Bergen, M., & Munoz, F. D. (2018). Quantifying the effects of uncertain climate and environmental policies on investments and carbon emissions: A case study of Chile. Energy Econ., 75, 261–273.
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. (C) 2018 Elsevier B.V. All rights reserved.
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Lagos, F., Boland, N., & Savelsbergh, M. (2022). Dynamic discretization discovery for solving the Continuous Time Inventory Routing Problem with Out-and-Back Routes. Comput. Oper. Res., 141, 105686.
Abstract: In time dependent models, the objective is to find the optimal times (continuous) at which activities occur and resources are utilized. These models arise whenever a schedule of activities needs to be constructed. A common approach consists of discretizing the planning time and then restricting the decisions to those time points. However, this approach leads to very large formulations that are intractable in practice. In this work, we study the Continuous Time Inventory Routing Problem with Out-and-Back Routes (CIRP-OB). In this problem, a company manages the inventory of its customers, resupplying a single product from a single facility during a finite time horizon. The product is consumed at a constant rate (product per unit of time) by each customer. The customers have local storage capacity. The goal is to find the minimum cost delivery plan with out-and-back routes only that ensures that none of the customers run out of product during the planning period. We study the Dynamic Discovery Discretization algorithm (DDD) to solve the CIRP-OB by using partially constructed time-expanded networks. This method iteratively discovers time points needed in the network to find optimal continuous time solutions. We test this method by using randomly generated instances in which we find provable optimal solutions.
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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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