IEEE Power & Energy Magazine - July/August 2016 - 57
160
120
On Time
With Delays
80
40
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04
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0
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0
(a)
22
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Accumulated Average Time
for Obtaining Installation
Licencing (Months)
Accumulated Number of
Sets of Facilities Concluded
in Time and with Delays (-)
period and the accumulate average time required for obtaining the installation license, within the environmental-licensing process that allows construction works to begin, in the
same period. The deteriorating conditions since the late
2000s is clear, and it is worth mentioning that, as of January
2016, 62% of transmission facilities under implementation in
Brazil were delayed.
Acquisition of rights-of-way and social-environmental
licensing currently take place after the auction and responsibilities are assigned to the concessionaire. The increasing
uncertainty in the costs and times for the completion of these
tasks exposes transmission companies to financial risks, due
both to cost-overruns and to penalties and foregone revenues
in case of delays. Even though concession contracts include
waivers for penalties if these are caused by actions not attributable to transmitters, as in the case of delays by licensing
bodies, diffuse attributions during the licensing process
contribute to the perception of risks by concessionaires.
The impacts of implementation issues over the actual
COD of facilities are twofold: 1) the direct shift in the
implementation schedule of facilities effectively awarded
as a result of auctions and 2) the postponement of the date
at which the implementation efforts will actually begin if
a concession fails to receive valid bids in an auction and is
relocated to a subsequent tender. The latter factor should not
be underestimated; e.g., the second circuit of the 500-kV
Paulo Afonso-Luiz Gonzaga transmission line was initially
going to be offered in an auction held in January 2015 and
had its target contractual COD set to March 2018, but it was
relocated to an auction held in April 2016, with the contractual COD postponed to December 2019.
Delays in the effective COD, with respect to the date originally set by the system planner, impact not only transmission
companies but also grid users. Generators participating in
auctions for long-term contracts in Brazil are, presently, formally exposed to financial risks due to the impossibility of
injecting power to the grid and covering contractual obligations, if there are delays in the COD of transmission assets
required for their grid integration. These risks had been previously allocated to consumers (buyers) but were reallocated to
generators in 2013. Assigning risks to transmitters via penalties that matched the contractual financial damages was not
possible in practice; the fact that the auctioning of concessions
results in several, yet smaller-scaled, concessionaires caused
an unbearable financial burden for most transmitters.
Seeking Solutions to
the Implementation Conundrum
Brazilian power sector institutions are devising strategies
to overcome these implementation problems. The strategies implemented or currently under investigation fall
into three main groups.
Drive Toward Proactive Transmission
Expansion Planning
The Energy Planning Enterprise (EPE) already took the first
steps toward proactive planning. In the context of this article,
this means seeking to identify transmission expansion needs
with as much antecedence as possible, to give transmission
companies extended times for implementing the facilities, thus
reducing the probability of delays. This is particularly important for facilities needed for integrating new generation to the
system. In Brazil, and in the other countries analyzed here, the
generation segment is liberalized, and its expansion is the result
of competition. Historically, network facilities were required to
allow the for evacuation of generation to the load centers that
were planned and auctioned only after the outcomes of generation auctions were known, which was made possible by the
then-shorter transmission implementation times. Since implementation delays present serious barriers to this approach,
EPE is seeking to use the best-available information to identify regions with remarkable (renewable) generation potential
before generation auctions and plan transmission to allow
access to these resources, while avoiding picking winners during the auctions. Figure 4 shows examples of facilities (those
marked in opaque red/green) planned under this mechanism
and auctioned in 2014.
(b)
figure 3. The accumulated number of projects (a) concluded on time and with delays and (b) accumulated average
time required to obtain environmental licensing in the
2002-2012 period.
58
ieee power & energy magazine
Stronger Role of State and Improvements
in Social-Environmental Licensing
Different governmental spheres are seeking mechanisms
to improve the environmental licensing process, also in an
effort to mitigate delays and increase the attractiveness of
july/august 2016
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