Enel Américas’ 2018 Analyst Update Meeting...Enel Gx Perú free market supply contracts 6 10.9...
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Peru Enel Américas’ 2018 Analyst Update Meeting Carlos Temboury Country Manager Enel Perú
Transcript of Enel Américas’ 2018 Analyst Update Meeting...Enel Gx Perú free market supply contracts 6 10.9...
PeruEnel Américas’ 2018 Analyst Update Meeting
Carlos Temboury
Country Manager
Enel Perú
Enel Perú Positioning
Enel Américas in Peru, our assets
3
Distribution: north
of Lima
Malacas
Huinco, Matucana,
Callahuanca, Moyopampa,
Huampaní
Yanango y
Chimay
Ventanilla
Santa Rosa
Generation Power Plants
• 1st distribution company. 20% market share.
• 1.4 million customers.
• 7,937 GWh sales 2017.
• 1,240 MW peak demand 2017.
• 2nd generation company. 15% market share.
• 2,045 MW (61 % thermal; 39% hydro).
• 7.5 TWh production 2017.
Enel Dx Perú
# 1
Enel Gx +
Enel Gx Piura
# 2
EGP
# 1
2017(US$ m) Dx Gx Total
Ebitda 220 370 590
Capex 130 362 492
Employees 588 364 952
4
Capacity Market
Market Position Enel Peru 2017
22%
15%
16%13%
8%
4%
22%
State ENEL
ENGIE IC Power
Fenix (Colbun) Orazul
Others
Energy Production (49 TWh)
Enel Perú is the second private generator in the
country
(Kallpa)
Enel
Perú
Installed Capacity (11,958 MW)
13%
17%
20%
19%
5%
5%
21%
State ENEL
ENGIE IC Power
Fenix (Colbun) Orazul
Others
Enel
Perú
(Kallpa)Enel Perú Enel Perú
5
Market evolution in Peru
43.9 TWh
0.7 TWh
2.5 TWh
6.6 TWh
2017
Po
ten
tial
Fre
eF
ree
2016
Po
ten
tial
Fre
eF
ree
2.7 TWh
0.9 TWh
6.3 TWh
2015
Po
ten
tial
Fre
eF
ree
43.3 TWh
15.6 TWh15.9 TWh
Enel Perú
Others
Regulated
Reg
ula
ted
Reg
ula
ted
Reg
ula
ted
17.8 TWh
18.2
TWh
20%21% 21%
201720162015
Enel Free Market Share (TWh)
4.1 TWh
1.5 TWh
4.7 TWh
39.7 TWh
15.1 TWh
14.3 TWh
5.6TWh
3.6TWh
3.2TWh
4%5% 6%
24%26% 27%
Enel DxEnel Gx OthersTotal Enel Perú
20 40217
59230
321
260
514
808
2015 2016 2017
Enel Gx Enel Dx Others
23%
Gx
Dx
339
784
1346
34%
40%
Enel Free Market # customers
Total Enel Perú%
19.8TWh
24.1TWh
24.8TWh
Enel Gx Perú free market supply contracts
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10.9 11.2 11.1 9.9 10.4 10.1
2018 2019 2020
Energía Firme ENEL E Contratada
Project CODCapacity
MWEnergy
TWh/año
AMPLIACIÓN TOROMOCHO 2020 200 1.4
SAN GABRIEL 2021 70 0.5
PAMPA DE PONGO 2022 50 0.4
PUKAQAQA 2022 63 0.4
LOS CHANCAS 2022 100 0.7
QUELLAVECO 2022 140 1.0
ZAFRANAL 2023 91 0.6
HAQUIRA 2024 110 0.8
New mining projects, future tenders expected
Source. MINEM
Contracting balance, energy TWh
Free MarketRenovations and new opportunities
Enel Perú firm energy
1500
2000
en
e.-
18
ab
r.-1
8
jul.-1
8
oct.-1
8
en
e.-
19
ab
r.-1
9
jul.-1
9
oct.-1
9
en
e.-
20
ab
r.-2
0
jul.-2
0
oct.-2
0
Compra de Potencia Terceros
Potencia Firme ENEL
Potencia Contratada ENEL
Contracting balance, capacity MW
Third parties power
Enel Perú firm capacity
Enel Perú capacity contracted
824 5.8TOTAL
Renovations and new opportunities
Customer Renewal dateCapacity
MWEnergy
TWh/year
VOTORANTIM-METAIS 2020 242 1.7
LINDLEY 2021 17 0.8
CAMPOSOL 2021 21 0.7
280 3.2TOTAL
E Contracted
Source. Osinergmin
Enel Dx Perú supply contracts for free market
