Market mechanisms and supply adequacy in the second wave of power sector reforms in South America

Abstract

South America is facing important challenges in electricity supply to allow for future economic development. Current electricity market designs are being reviewed to avoid supply difficulties and couple with existing outlook of primary energy resources and investment interest by the private sector. Examples of these developments are the giant Brazil, the economically troubled Argentina, and the pioneer of electricity reform, Chile. While Brazil and Chile progress into a second stage of reforms with public PPA auctions in a private environment, Argentina makes a backward movement to significant state intervention, as in the times previous to reform. This presentation describes and analyzes these diverging approaches, through which these countries are relying to ensure sufficient capacity and investment to reliably serve their growing economies