RFPEG2013 PRE-BID MEETING RFPEG2013 – Pre-Bid meeting January 9, 2014 Presentation by Derek Davis – Public Utilities Commission

Generation Planning Perspective - Historic Demand and Energy Demand Growth 4.34% PA Net Gen Growth 5.3% PA LF Improved 67% to 73.5% Losses Maintained approx. 12%

Generation Planning Perspective - Sources of Generation 2012 Observations Low Hydrology Year – 15% below average Generation From Bagasse also Low by 15% Prices from Mexico Higher than expected by 30% at average US$ 0.18/KWh

Generation Planning Perspective - Demand and Energy Forecast done by SIEMENS 2009 LCEP Study SIEMENS Methodology Forecast Period 2007 to 2028 Regression with GDP and Population – Full system Zone Forecast based on historical regression Consideration of additional Special Customers

Generation Planning Perspective - Demand Forecast for Generation Planning PUC – (Growth:- Lo – 1.5% - Expected – 4% - Hi – 6.5%) Year Units BEL System Maximum Demand MW % Low Forecast % Medium Forecast % Hi Forecast

Generation Planning Perspective - Planning Criteria LOLP – Loss of Load Probability The expected value of the number of days in a year in which the available generation cannot supply the system peak load. There are many ways to calculate this indicator, some more accurate than others. Percent Reserve The reserve Generation (positive or negative) as a percentage of annual peak demand There is correlation between these 2 indicators for a particular Power System For BEL’s Grid system - LOLP of 3 days/year equivalent to approximately 30% Reserve LOLP usually gives medium to long term performance of Generation System. Short term usually different. For BEL’s Grid System 2013 there were outages but no cases of outages due to lack of generation

Generation Planning Perspective - Generation Requirements

Generation Planning Perspective - Observations  Median Forecast (4% per annum) used to determine Generation additions  Initial period shows generation reserves as inadequate <30%  Earliest addition possible assumed to be in 2016  Consideration of in-country sources very important  Percent reserve of -10% to be maintained  This allows System Generation + Self-Generation of customers to meet demand

Generation Planning Perspective - Candidate Units Firm Power – RFPEG2013 Firm Power – Least Cost Expansion Plan to be developed (Dispatch Simulation Exercise) 60 MW over the period from 2013 to 2023 Eligible Bids/Proposals under RFPEG2013 become candidate Units Hydro With storage and effective Firm capacity Located on the Macal River – Challilo Dam provides storage Located on other Rivers – Needs Storage Thermal Diesel/HFONatural GasCoal/LPG??? Dedicated contracts with plants in Mexico - Wheeling

Generation Planning Perspective - Other Candidate Units – RFPEG2013 Bio-mass bagasseCohune Nuts Other Sources – Grass etc. Energy Efficiency – Not a part of RFPEG2013 – GOB initiative Lighting/Roadway Lighting Air-conditioning Water Heating

Generation Planning Perspective - Evaluation Firm Power under RFPEG2013 Firm Power Bids Received to be analyzed to ensure responsiveness and feasible and ranked based on evaluation criteria Then used in a 15 Year planning dispatch simulation exercise to satisfy Grid Generation Reserve Requirements and minimize the Cost of Power (Total Capacity plus Energy Costs for the 15 Year period) Existing Power Supply contracts must be taken into account The flexibility of Dispatch and price of proposals shall ultimately determine the success of proposals Negotiations to be held with bidders whose proposals are a part of the 15 Year Least cost generation plan

Generation Planning Perspective - Candidate Units Intermittent Power – RFPEG2013 Consideration of non-firm RE sources after Firm Power Analysis - Solar/Wind/Run-of-River Hydro/Etc. Grid Power System variable cost to be considered displaced when RE dispatched Identification of opportunities to further lower Generation Cost by addition of RE intermittent sources Commitment to add 15 MW over the period 2013 to 2023 at lowest possible cost Solar with/without Mexico Intermittent – phased in System problems if too much > 15% of peak demand. CFE ? Tracking/No TrackingJICA experience for CF – 16% Wind – with/without Mexico Intermittent – phased in System problems if too much > 15% of peak demand. CFE ? Source/Methodology to determine Wind speed characteristics to be declared

Generation Planning Perspective - Evaluation Intermittent Power under RFPEG2013 Non-Firm Power Bids Received to be analyzed to ensure responsiveness and feasible and ranked based on evaluation criteria Then used in a 15 Year planning dispatch simulation exercise assuming the displacement of generation variable costs Existing Supply contracts must be taken into account The set of non-firm projects totaling 15 MW over the period 2013 to 2023 with LOWEST COST shall be considered for negotiations

Generation Planning Perspective - Grid Interconnection Costs & Transmission Strengthening Grid Interconnection will be required for ALL Projects BEL to provide Estimates to be added to proposal costs Transmission System Reinforcement If needed the BEL to cost for addition to proposal cost In some cases Transmission reinforcement is only accelerated In the case of acceleration only accelerated cost will be added to proposal

Generation Planning Perspective - Potential additional opportunities outside the country of Belize For such projects developer to identify market Developer responsible to get PPA with external parties Developer to negotiate wheeling with BEL/PUC if feasible GOB may assist PUC/BEL not responsible market prices or failure No price transfer shall occur under any circumstances to Belize Electricity customers

Generation Planning Perspective - CFE Mexico Dispatch 2013 to 2023 – The way we see it

Generation Planning Perspective - Belize/Mexico – Long Term Relationship CFE Mexico will remain important to the Belize Power System Spinning Reserve ServiceAbsorb VARs during Light Load periodsStatic VAR Compensator – Voltage Control Frequency Control/System Black Start/Emergency Energy sales/Low cost energy sometimes