NEWS

“Subastas de capacidad eléctrica en el Reino Unido: Lecciones en Colombia y Nueva Inglaterra“ por David Harbord and Marco Pagnozzi, REVISTA ANDESCO N° 28, Junio de 2014.

Abstract:  Aún no hay un acuerdo entre los economistas sobre la necesidad de los mercados de capacidad en la generación de electricidad. Sin embargo, cuando se introducen nuevos mercados de capacidad es importante que estén bien diseñados y que tengan en cuenta la experiencia existente y las fallas en diseños anteriores.  La experiencia tanto en Colombia como en Nueva  Inglaterra provee una advertencia fuerte sobre los peligros de poner las subastas de reloj descendente como elemento central en el diseño de los mercados de capacidad eléctricos. Entre las alternativas de diseño, una subasta de sobre sellada parece ser una mejor opción.

“Britain’s Electricity Capacity Auctions: Lessons from Colombia and New England“ by David Harbord and Marco Pagnozzi, The Electricity Journal, June 2014, Vol. 27, Issue 5.

The article discusses the new British electricity capacity auction in light of recent experience in Colombia and New England, and argues that the proposed descending clock auction design will result in high prices and inefficient allocations due to the exercise of market power. Some alternative auction design options are considered, and a sealed-bid auction is recommended as a better choice.

A recent interview with David Harbord “Can renewable energy kick-start Colombian ecotourism?“, published by Business News Americas on 31 January 2014, discusses the creation of a nonprofit foundation Ferdescol (Fundacion de Energias Renovables y Desarrollo Sostenible en Comunidades Colombianas) by Market Analysis Ltd. in collaboration with Baker & McKenzie S.A.S.  Its purpose is to promote renewable energy and sustainable development projects in remote Colombian communities.  Our initial aims are to provide solar panels and a water desalinization plant to a small community of 15-20 indigenous Wayuu families living near Rio Hacha in Colombia’s northern Guajira department. An article – “Renewables to spawn Colombia ecotourism” – accompanying the interview appeared on the BN Americas website on 30 January 2014 and is available here.  A Spanish language version of the interview “Podra la energia renovable hacer despegar el ecoturismo en Colombia?“ can be downloaded by clicking on the link.

We are in the initial stages of setting up the Ferdescol foundation and seeking funding from government and international agencies, and from energy companies in Colombia.  Baker & McKenzie S.A.S. is providing pro bono legal services. For more information visit our website www.ferdescol.org or contact David Harbord or Lucia Martínez.

An interview with David Harbord “Is Colombia stunting renewable energy growth?“ was published in Business News Americas on 17 January 2014.  The interview discusses the results of our report “Private Investment in Wind Power in Colombia“ published in July 2012. An article – “Wind can tame Colombia’s El Nino power scourge, says analyst” – accompanying the interview appeared on the BN Americas website on 16 January 2014 and is available here. A Spanish language version of the interview “Colombia esta frenando el crecimiento de las energias renovables?“ can be downloaded by clicking on the link.

A new paper “Efectos de la Reduccion de Tarifas de Terminacion Movil en el Bienestar en el Mercado de las Telecomunicaciones de Mexico“ by David Harbord and Steffen Hoernig was published in El Trimestre Economico, Vol. LXXX (3) julio-septiembre de 2013, pp. 651-686. The paper reports our estimates of the potential welfare gains from reducing mobile termination rates in Mexico, and finds these to be significant.

A report by David Harbord and Marco Pagnozzi for the Colombian Commission for the Regulation of Energy and Gas “Second Review of Firm Energy Auctions in Colombia” was published on 18 December 2012.  The report contains our analysis of Colombia’s second firm energy,  or electricity generation capacity, auctions held in December 2011 and January 2012, and recommendations for improving the performance of future auctions.

An earlier report by the same authors “Review of Colombian Auctions for Firm Energy” analyzed Colombia’s first firm energy auctions held in May 2008.

A slide presentation “Diseno Regulatorio en Materia de Proteccion de la Competencia (Subastas)“ presented by David Harbord for the SIC’s conference Perspectivas del Derecho a la Competencia en Colombia: XX Anos del Decreto 2153 de 1992, in Cartagena Colombia, 2 August 2012. An English version is available in the Articles and Publications section of the website.

A new report “Private Investment in Wind Power in Colombia“ by David Robinson, Oxford Institute for Energy Studies, Alvaro Riascos, Quantil SAS, and David Harbord, Market Analysis Ltd, was published in July 2012.

The report examines the feasibility of private investment in wind power in Colombia within the existing regulatory framework. It focuses especially on the regulatory methodology for estimating the “firm energy” that wind power plants are capable of providing in Colombia to back up hydro generation during extended periods of drought (El Nino weather events). Our conclusion is that the current methodology probably underestimates wind’s firm energy contribution, and this in turn means that wind power stations receive a lower firm energy payment than they should. This is an important barrier to investment in wind power in Colombia and the report recommends that the Colombian Government reconsider their methodology for estimating the firm energy capacity of wind power and of other (non hydro) sources of renewable power.

The report was commissioned by the UK Foreign and Commonwealth Office’s Latin America Prosperity Fund and builds on previous work on this topic funded by the World Bank.

A series of reports by Market Analysis and the Brattle Group, prepared for the Colombian Commission for the Regulation of Energy and Gas (CREG), on gas market auction and secondary market design are now available on the Publications/Reports and Submissions section of our website.

In January 2011, Market Analysis, in collaboration with the Brattle Group, was awarded two consultancy contracts by the CREG. One of the contracts was to design and implement auctions for the Colombian upstream gas market. A second contract involved making detailed recommendations for introducing open and transparent long-term and short-term secondary markets for gas and transport contracts.

A third contract for standardizing gas supply and transport contracts in Colombia was awarded to Dr. Paul Milgrom of Auctionomics in collaboration with FTI Consulting.