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Free market: power contract vs demand projection (MW)
0
50
100
150
200
250
300
ene-18 feb-18 mar-18 abr-18 may-18 jun-18 jul-18 ago-18 sep-18 oct-18 nov-18 dic-18 Año 2019 Año 2020 Año 2021
Kallpa (Fijo) Kallpa (Variable) Enel Gx Fenix (Fijo) Fenix (Variable) Proyección DemandaDemand projection(Fix) (Fix)(Variable)
Enel X
Enel X Peru
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Main business lines
o Segment: B2B and B2G
o Target 2018: MUSD 2.2 (Gross Margin)
o Portfolio: Infrastructure projects (power increases, lighting), infrastructure maintenance, energy efficiency
(energy consumption management).
o Channels: Direct sales, commercial promotions, fairs.
e-Home
e-Industries
o Segment: B2C
o Target 2018: MEUR 1.5 (Gross Margin)
o Portfolio: Home appliances (refrigerator, heater, stoves), credits, third party billing services (water, gas, retail), micro
insurance (life, burial, accident, dental)
o Sales channels: Commercial offices, direct sales, call center, digital sales
e-Mobility
o Project: 2 electric Buses (12 meters) on manufacturing
o Objective: Public transport demonstrative project
o Operation date: March 2019 for 2 years
Digitalization
Digitalization programs
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Overview of relevant programs 2018-22
Infrastructures & Networks Thermal Generation Market
Customer Journey
CRM Platform
DGPlant
Big Data / IOT
BEAT
Employee Journey
Staff
Heat Rate Optimization
Advanced Process Control
Predictive maintenance
Losses reduction
Automatic Meter Mgmt
Meter data Mgmt
Procesos Administración,
Finanzas, Controling &
Procurement
I am interested in this job
I am a new hire
Emergency management
Customer Care
There is no power
I want to be known
Operation and maintenance
digitalization in power plants
Advanced IoT sensors and
sophisticated analytical models
New global platform for smart
meter2.0
Integration and standardization
AFCP & Business Line
Processes
Employee as internal clients to
unlock their full potential
Unique solution for all markets
Rethinking of customer
experience
Customer
Asset
People
Digital Worker Transf.
Automation large hydro plants
Sales
Mobile, App & One hub
I have to pay my bill
I am interested in your offer
Info on my billing
I am travelling for job
Get to now the organization
Programs Main initiatives
Work-force Mgmt
E4E Procesos de Negocio: GEN,
I&N, Market y ENEL X
Hydro
Predictive maintenance Local Control Room
Data gathering Pi
SCADA systems security
Crossc
c
Network Digital Twin Digitalización de la infraestructura de redes eléctricas en
media tensiónMT Network Digitalization
MV remote control system
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Medium Voltage Network
46
20
19
13
0 10 20 30 40 50
2018-19
2017
2016
2015
Feeders per Year
Quality Service improvement
25%
• No manpower requirement.
• Immediate failure identification and isolation.
• Minimize number of affected customers.
• Shorter system recuperation.
Main objective: SAIDI reduction
13
MV Network digital twin
• Verify safety distances
• Identify electrocution risks for population
• Lidar system on a vehicle
• 360 ° HD video camera
• Position sensors (GPS, GNSS, IMU, odometers, etc.)
