Electric power, an opportunity for LPG
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- Nov 23, 2020 12:00 pm GMTNov 22, 2020 11:21 pm GMT
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Liquid Petroleum Gas, LPG, is a vital energy source for progress and therefore it must reinforce the strength of its canons by taking advantage of the opportunities provided by the regulation of the electricity sector, especially that related to energy generation.
Since 2014, through Law 1715, it was established as a rule of efficient management in the Non-Interconnected Zones, ZNI, that when it is more efficient to use LPG for the generation of electricity, in exchange for diesel oil, LPG has the right to receive the subsidy determined by the Ministry of Mines and Energy from the National Budget in conditions similar to those of diesel. So, if a project is financially closed, distributed energy generation schemes from LPG can be adopted in the NICs and adopting microgrids for energy distribution.
Following this, the bases of the National Development Plan 2014 - 2018 established that in order to manage reliable and transparent information of the LPG sector, the Ministry of Energy and the CREG should evaluate the convenience of establishing the figure of the LPG market manager, which was presented in the CREG Resolution 121 of 2016, where the manager was granted the role of publishing the information of the transactions carried out in the LPG wholesale market, something very similar to what is done in electric energy with the company XM S.A. ESP as the manager of the wholesale energy market.
Now, in the bases of the National Development Plan 2018 - 2022, another impulse to LPG is evidenced, I mean that LPG is integrated with the sources of clean generation seeing it as a source of clean combustion. Proof of this is that on the one hand projects are promoted to replace diesel with LPG and, on the other hand, it points out that the Ministry of Mines and Energy should promote the participation of different energy sources such as natural gas, liquefied natural gas (LNG), LPG, biogas, biomass, non-conventional renewables, biofuels, geothermal energy, among others, in order to replace the dependence on current more polluting energy sources, such as coal. And the cherry on the cake is in the CREG 002 Resolution of 2019, which formalized the participation of LPG as energy to support power generation of power plants that participate in the auctions of the charge for reliability, a figure that promotes the expansion of power generation par excellence. This rule also made the participation of new plants that are going to operate with LPG more flexible by allowing them to participate in the auction without delivering long-term LPG supply contracts. In its replacement, the plant owner must inform the CREG that it is taking advantage of the option to cover everything with the construction guarantee of the LPG generation plant.
Generally speaking, LPG has the opportunity to start participating in markets other than residential.