Regional Power Integration : Structural and Regulatory Challenges

The Central America Regional Electricity Market (MER) trades electricity and transmission capacity among six Central American countries: Costa Rica, El Salvador, Guatemala, Honduras, Nicaragua and Panama. The market differs from other electricity markets worldwide because it has its own regulatory body and system operator. Economic integration of the Central American countries has followed a natural evolution. The continuous increase in the demand for goods and services has been accompanied by political and institutional arrangements leading to the materialization of commercial and trade agreements aimed at benefiting the nationals of all the integrated nations at the lowest possible cost. This is particularly true in the electricity sector, which provides a key development service for the achievement of sustainable growth. In fact, electricity integration through cross-border power trade has been discussed by the Central American countries since the late 1970s. This report analyzes the progress of the Central American integrated electricity market, including the institutional, legal, regulatory and contractual framework of the MER and of each of the six national markets. It then identifies the main barriers that will have to be addressed in order to ensure a successful evolution to full operation of the Central American Electrical Interconnection System (SIEPAC) interconnection system and achieve true market integration.

Bibliographic Details

Main Author:	World Bank
Language:	English
Published:	World Bank 2011-01-01
Subjects:	ACCESS TO CAPITAL, APPROACH, ARBITRATION MECHANISMS, ARBITRATION PROCEDURES, AUCTIONS, AVAILABILITY, BALANCE, BID PRICE, BIDDING, BIOMASS, CAPITAL COSTS, CLIMATE, CO, COAL, COAL PLANTS, COLORS, COMMERCIALIZATION, COMMON MARKET, COMPETITIVE BIDDING, COMPETITIVE BIDDING PROCEDURES, COMPETITIVE PROCESSES, CONCESSIONS, CONTRACT MARKET, CONTRACT PERIODS, COSTS OF ELECTRICITY, DEBT SERVICING, DEMAND GROWTH, DIESEL, DIFFERENTIAL PRICING, DISTRIBUTION CHARGES, DISTRIBUTION COMPANIES, DOMESTIC MARKETS, ECONOMIC DEVELOPMENT, ECONOMIC GROWTH, ECONOMIC INTEGRATION, ECONOMIES OF SCALE, EFFICIENCY GAINS, EFFICIENT POWER PLANTS, ELECTRICITY, ELECTRICITY CONSUMERS, ELECTRICITY CONSUMPTION, ELECTRICITY DEMAND, ELECTRICITY DEMAND GROWTH, ELECTRICITY GENERATION, ELECTRICITY INDUSTRY, ELECTRICITY LAW, ELECTRICITY PRICE, ELECTRICITY PRICES, ELECTRICITY PRODUCTION, ELECTRICITY SALES, ELECTRICITY SECTOR, ELECTRICITY SUPPLY, ELECTRICITY SYSTEMS, ELECTRIFICATION, ENERGY CONSUMPTION, ENERGY CRISIS, ENERGY INFORMATION ADMINISTRATION, ENERGY INTENSITY, ENERGY POLICY, ENERGY PRODUCTION, ENERGY SECURITY, ENERGY SERVICES, ENERGY SOURCES, ENERGY SYSTEM, ENERGY USE, EXCESS POWER, FAIR, FEASIBILITY