• 3D modeling of MV overhead lines
• Detection of Security Distances vs other infrastructures
• Detection and identification of deficiencies in the network and
construction of digital data for analysis
Deadlines
July 2018
Digitalization of MV Overhead
lines
December 2018
Image detection of LV
infrastructure
Investment
427 kUSD
Goals
Technology
3D network digitizing benefits
Sustainability
Social development achievements
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ODS Enel Goals
0.8 m people by 2020
3 m people in Africa, Asia and
Latin america in 2020
3 m people by 2020
< 350 gCO2eq /kWh by 2020
(-25% base year 2007)
Peru 2015-17
15,715
180,952
25,018
Total beneficiaries ODS Peru = 221,685
-500 k tCO2/year
-12% gCO2/kWh
Quality Education
Affordable and
clean energy
Decent work and
economic growth
Climate action
Sustainability Challenges
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Promoting Circular
Economy - Talara’s
Ecofurniture
program
More than 450 children
studying music
Núcleo Enel
Sinfonía por el Perú
Improving educational
quality
Santa Elena School
Talara - Piura
More than 400 adults
in “ABC rural
digitalization”
More than 1,000
medical cares in
health and nutrition
for rural communities
Illumination of 120 sport
courts / 180 k
beneficiaries
Third reinsertion
program for clients
with difficulties
Workshops about
protection of tropical
forests / Agroforestry
development with
Coffee program.
Creating Shared Value with our stakeholders
Rural
agriculture
development
Callahuanca
Financial Focus
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FinancialFocus on Peru - MUSD
Net Debt
Revenues EBITDA and EBITDA Margin
Net Income
1Q 201820172015 2016
381
133
2016
34.7% 34.9%39.0%
2015
40.1%
2017 1Q 2018
538
465
543
120
2015 2016 2017 1Q 2018
234
64
252
2015
371
2016 1Q 20182017
552
347
424
1,3791,340 1,354
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FinancialGross Capex - MUSD
By Activity By Business
2017
155
47
2015 2016
916
1Q 2018
202223
197
25
109
124
11473
149
2015 2016
5
2017
197
1Q 2018
202223
2553
100
123
74
123
20
Maintenance Growth Distribution Generation
Hot Topics
Hot Topics Peru
21
Gasoducto Sur Peruano pipeline delay
0 2 9 25105
261
541
12 70 2 9 25105
261
541
789
654
2018 2019 2020 2021 2022 2023 2024 2025 2026
Con GSP Sin GSP
0
20
40
60
80
100
120
140
160
180
200
en
e.-
18
ab
r.-1
8
jul.-1
8
oc
t.-1
8
en
e.-
19
ab
r.-1
9
jul.-1
9
oc
t.-1
9
en
e.-
20
ab
r.-2
0
jul.-2
0
oc
t.-2
0
en
e.-
21
ab
r.-2
1
jul.-2
1
oc
t.-2
1
en
e.-
22
ab
r.-2
2
jul.-2
2
oc
t.-2
2
en
e.-
23
ab
r.-2
3
jul.-2
3
oc
t.-2
3
en
e.-
24
ab
r.-2
4
jul.-2
4
oc
t.-2
4
en
e.-
25
ab
r.-2
5
jul.-2
5
oc
t.-2
5
en
e.-
26
ab
r.-2
6
jul.-2
6
oc
t.-2
6
Con GSP Sin GSP
Marginal costs USD/MWh
Higher production costs due
to distillate consumption
Diesel consumption MUSD+ 100 MUSD overcost
+2.5% increase in residential
tariff
-
200
400
600
800
1,000
1,200
1,400
Estimated Enel Generation mix during the interruption
Hidro GN Malacas Diesel Malacas
Diesel Lima Importación Demanda Total
Demanda Total Reducida
22
Camisea Gas Plant maintenance
Hot Topics Peru
Fecha MMPCd
26-jul 1346
27-jul 700
28-jul 200
29-jul 200
30-jul 200
31-jul 200
01-ago 200
02-ago 678
03-ago - 17-ago 1102
MW
272.3210.4
177.4241.1
272.4 272.6 272.3
27 28 29 30 31 1 2
Spot
US$/MWh
• Pluspetrol has announced 23 days of Camisea gas interruption (from 26th july to 17th august).
• 91% of the thermal installed capacity will be affected.
