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Author (up) Bergen, M.; Muñoz, F.D. pdf  doi
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  Title Quantifying the effects of uncertain climate and environmental policies on investments and carbon emissions: A case study of Chile Type Journal Article
  Year 2018 Publication Energy Economics Abbreviated Journal Energy Econ.  
  Volume 75 Issue Pages 261-273  
  Keywords Uncertainty; Climate policies; Transmission and generation planning; Carbon emissions; Stochastic programming; Equilibrium  
  Abstract In this article we quantify the effect of uncertainty of climate and environmental policies on transmission and generation investments, as well as on CO2 emissions in Chile. We use a two-stage stochastic planning model with recourse or corrective investment options to find optimal portfolios of infrastructure both under perfect information and uncertainty. Under a series of assumptions, this model is equivalent to the equilibrium of a much more complicated bi-level market model, where a transmission planner chooses investments first and generation firms invest afterwards. We find that optimal investment strategies present important differences depending on the policy scenario. By changing our assumption of how agents will react to this uncertainty we compute bounds on the cost that this uncertainty imposes on the system, which we estimate ranges between 3.2% and 5.7% of the minimum expected system cost of $57.6B depending on whether agents will consider or not uncertainty when choosing investments. We also find that, if agents choose investments using a stochastic planning model, uncertain climate policies can result in nearly 18% more CO2 emissions than the equilibrium levels observed under perfect information. Our results highlight the importance of credible and stable long-term regulations for investors in the electric power industry if the goal is to achieve climate and environmental targets in the most cost-effective manner and to minimize the risk of asset stranding.  
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  Series Volume Series Issue Edition  
  ISSN 0140-9883 ISBN Medium  
  Area Expedition Conference  
  Notes Approved no  
  Call Number UAI @ eduardo.moreno @ Serial 904  
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