Nasirov, S., O'Ryan, R., & Osorio, H. (2020). Decarbonization Tradeoffs: A Dynamic General Equilibrium Modeling Analysis for the Chilean Power Sector. Sustainability, 12(19), 19 pp.
Abstract: Medium size developing countries like Chile that commit to decarbonization goals need to carefully assess the trade-offs associated to their intensity and timing, since most of the technologies required will be absorbed, not produced, by these countries. A rapid expansion of renewables in the Chilean energy matrix, mostly thanks to exceptional solar and wind resources, combined with a rapid decrease in the cost of renewable energy technologies, intensified current policy debates to reduce the role of coal, which is the largest source of CO2 emissions in the generation mix. Recently, the main generation companies in Chile made a voluntary commitment to not invest in new coal projects that do not include carbon capture and storage systems. In addition, the Chilean government announced its plans to phase out coal plants completely by 2040. In this context, the aim of this research is to study the economy-wide and emission reduction impacts of different decarbonization paths in the Chilean power sector. For this purpose, we consider dynamic simulations using a new energy-oriented version of the Computable General Equilibrium Model (CGE)- General Equilibrium Model for the Chilean Economy (ECOGEM)-Chile which is soft linked to the bottom-up engineering energy model. The results show the major impacts under both the business as usual (BAU) scenario and the coal phase-out scenario. Additionally, the study discusses to what extent the ambitious decarbonization goals of the Chilean government are coherent with the current technological limitations.
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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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