• Estimated impact of 21 MUSD due to spot prices increase and operational costs (diesel).
Camisea gas
availability
• TSO transmission optimization
• T&D gas grid as storage
• Agreement with water operator
to increase hydro production
Remediation plan
23
Peruvian regulatory framework
Tatiana Lozada
Head of RegulationEnel Perú
Market structure
24
Generation Distribution
Regulated
Clients
Non-regulated
Clients (1)Negotiated
prices
Regulated
Prices
Spot
market
Regulated Prices / Long-term auctions prices
Negotiated prices
GENERATION (Gx) TRANSMISSION (Tx) DISTRIBUTION (Dx)
• Competitive Market.
• Spot market marginal costs.
• Centralized dispatch.
• PPA’s for distribution: regulated price or LT
auctions.
• PPAs for free clients: negotiated prices.
• Natural monopoly.
• Regulated business.
• Centralized planning (Ministerio Energía y
Minas).
• Auction processes to assign standardized
BOOT contracts
• Natural monopoly.
• Regulated business, VAD (Valor Agregado
de Distribución) is approved every 4 years.
• Pass-through of Tx and Gx costs.
• Residential clients with less than 100 kWh
are subsidized.
• Dx is responsible of the street lighting.
(1) Non-regulated clients: i) Mandatory for those with more than 2,5 MW, ii) Eligible between 0,2 MW and 2,5 MW
Strong Gx competition with more than 70 operators
Customers 2017 – regulated and free market
25
Energy Sales 2017Energy
Free Market
(TWh)
Regulated
Market
(TWh)
Total
(TWh)
Generators 21.3 0 21.3
Distributors 3.5 19.1 22.6
TOTAL 24.8 19.1 43.9
Share 56.5% 43.5% 100%
Source : Osinergmin
Strong consolidated free market
Free Market56.5%
Regulated Market43.5%,
# customers
Free Market
(customers)
Regulated
Market
(customers)
Total
Customers
Generators 706 0 706
Distributors 640 7.2 million 7.2 million
TOTAL 1346 7.2 million 7.2 million
Share 0.02% 99.98% 100%
Spot Market fundamentals
Transf. MUS$ 9.1 8.2 7.3 6.5 6.3 8.4 7.5 9.4 9.9 19.6 6.7 6.5
Spot market transfers (TWh)
20179.4 TWh
105 MUS$
Sellers
26
• Marginalist market based on
variable costs.
• RENs first to be dispatched.
• GN Thermal Generators
declare GN prices once a year.
• Audited variable costs for other
technologies.
Buyers
OTHERS
1.0 0.90.7
1.0 1.1
0.8 0.7 0.6 0.6 0.6 0.60.8
Jan Feb Mar Apr May Jun Jul Ago Sep Oct Nov Dec
OTHERSPERÚ
Spot Market access to large users and distributors
27
Large customers (>10 MW) can purchase energy to cover up to 10% of their demand
Distributors can purchase up to 10% of their free market demand.
Big clients
(>10MW)
Spot market
Gx
Dx
Reg
Free
Spot market
Gx
Dx
Reg
Free
10%
demand
last 12
months
Distribution Regulatory model
28
Distribution Regulation (VAD): remuneration based on due
investments for a model company, tariff studies approved by
the Regulator every 4 years. Since 1994, four tariff processes
have been done. New tariff setting process will end in
October 2018.
Sub-transmission Regulation: HV and MV grid development
based on 4 years investments plan previously approved by
regulator.
12% discount rate since
1992 (real before taxes)
Distribution is a stable & profitable activity with high growth potential
25
New VAD process
New model to fix next 4 years VAD considering ideally each company gives a better chance to defend our
proposal.
28.02.18
Real Enel Perú data
figures deliveredEnel Perú VAD
preliminary study to be
presented
Enel Perú VAD final
version to be
summited
18.06.18 03.07.18 03.08.1802.05.18
Regulator comments
to be discussed
Regulator’s
prepublicationEnel Perú
comments
17.09.18
Final VAD
publication
16.10.18
Potential upsidesService quality: up to 5% additional MT VAD for SAIFI-SAIDI improvement.Smart meters: investments to replace a 100% of the analogic meters in 8 years time.
