An Optimization-Based Analysis of Decarbonization Pathways and Flexibility Requirements in the Chilean Electric Power System
Abstract
The Chilean electric power system has changed at a fast pace in recent years through the significant integration of wind and solar power, which now jointly account for more than a 10% of the energy share in the electricity generation portfolio. Further, it is projected that wind and solar power will keep strongly increasing their share. However, coal still occupies a very large energy share of about 40%, and due to significant environmental concerns, the current government started to seriously analyze the possibility of considerably reducing coal generation, involving discussions with many electric industry participants and experts. Based on this analysis, it is expected that there will be no more coal generation built in the country, and a vision has been laid out for an important decarbonization process in the years to come. This raises important challenges, as decarbonization will proceed at the same time as the share of wind and solar power keep rapidly increasing, which will heavily increase the pressure on the flexibility requirements of the power network. Motivated by this, this paper will examine various decarbonization and renewable energy integration pathways for the Chilean electric power system, with special consideration for the definition and satisfaction of flexibility requirements. The methodology for such analysis will be based on advanced optimization-based power system expansion planning models over a planning horizon spanning from 2020 to 2040, including an effective representation of the short-term operational dynamics of the system. Finally, the results obtained will be assessed in order to propose energy policy recommendations on long-term energy auction designs and on market structures for energy and ancillary services.