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Agostini, C. A., Armijo, F. A., Silva, C., & Nasirov, S. (2021). The role of frequency regulation remuneration schemes in an energy matrix with high penetration of renewable energy. Renew. Energy, 171, 1097–1114.
Abstract: Renewable energies (RE) in Chile and around the world have experienced outstanding growth in recent years. However, RE technologies such as solar photovoltaic and wind generate an imbalance between generation (offer) and consumption (demand) because of their intermittent and variable nature. Moreover, RE & rsquo;s natural variability makes it necessary for conventional technologies to play a significant role in adjusting for the imbalance in the electric system frequency. As variable RE penetration grows, the need for frequency regulation will increase and, depending on how those higher costs are financed, this could lead to a disincentive to invest in conventional plants that provide that service. In this paper we study the impact of increased photovoltaic energy penetration, the leading RE in Chile, on the profitability of different conventional generation technologies. Specifically, we analyze the role that the frequency control remuneration mechanism has on that impact. For this purpose, four different solar photovoltaic penetration scenarios are simulated in Chile & rsquo;s Northern System, comparing two payment criteria for frequency regulation services: i) a cost-based pricing system whose payments relate to the incurred costs and ii) a market-based pricing system where the marginal cost of providing the services is paid. The results show that as installed photovoltaic capacity increases, the average marginal cost of energy (operation cost) decreases due to a displacement of more expensive power plants, but at the same time, investment cost may increase. In the long run, contract prices change as a result of falling operational costs and rising investment cost, resulting in changes in the profitability of all technologies. Finally, while both cost-based and market-based systems reward the ability to regulate frequency, the technologies performing the regulation receive different payments for the service, affecting both their profitability and the incentives for investment.
Keywords: Renewable energy; Frequency control; Ancillary services; Chile
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Agostini, C. A., Guzman, A. M., Nasirov, S., & Silva, C. (2019). A surplus based framework for cross-border electricity trade in South America. Energy Policy, 128, 673–684.
Abstract: The South American region has experienced a steady increase in its demand for electricity and faces several challenges in the development of the electricity sector. Among them, high fluctuations in hydro generation, high and volatile prices of fossil fuels, and environmental and social impacts associated to energy activities. Strengthening cooperation for cross-border electricity trade is considered a sustainable alternative for addressing these challenges. For the expansion of electricity trade among countries within the region, both infrastructure and a regulation that defines the conditions of the electric power exchanges between countries are required. A good regulatory framework would allow all market players to have access to the commercialization of energy with other countries in the region, guarantee that the treatment of exchanges is non-discriminatory, and maintain the efficiency, cost effectiveness and security characteristics operation of all electricity systems. In this context, this paper proposes a framework with the basic setting conditions for the import and export of energy from the “surplus” available for exchange. The empirical analysis of the regulatory proposal, based on simulations, shows that the exchange of energy from Chile with its neighboring countries is feasible in a clear and transparent manner, reducing the marginal costs of energy and the total cost of operation, keeping the average cost of generation relatively constant.
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Agostini, C. A., Nasirov, S., & Silva, C. (2016). Solar PV Planning Toward Sustainable Development in Chile: Challenges and Recommendations. J. Environ. Dev., 25(1), 25–46.
Abstract: Over the past decade, the promotion of renewable energy projects in Chile, especially solar energy projects, has become increasingly important, as energy dependence from foreign fossil fuels has increased and concerns regarding climate change continue to grow, posing a significant challenge to the local economy. Even though recent developments toward a more sustainable energy matrix in Chile have significantly increased the investment in the solar energy sector, social and environmental fragilities, combined with the lack of well-functioning institutions and the historical marginalization of indigenous communities who have been affected by several energy projects, result in gradually increasing conflictive situations. Unless proper mechanisms are designed and implemented to rapidly and correctly address these challenges, Chile could miss the opportunities that solar energy projects can provide to the development of its communities and to the economic growth of its regions. This article studies solar photovoltaics planning in Chile, focusing on the recent developments and the main challenges ahead, and proposes policy recommendations for effectively addressing these challenges.