Innovation: up to 1% VAD to incentivate projects improving service quality.
PTU
(workers 5% utilities right)
Historically recognized as a cost, has been refused on 2013-18 period. Legal actions ongoing for
that period.
New VAD coming
into force on 1st
Nov 2018
2
Evolución del Margen de Reserva del Sistema Eléctrico Peruano y Costo Marginal
6963
68
38
88
3221 24
3127 25
1521
10
0
10
20
30
40
50
60
70
80
90
100
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Costo Marginal (US$/MWh)
3,1
31
3,3
05
3,5
80
3,9
66
4,1
99
4,3
22
4,5
79
4,9
61
5,2
91
5,5
75
5,7
37
6,2
75
6,4
92
6,5
84
4,3
36
4,4
71
4,8
00
5,1
52
5,1
47
5,8
48
6,4
63
6,4
44
7,1
17
7,8
13
8,7
18
9,6
14
12
,07
8
11
,95
8
38%35% 34%
30%
23%
35%41%
30% 35%40%
52% 53%
86%82%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
20,000
2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Máxima Demanda (MW) Potencia Efectiva (MW) Margen de Reserva (%)
Regulatory DiscussionOver Capacity & Spot prices
26
Reserve margin and Spot prices evolution
Instalada (MW)Max Demand (MW) Installed capacity(MW) Reserve margin
Spot Price (USD(MW/h)
• Spot prices reduced since 2015 due to overcapacity, demand slowdown and gas costs rigidities.
• Generators with net selling position in the spot, initiated a campaign to intervene mechanism to fix a floor price of 27
USD/MWh (fix and variable costs).
• New regulation adjustment in variable cost considerations increased 4 USD/MWh on average. Enel Perú purchase
position is 2TWh, with a budget assumptions of 15 USD/MWh.
• Congress is analyzing the possibility of fixing a new mechanism.
Regulatory DiscussionNatural Gas Price Declaration
27
Variable costs
PMGN 0 declared
Cumulated MW
32
Overcontracted distributors
Action Plan
Company Overcontracted
[MW]
Enel Dx 210
Luz del Sur 350
State Dx 256
TOTAL 816
Enel Dx: overcontracted capacity vs Demand (MW)
Regulatory Discussion
Diagnosis
‒ Due to system overcapacity, demand
slowdown and regulated customers
migration to the free market.
‒ Impact up to 2021 (LT contracts
ending)
‒ Enel Perú position in generation
market reduces impacts due to
capacity offset with system operator.
-15.0 -16.8 -15.7 -14.9 -14.2
11.0 11.9 10.9 10.6 10.2
-4.0 -4.9 -4.8 -4.3 -4.0
2017 2018 2019 2020 2021
Enel Dx Enel Gx Enel
Overcontracted impact in Enel Perú (US$ m)
• Enel Perú is promoting a new regulatory framework to reduce impacts in Dx by
extending existing Gx PPAs.
Capacity Projection demand
Next regulatory discussionElectrical Discount Rate
29
Yearly impact: 10 MUSD/100bp.
Discount rate value Legal Framework Adjustment mechanism
12%
Since 1992
Ley de Concesiones Eléctricas
(Art. 79°)
• Osinergmin to propose based on an specialized external
opinion.
• Ministry of Energy to approve by a “Resolución Ministerial”.
• Modification range: no bigger than 2%.
Osinergmin commissioned to Mercados Energéticos S.A. a consultancy to evaluate the rate.
Low risk for the change because of strong investments needed in Dx Industry to improve quality service and expansion.
Common actions among different operators ongoing.
Current Situation
Phone
+562 23534682
Web site
www.enelamericas.com
Rafael De La HazaHead of Investor Relations Enel Américas
Jorge VelisInvestor Relations Enel Américas
Itziar LetzkusInvestor Relations Enel Américas
Javiera RubioInvestor Relations Enel Américas
Gonzalo JuarezIR New York Office
Contact us
Enel Américas’ 2018 Analyst Update Meeting
