Impact of intermittent non-conventional renewable generation in the costs of the Chilean main power system

Abstract

Chile has recently approved a law aiming a target for electricity generation with Non-Conventional Renewable Energy (NCRE) of 20% by year 2025. It is anticipated that most of this NCRE generation will be provided by intermittent energy sources: wind and solar photovoltaic (pv). The economic consequences of intermittent NCRE penetration in the Chilean Central Interconnected System (SIC) are assessed. The NCRE penetration is simulated with a 10-year horizon (2017–2027), considering four scenarios of NCRE penetration: 10%,15%,20%and30%oftotalgeneration. The authorsmodelthehydro-thermaloperationofthepowersystemandanalyzespotprices,total operation costsandcapacityfactors.ResultsshowthattheaveragespotpriceintheSIC,whenhavingan optimal minimumcostgenerationmix,is89.7US$/MWh.AsintermittentNCREpenetrationincreases, some thermalbase-loadunits’capacityfactorschangeproducinganincreaseinthegenerationcost. Additional transmissioncapacityisalsoneededelevatingthetotalcost.Theaverageincrementalcostof integratingintermittentNCREgenerationis65.8US$/MWhwhenincreasingNCREpenetrationfrom10% to 30%.Theeffectoffossilfuelprice fluctuation isalsoaddressed.Twopolicyguidanceelementsare presented:intermittencyshouldbereducedbydiversifyingtherenewableportfolioandpenetration costs ofintermittentNCREgenerationhavetobeincorporatedintotheirinvestmentoroperationcosts.