Keywords: solar energy; sustainability; development; Chile; policy challenges
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Agostini, C. A., Perticara, M., & Selman, J. (2023). Tackling Vulnerable Households through a Working Tax Credit Scheme: A Feasible Alternative to Cash Transfers. Hacienda Publica Espanola, 245(SI), 119–155.
Abstract: Conditional Cash Transfer Programs (CCTs) have been extremely popular strategies to fight poverty in developing countries for the last three decades. Although these programs can be effective to improve the welfare of the poor in the short run and even to guarantee basic health care and education services, they can also discourage employment and reduce formality rates. Furthermore, they can create welfare dependence and prevent the generation of autonomous income. Many developed countries have been using the income tax system not only to redistribute income but also to implement social policies. A good example is the Earned Income Tax Credit (EITC) in the United States, which offers a reimbursable credit conditioned on working to low-income individuals. This paper uses Chilean data to empirically analyze the effect that a system such as the EITC would have on poverty and inequality in a developing country. Our polity targets single 18-60 years old women, without a partner, with and without eligible children. The results show that a tax credit could increase employment while reducing poverty and inequality. Additionally, we show that an EITC design might be more cost-effective to increase the income of individuals below the poverty line and to reduce inequality. Given that a program like the EITC mostly benefits those who have a higher chance of seeking and obtaining employment in the formal sector, such policy should be implemented as a complementary tool to other social policy programs aimed at helping individuals out of the informal sector.
Keywords: EITC; Poverty; Inequality; Ethical family income; Chile
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Agostini, C. A., Silva, C., & Nasirov, S. (2017). Failure of Energy Mega-Projects in Chile: A Critical Review from Sustainability Perspectives. Sustainability, 9(6), 17 pp.
Abstract: A number of successive energy crises over the last decade due to the lack of a balanced investment planning in the energy sector in Chile has led to a strong dependence on external sources and also doubled energy prices in the country, thus posing a significant challenge to the local economy. With the purpose of reaching long-term goals while simultaneously addressing short-term urgencies, Chile seeks to build a consistent and integrated energy policy in order to attract investment in the sector. Despite an overall attractive investment climate and encouraging market conditions in the country, the energy sector has been adversely affected, in particular, by the communities' opposition to mega-projects based on their expected environmental and social impacts. The study highlights recent experiences of energy generation mega-projects in terms of addressing aspects of sustainability. Based on these experiences, it discusses underdeveloped role of environmental evaluations and the main regulatory challenges ahead, recommending then public policies to effectively address these challenges.
Keywords: energy mega-projects; Chile; environmental evaluation; sustainability
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Nasirov, S., & Agostini, C. A. (2018). Mining experts' perspectives on the determinants of solar technologies adoption in the Chilean mining industry. Renew. Sust. Energ. Rev., 95, 194–202.
Abstract: The energy demand in Chile arises mostly from mining, its largest industry that accounts for about 35% of total electricity consumption. Energy generation to satisfy this demand depends completely on imported fossil fuels. As a result, the mining industry faces several energy related challenges. In particular, the cost and environmental impact of fuel sources are threatening the competitiveness of the industry and urge for new developments. In that regard, the importance of using clean and cost-competitive renewable energy sources has increased significantly in Chile and several government policies helped to increase the investment in them. The impact has been particularly large in the development of solar energy in the northern part of the country, where almost all mines are located. In fact, the country has become one of the largest solar markets in Latin America thanks to its abundant solar resources, favorable market conditions, and successful policy reforms. Solar energy then, could play a significant role as an alternative to satisfy the mining industry's energy demand offering a broad range of technological solutions. This study examines the key issues – barriers and drivers-influencing the adoption of solar technologies in the Chilean mining industry from the perspective of mining actors. As a result of the analysis the paper also provides a scope for appropriate policy interventions.
Keywords: Mining industry; Energy challenges; Solar energy; Chile
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Nasirov, S., Agostini, C., Silva, C., & Caceres, G. (2018). Renewable energy transition: a market-driven solution for the energy and environmental concerns in Chile. Clean Technol. Environ. Policy, 20(1), 3–12.
