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expansion planning by a national-level institution that oversees the whole country.
In Brazil and Chile, the proactive efforts carried out by
the central planner are to a large extent oriented to accessing
resource-rich areas and promoting competition in generation
auctions. The different orientation of the actions taken so
far in Colombia explains the different coloring of the corresponding cell in Table 3. Yet informal consultation with
Colombian players has revealed that discussions about proactive planning methods are emerging.
Special attention in proactive planning should be given to
avoiding picking winners while designing systems to access
areas with high-quality (renewable) potential, since this
would harm the principle of nondiscriminatory open access
as a means of promoting competition in generation. The risk
of a government-led process being affected by biased political pressures, aimed at benefiting a region, is also a concern.
Presumably, Brazil and Chile are relying on information
gathered not only via recent country-wide resource assessments but also via auctions for long-term generation contracts
(i.e., information on areas with a high number of candidate
generators) to avoid such pitfalls in proactive planning. In
general terms, planning agencies seem to be aware of the
drawbacks of information asymmetries and seek to employ
their best efforts to overcome them; a possible approach
involves methodological efforts, with the consideration of
different scenarios of competitive generation and the choice
of robust expansion plans to fit them.
Dealing with the costs of proactively planned transmission facilities is also a matter of interest. The Chilean approach for the systems to access development hubs
includes allocating costs to consumers, until the moment
when generators actually access the system. The Brazilian approach does not specify a differentiated treatment
proactively planned facilities of the trunk transmission; the
usual cost allocation approach will be used, which involves
a 50/50 allocation of costs to the generation and the consumption segments as a whole and then an allocation to
each agent within each segment with basis on a locational
economic signal and a postage stamp (with the latter typically recovering most costs).
The legislative bodies of both Brazil and Chile are currently evaluating bills that more strongly involve the state
in the licensing process (and, in the case of Chile, in the
obtaining of rights-of-way). Again, this might be facilitated
by governmental institutions already executing expansion
planning; and, conceivably, the planners can benefit from
information and know-how exchanged/acquired during
licensing processes, regarding both feasibility of implementation schedules and environmental costs that should
be considered while comparing transmission expansion
alternatives. It is worth mentioning, however, that this is not
the only possible avenue to overcome implementation problems. For instance, other jurisdictions in the world employ
tenders where a transmission need is identified, and bidders
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present different solutions (including different routes, subject to the implementation challenges the bidder finds easier
to overcome) as part of the competition.
In Brazil, there has been opposition from power sector
institutions to assign the responsibility of acquiring licenses
to the planning agency, with the argument that transmission
concessionaires are better positioned to do this. The counterproposal of fast-tracking and simplifying licensing procedures has been presented by the MME. Similar arguments
were presented in Colombia in 2011. These are legitimate
concerns but some transmission investors argue that, to be
able to form bids in auctions, it is of uttermost importance to
at know beforehand which social-environmental liabilities
will need to be addressed during the project implementation.
The third class of common elements refers to improving
incentives and facilitating the identification and approval
of reinforcements to existing facilities, including overhead
lines in existing routes to make the most of already existing assets and counteract difficulties in installing new
facilities. This strategy fits a feature also essentially common to the jurisdictions: these reinforcements (at least to
some asset classes) are usually approved and have their
revenues set directly by the regulator, rather than being
auctioned. Since the remuneration of transmission concessionaires does not depend on congestion revenues, but
rather on fixed revenues defined by the regulator, changes
in the remuneration rules and availability incentives are
required to improve the incentive structure regarding the
incorporation of new technologies. The current opposition of the Colombian transmission agents to Resolution
#178/2014 shows, however, that the process of change is
anything but simple.

For Further Reading
ECLAC. (2014). The economic infrastructure gap and investment in Latin America. [Online]. Available: http://www.
cepal.org/en/publications/37381-economic-infrastructuregap-and-investment-latin-america
H. Rudnick, R. Ferreira, S. Mocarquer, and L. Barroso,
"Transmission expansion in fast growing economies and the
challenges of renewables integration," in Proc. IEEE Power
and Energy Society General Meeting, San Diego, CA, 2012,
pp. 1-8.
H. Rudnick, L. Barroso, D. Llarens, D. Watts, and R. Ferreira, "Flexible connections," IEEE Power Energy Mag., vol.
10, pp. 24-36, Mar./Apr. 2012.

Biographies
Rafael de Sá Ferreira is with PSR Consulting, Rio de Janeiro, Brazil.
Hugh Rudnick is with Pontificia Universidad Católica de
Chile, Santiago, Chile.
Luiz Barroso is with PSR Consulting, Rio de Janeiro,
Brazil.
p&e

july/august 2016

http://www http://www.cepal.org/en/publications/37381-economic-infrastructure

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