Electric Interconnections in the Andes Community: Threats and Opportunities

Abstract

The increasing costs of electricity and the difficulties to expand the power generation capacity, as well as the need for increasing the energy security levels, have enhanced the potential benefits of the electric interconnection among countries and the formation of sub-regional energy markets.In this context, this paper identifies some alternatives for electric exchange through interconnections among the electric systems of Bolivia, Chile, Colombia, Ecuador and Peru. In particular, we assess such interconnections from an economic perspective and identify the main barriers for their development. The analysis is carried out at the pre-feasibility level from both private and social point of views, based on the assessment of different investment alternatives in the transmission systems among the aforementioned countries. The modeling of the different future economic operation conditions for each one of the considered electric systems, and for each one of the assessed scenarios, is a central element of the analysis.