Abstract: Chile is undergoing a remarkable energy matrix transition to renewable energy. Renewable energies are expanding extraordinarily fast, exceeding earlier predictions. As a result, the country is expected to meet its 2025 goal of generating 20% of its electricity from renewable energy sources quite before. Chile has become one of the first countries in the world with subsidy-free markets, where renewable projects compete directly with other conventional sources. Favorable market conditions and successful policy reforms were keys to fostering this renewable energy development. Although the country has achieved a substantial growth in renewable energy investment in a relatively short period of time, this optimism should be treated with caution. A successful transition requires a combination of a clear decision making, persistent and consistent government policies, and a clear commitment to tackling challenges to accommodate renewable energy in the power system. In this context, this paper analyses the Chilean renewable industry and the required government policies to succeed in this transition. For this purpose, we identify several critical factors that have attracted and that could attract investment to the renewable energy sector and propose key recommendations to effectively address the major challenges faced for the future development of the industry.
Keywords: Energy transition; Energy policy; Renewable energy technologies; Chile
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Nasirov, S., Agostini, C. A., & Silva, C. (2017). An assessment of the implementation of renewable energy sources in the light of concerns over Chilean policy objectives. Energy Sources Part B, 12(8), 715–721.
Abstract: In recent years, the development of renewable energies in the electricity market in Chile has gained significant attention as a key alternative for energy sources diversification and meeting three key policy objectives: energy availability, environmental protection, and social-economic development. This study aims to assess various renewable energy sources in order to select suitable sources to accomplish the different policy goals in a country like Chile. For this purpose, a Multi-Criteria Decision Analysis (MCDA) method is employed to evaluate the relative importance of policy objectives. In addition, a sensitivity analysis is conducted to build various different policy scenarios measuring the impact of variations on the current weights of the decision criteria. The results show that solar, wind, and small hydro are the preferred sources in the Chilean renewable energy portfolio, maximizing the objective of meeting the three policy goals at the same time.
Keywords: Chile; MCDA; policy objectives; renewable energy; sensitivity analysis
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Nasirov, S., Carredano, N., Agostini, C. A., & Silva, C. (2021). Public perception and adoption of Solar Water Heating systems in Chile: The role of supply side income tax credits. Renew. Sust. Energ. Rev., 135, 110389.
Abstract: During the last decade, the Chilean government introduced a corporate income tax credit for construction companies installing Solar Water Heating (SWH) systems in new housing developments. The credit aims to provide hot-water solutions to the residential sector with a cheaper and more environmentally-friendly than fossil fuels. The tax benefits were initially granted from 2010 to 2013, during which time a total of 40,705 SWHs were installed. The credits were renewed for the 2016-2020 period, and SWH installations surpassed 100,000. The main objective of this paper is to evaluate the public perception regarding the use of SWH systems and the specific role of the tax credit program in the diffusion of SWHs during the initial period. Moreover, the analysis discusses the incentive mechanism applied in Chile and highlights several of the challenges regarding its implementation. Data was gathered using a face-to-face survey of households in three regions of Chile: Metropolitan Santiago, Valparaiso and Coquimbo, where most of the SWH were installed. The results showed that an average of 76% of the beneficiaries were highly satisfied with the SWH installations and operation, nearly 99% of respondents believed that this type of energy should be expanded to more households in Chile, and most agreed that the Government should play a significant role in such expansion.
Keywords: SWHs; Chile; Corporate income tax credit; The public perception
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Nasirov, S., Ciarreta, A., Agostini, C. A., & Gutiérrez-Hita, C. (2024). Distributed solar PV applications. In Frontiers in Energy Research (Vol. 12, 1367587). |
Nasirov, S., Cruz, E., Agostini, C. A., & Silva, C. (2019). Policy Makers' Perspectives on the Expansion of Renewable Energy Sources in Chile's Electricity Auctions. Energies, 12(21), 17 pp.
