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Decarbonizing the Chilean Electric Power System: A Prospective Analysis of Alternative Carbon Emissions Policies

Author

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  • Frédéric Babonneau

    (ORDECSYS, Chêne-Bougeries, Switzerland and Escuela de Negocios, Universidad Adolfo Ibáñez, 7941169 Santiago, Chile)

  • Javiera Barrera

    (Faculty of Engineering and Science, Universidad Adolfo Ibáñez, 7941169 Santiago, Chile)

  • Javiera Toledo

    (Master Program in Industrial Engineering and Operations Research, Universidad Adolfo Ibáñez, 7941169 Santiago, Chile)

Abstract

In this paper, we investigate potential pathways for achieving deep reductions in CO 2 emissions by 2050 in the Chilean electric power system. We simulate the evolution of the power system using a long-term planning model for policy analysis that identifies investments and operation strategies to meet demand and CO 2 emissions reductions at the lowest possible cost. The model considers a simplified representation of the main transmission network and representative days to simulate operations considering the variability of demand and renewable resources at different geographical locations. We perform a scenario analysis assuming different ambitious renewable energy and emission reduction targets by 2050. As observed in other studies, we show that the incremental cost of reducing CO 2 emissions without carbon capture or offset alternatives increases significantly as the system approaches zero emissions. Indeed, the carbon tax is multiplied by a factor of 4 to eliminate the last Mt of CO 2 emissions, i.e., from 2000 to almost 8500 USD/tCO 2 in 2050. This result highlights the importance of implementing technology-neutral mechanisms that help investors identify the most cost-efficient actions to reduce CO 2 emissions. Our analysis shows that Carbon Capture and Storage could permit to divide by more than two the total system cost of a 100% renewable scenario. Furthermore, it also illustrates the importance of implementing economy-wide carbon emissions policies that ensure that the incremental costs to reduce CO 2 emissions are roughly similar across different sectors of the economy.

Suggested Citation

  • Frédéric Babonneau & Javiera Barrera & Javiera Toledo, 2021. "Decarbonizing the Chilean Electric Power System: A Prospective Analysis of Alternative Carbon Emissions Policies," Energies, MDPI, vol. 14(16), pages 1-16, August.
  • Handle: RePEc:gam:jeners:v:14:y:2021:i:16:p:4768-:d:609259
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    References listed on IDEAS

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    Cited by:

    1. Bojana Škrbić & Željko Đurišić, 2023. "Novel Planning Methodology for Spatially Optimized RES Development Which Minimizes Flexibility Requirements for Their Integration into the Power System," Energies, MDPI, vol. 16(7), pages 1-34, April.
    2. Ferrada, Francisco & Babonneau, Frederic & Homem-de-Mello, Tito & Jalil-Vega, Francisca, 2023. "The role of hydrogen for deep decarbonization of energy systems: A Chilean case study," Energy Policy, Elsevier, vol. 177(C).
    3. Osorio-Aravena, Juan Carlos & Aghahosseini, Arman & Bogdanov, Dmitrii & Caldera, Upeksha & Ghorbani, Narges & Mensah, Theophilus Nii Odai & Haas, Jannik & Muñoz-Cerón, Emilio & Breyer, Christian, 2023. "Synergies of electrical and sectoral integration: Analysing geographical multi-node scenarios with sector coupling variations for a transition towards a fully renewables-based energy system," Energy, Elsevier, vol. 279(C).

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