AES Panama, the largest electricity generator in the country, is a unit of the US group AES Corp. It was formed as a result of the merger between Empresa de Generación Eléctrica Chiriquí and Empresa de Generación Eléctrica Bayano. The local energy company went through a process of privatization and restructuring in 1999. AES owns and operates a thermoelectric plant, Estrella del Mar I, and five hydroelectric plants, Bayano, Estí, Los Valles, La Estrella and Changuinola I. With 72MW of hydroelectric capacity and 705MW of thermal capacity, the company’s operations represent 25% of Panama’s installed capacity. Its customers include local distributors Ensa, Edemet and Edechi.
1. How do you think your development has been since your arrival in Panama?
Since its arrival in the country, AES has made significant investments in the repowering of the units of the plants that it acquired after the process of privatization of the sector, as well as in the construction of new plants such as Estí and Changuinola I.
2. What have been the main challenges you have faced?
The main challenges have been Social and transmission, mainly.
The hydroelectric project, currently in operation, Changuinola I, has had challenges that the company has always faced with transparency and good faith.
The process implemented by AES Changuinola used as a guide and model the general conceptual and methodological guidelines recommended by the World Bank and the Inter-American Development Bank, which included mechanisms for participatory resettlements through which more than 780 assemblies were held, 215 coordination meetings and 1,400 accompaniment sessions in which government officials participated.
AES Changuinola invested more than 84 million dollars in social infrastructure works, public services, individual compensation, housing solutions, labor training programs, entrepreneurship and community reforestation improving the quality of life of more than 10 thousand people indirectly and contributing to the sustainability of neighboring populations.
In the transmission we had to assume the installation of sub-stations, towers, poles and power lines in different projects of our portfolio in the country, creating a long-term debt receivable from ETESA. Likewise, discharges due to transmission restrictions have led to accounts receivable from ETESA and the Panamanian State with significant amounts that have not yet been collected and that have a significant impact on our finances.
3. What growth plans do you have in the short term?
The AES Colón project and the development of the local and regional natural gas market. Also, it is studied to grow in solar generation in the places where the company already has operations and lands that can be enabled for its development.
In the area of storage batteries, AES is making efforts to introduce them, both in Panama and in the region, which it hopes to promote with the new alliance made with Siemens and the creation of a joint venture called Fluence. In the Dominican Republic, AES has installed 2 energy storage solutions of 10 MW each in two generation plants with natural gas and which are already available to regulate frequency in the system, provide power and power, among other services.
4. What actions do you consider important to guarantee your sustained growth?
That the pace of growth of the country be maintained, with clear rules, maintaining the legal security of investors.
5. What are the programs they manage for the benefit of society?
In Changuinola, a project of great social impact was carried out, which was the construction of 50 Kms of Rural Electrification, home installations and lighting, in neighboring communities providing electricity for the first time to 2,500 people.
The construction of the first hydro-biological station in Central America and the Caribbean for the reproduction of fish and shrimp from the Changuinola river, the raising of larvae in their natural environment and raising them up to the juvenile stage for their later primary use, in the repopulation of the basin and human consumption.
In Chiriquí and in the Bayano area, community projects have also been carried out in areas such as access to water, training for emergency situations, improvement of schools, among others.
In Colon, programs such as “Preparing with Energy” are being developed in conjunction with the Technological University of Panama, through which young people from Colonies are trained to have better job opportunities. Likewise, a program is being carried out with the organization Mujeres Colonenses en Camino (MUCEC), which consists of technical workshops to reinforce training for women entrepreneurs in Colón on topics such as recycling, handicrafts, administration of micro businesses, dressmaking and beauty, among others. .
An important alliance has been formed with the Abel Bravo School, through which AES Colón develops activities with the youth of the Science Club and other students on topics such as natural gas and its uses, environment and values.
Another impact program is “Common Fishing”, in conjunction with the Water Resources Authority of Panama (ARAP), with which the fishermen of La Playita de Colón have organized to create their own cooperative.
AES Colón also implemented the 2017 Fondo Concursables Program. These are non-reimbursable funds created to select and finance projects in the province of Colón, which contribute to the social and economic development of communities in a sustainable manner.
6. What technological innovations have they implemented?
This year, there are two excellent news from AES Corp regarding innovations. On the one hand, the creation of the joint venture with Siemens, called Fluence and the purchase of the company sPower (the most important independent developer of solar energy in the USA). These actions are in line with the objective of AES to accelerate a more sustainable energy future.
Siemens AG and The AES Corporation announced that they have agreed to form a new global energy storage technology and services company under the name of Fluence.
The project as a whole will bring together AES ‘ten years of experience in energy storage in seven countries, with more than a century’s leadership in Siemens energy technology and its global sales presence in more than 160 countries.
By combining the energy storage platforms of Advancion and Siestorage with extended services, Fluence will offer its customers a greater variety of options to meet the challenges of a rapidly transforming energy landscape. The company will allow its customers around the world to better perform in the energy storage sector, currently fragmented, but fast growing, and to meet their needs for scalable, flexible and competitive storage solutions in terms of costs.
Siemens and AES will have joint control of the company and each of them will own a 50% stake. The global headquarters of Fluence will be located in the Washington, DC area, with other offices in Erlangen, Germany and in some cities around the world. The closing of this operation is scheduled for the last quarter of 2017, subject to regulatory approvals, among others.
AES announced the closing of the purchase of the company sPower, leader in the independent development of renewable energies in the United States, in collaboration with Alberta Investment Management Corporation (AIMCo), one of the most important institutional investors in Canada.
AES and AIMCo had announced in February of this year the agreement to carry out the transaction for $ 853 million in cash, plus $ 724 million in non-recourse debt. In relation to the transaction, AES and AIMCo will buy each one directly and independently and will own a little less than 50% stake in sPower.
sPower owns and operates utility and commercial distributed power generation systems in the United States. The sPower portfolio includes 1,274 MW of solar and wind projects in operation or under construction and projects to be developed with more than 10,000 MW located in the United States. Operating assets and projects under construction are under long-term Power Purchase Contracts (PPAs) with a remaining average life of 21 years. With the closing of this transaction, AES’s participation in renewable energy projects in operation and construction will go from 8,278 MW to 9,552 MW, including hydroelectric, wind, solar and energy storage.