STUDIES, FINANCIAL CONSEQUENCES, FINANCIAL RESOURCES, FINANCIAL SUSTAINABILITY, FOREIGN INVESTMENT, FREE MARKET, FREE TRADE, FUEL, FUEL CONSUMPTION, FUEL COSTS, FUEL OIL, FUEL PRICE, FUEL PRICES, GAS SUPPLIES, GAS TURBINES, GENERATION, GENERATION CAPACITY, GENERATION COSTS, GENERATION MIX, GENERATORS, GEOTHERMAL ENERGY, GEOTHERMAL RESOURCES, GROSS DOMESTIC PRODUCT, HORIZONTAL INTEGRATION, HYDROCARBONS, HYDROELECTRIC PLANTS, HYDROELECTRIC POTENTIAL, HYDROELECTRIC POWER, HYDROELECTRIC POWER GENERATION, HYDROPOWER, INCOME, INDEPENDENT POWER PRODUCERS, INTERNATIONAL INVESTORS, INVESTMENT CLIMATE, INVESTMENT COSTS, KILOWATT HOUR, LIQUEFIED NATURAL GAS, LNG, LNG TERMINAL, LOAD FACTOR, LOWER COSTS, MARGINAL COST, MARGINAL COSTS, MARKET CONDITIONS, MARKET DEVELOPMENT, MARKET INTEGRATION, MARKET POWER, MARKET PRICE, MARKET PRICES, MARKET REFORMS, MARKET REGULATION, MARKET RULES, MARKET SUPPLY, MONOPOLY, NATIONAL GRID, NATURAL GAS, NATURAL GAS TRANSMISSION, OIL, OIL EQUIVALENT, OIL IMPORTS, OIL PRICE, OIL PRICES, OIL PRODUCTION, OIL PRODUCTS, OIL RESOURCES, OPEN ACCESS, OWNERSHIP STRUCTURE, PEAK DEMAND, PETROLEUM, POLICY MAKERS, POWER, POWER COMPANIES, POWER CONTRACTS, POWER DEMAND, POWER GENERATION, POWER GENERATION FACILITIES, POWER INDUSTRY, POWER MARKETS, POWER PLANT, POWER PLANTS, POWER PRODUCER, POWER PRODUCERS, POWER PRODUCTION, POWER PURCHASE, POWER PURCHASE AGREEMENTS, POWER PURCHASING AGREEMENTS, POWER SECTOR, POWER SECTOR DEVELOPMENT, POWER SECTORS, POWER SHORTAGES, POWER SUPPLY, POWER SYSTEM, POWER SYSTEMS, POWER TRADE, POWER TRANSACTIONS, PRICE BIDS, PRICE CONTROLS, PRICE VOLATILITY, PRICING PRINCIPLES, PRIMARY ENERGY, PRIMARY ENERGY SUPPLY, PUBLIC SECTOR, PUBLIC SERVICE PROVIDER, PUBLIC SERVICES, PUBLIC UTILITIES, PURCHASING, REGULATORY FRAMEWORK, RENEWABLE ENERGY, RENEWABLE ENERGY POTENTIAL, RENEWABLE GENERATION, RENEWABLE POWER, RESERVE REQUIREMENTS, RESIDENTIAL PRICES, RESIDUAL FUEL, RETAIL, RETAIL COMPETITION, RETAIL ELECTRICITY, RETAIL ELECTRICITY PRICES, RETAIL PRICES, RETAIL TARIFFS, SALE, SERVICE PROVIDERS, SOURCE OF ELECTRICITY, SPOT MARKET, SPOT PRICE, SUBSTITUTE, SUPPLIER, SUPPLY COSTS, SURPLUS, SURPLUSES, THERMAL CAPACITY, THERMAL PLANTS, TOLLS, TOTAL DEMAND, TOTAL SALES, TRANSMISSION CAPACITY, TRANSMISSION GRID, TRANSMISSION INFRASTRUCTURE, TRANSMISSION LINE, TRANSMISSION LINES, TRANSMISSION LOSSES, TRANSMISSION SYSTEM, TRANSMISSION SYSTEMS, VERTICAL INTEGRATION, WATER CONCESSIONS, WHOLESALE COMPETITION, WHOLESALE ELECTRICITY, WHOLESALE ELECTRICITY MARKET, WHOLESALE ELECTRICITY MARKETS, WHOLESALE MARKET, WHOLESALE MARKETS, WHOLESALE PRICE, WIND,
Online Access:	http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000333037_20110721002752 https://hdl.handle.net/10986/2766
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