Abstract: Chile has become one of the first few countries where renewable sources compete directly with conventional generation in price-based auctions. Moreover, the results of energy auctions during the last few years show a remarkable transition from conventional fossil fuels to renewable energies. In fact, the energy auction in 2017, to provide energy to customers from distribution companies, achieved a massive expansion in renewable technology at one of the lowest prices in the world. These positive results prompted the question if such results were permanent or temporal due to factors with limited effects. In this regard, this paper studies the key factors that drove the significant rise of renewable technologies in Chilean energy auctions, obtaining valuable lessons for regulators, not only in Chile, but also in the region and the world. For this purpose, we considered a well-proven method based on a hybrid multicriteria decision-making model to examine and prioritize the main drivers of the expansion of renewables in auctions. The results showed that some specific characteristics of the auction design, particularly the hourly supply blocks, the lead time for project construction, and contract duration, were the most significant drivers for the expansion of renewables in energy auctions. Moreover, the results showed that, provided that the auction design accommodates for such drivers, solar energy ends up as the most attractive technology in the Chilean auctions. The research also shows the main findings are robust by the application of a probabilistic sensitivity analysis.
Keywords: renewable energy; auctions; regulator's perspective; Chile
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Nasirov, S., Silva, C., & Agostini, C. A. (2015). Investors' Perspectives on Barriers to the Deployment of Renewable Energy Sources in Chile. Energies, 8(5), 3794–3814.
Abstract: In the last decade, the importance of exploiting Chile's Renewable Energy Sources (RESs) has increased significantly, as fossil fuel prices have risen and concerns regarding climate change issues grown, posing an important threat to its economy. However, to date, the advancement of Renewable Energy Technologies (RETs) in the country has been very limited due to various barriers. For this reason, identifying and mitigating the main barriers that hamper the advancement of RETs is necessary to allow the successful deployment of these technologies. Based on data collected from a questionnaire survey and interviews conducted among the major renewable project developers, the authors identify and rank the major barriers to the adoption of renewable energy technologies in Chile. Our findings show that the most significant barriers include grid connection constraints and lack of grid capacity, longer processing times for a large number of permits, land and/or water lease securement and limited access to financing. Furthermore, we discuss the most critical barriers in detail together with policy recommendations to overcome them.
Keywords: renewables; energy; investors; Chile; barriers
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Nasirov, S., Silva, C., & Agostini, C. A. (2016). Assessment of barriers and opportunities for renewable energy development in Chile. Energy Sources Part B, 11(2), 150–156.
Abstract: Chile has become increasingly dependent on energy imports and its energy demand has grown exponentially in the past decade, impacting the environment and the production costs in the economy. In fact, electricity prices have doubled and it is expected that they will soar in the next decade if Chile does not find a solution for its dependence on imported energy resources. Recent developments, particularly improvements in the regulatory framework and incentives for renewables, have accelerated the growth process and investment opportunities of renewable energy technologies (RETs). However, RETs have faced a number of constraints affecting their penetration. In this article, we review the existing opportunities and also identify and rank the major barrier categories for the development of RETs in the Chilean context. For this purpose, the analytical hierarchy process technique has been utilized for ranking the barriers based on experts' opinions (selected from academia and industry).
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Osorio, H., Nasirov, S., Agostini, C. A., & Silva, C. (2019). Assessing the economic viability of energy storage systems in the Chilean electricity system: An empirical analysis from arbitrage revenue perspectives. J. Renew. Sustain. Energy, 11(1), 015901.
Abstract: The emergence of high penetration rates of renewable energies in power systems presents a serious challenge in energy generation and load balance maintenance to ensure power network stability and reliability. Energy Storage Systems (ESSs) could play a relevant role in facing these challenges, as the technologies have passed the demo and prototype phases to a wide market implementation phase. The only remaining barrier for their implementation is their cost, but even this barrier is quickly disappearing. In this paper, we address the financial feasibility of storage technologies in electricity systems. In particular, we evaluate whether such technologies are economically sustainable and how far they are from becoming viable. For this purpose, we consider the Chilean electricity system and evaluate the maximum possible arbitrage revenues that could be achieved under ESS through benefiting from energy time shift, diminishing of transmission losses, and transmission upgrade deferral. The results show that the arbitrage revenues are still below the cost of storage systems. Further improvement in storage efficiency or a decrease in the cost of storage systems is still needed to make this type of investment financially viable in the near future.
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