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The Andes is the largest undeveloped geothermal region in the world. The Chilean case is the most puzzling because the country is largely dependent on imported fuels causing, among other issues, high energy prices and energy dependency. But even though it has large quantities of geothermal resources which have been explored since the 1920s, no geothermal power plant has been constructed yet. The barriers for geothermal development in Chile have not been studied in detail and limited information is available about the real economic feasibility of geothermal power generation and whether effective incentives are needed for its development. In this study we present an integrated analysis of geoscientific, economic, historical and regulatory aspects of geothermal development in Chile based on the compilation of new and previously published data. Through a survey of key participants from government institutions, industry and academia we identified the main perceived advantages, barriers, and efficient incentives. The absence of clear medium-to-long term energy policies and a lack of government incentives for companies to overcome financial risk are perceived as the main barriers. Additionally, we calculated the estimated average Levelized Costs of Energy (LCoE) of geothermal electricity generation using different scenarios to illustrate the potential impact of possible government policies. At present conditions and without incentives we estimated a base case geothermal LCoE in Chile which would be "near competitive" compared to the average contract prices. Further analysis would be needed to estimate the effect of different policy incentives more rigorously. Finally, we propose some guidelines for geothermal stakeholders to encourage geothermal power development; these might prove useful to other Andean and developing countries as well.

In the context of the imperative global shift towards renewable energy to mitigate climate change, Latin America (LATAM) emerges as a region of immense untapped potential. However, there is no formal quantification of the effects of developing this potential. This study analyzes the economic and climate impacts of developing renewable energy in LATAM and the Asia–Pacific region using an integrated economic and climate assessment model (IAM). The key findings are as follows. First, exporting renewable energy from LATAM and the Asia–Pacific region yields economic benefits across all regions. However, this surge in renewable energy exacerbates rather than alleviates global warming. Second, the implementation of policy measures accompanying renewable energy exports, aimed at discouraging the use of polluting energy sources, proves effective in mitigating global warming while sustaining significant economic gains globally. Third, LATAM stands to gain substantially from this development. Fourth, due to the gradual process of capital accumulation, any delays in initiating the development of renewable energy exports not only diminish economic gains during the postponement but also in the years following the commencement of exports. These results are robust to several additional simulations and sensitivity analyses. The results align with the goals of the Paris Agreement. [ABSTRACT FROM AUTHOR]

The increasing use of variable generation technologies (VGTs) in power systems, such as wind and photovoltaic generation, has introduced new challenges in the definition of capacity remuneration mechanisms for promoting system reliability. In this context, in this article we propose a novel framework for determining the capacity value of VGTs to contribute to the generation system adequacy, as well as a corresponding method for allocating capacity payments in hydrothermal power systems. We show that the capacity value of VGTs increases with the presence of water reservoirs, since VGTs help relieving hydropower plants from using scarce water resources during off-peak hours thus making more resources available to supply the demand during peak hours.