaction between increasing integrated markets and public agen- cies in charge of policy making, regulation and control. This is examined for Latin America where state and marketing power sector planning, contract auctions to as- sure supply adequacy in an uncertain market environment, cross-border contracts, financing challenges for generation investments, and auctions of contracts to secure supply adequacy in the second stage of power sector reform are discussed. First, the state and market in power sector planning reform and state policies in Latin Amer- ica are considered. Here, present concerns; the state-market relationship (the position of regulation, globalisation, internationalisation), and state market in the energy sec- tor (correction and adjustments) are reviewed. Case studies for Argentina and Brazil are briefly outlined. The paper then examines contract auctions to assure supply ad- equacy in an uncertain energy environment that are being explored to face supply