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A transition of the Bolivian power sector towards a renewable energy dominated system has been inhibited by a series of laws and policies including heavy subsidies for power generation using domestic natural gas. Within this context, alternative techno-economic scenarios are designed based on key characteristics of the system, and a series of six policy levers are used to analyze impacts on the development of the power sector. The energy-system optimization modeling framework OSeMOSYS is utilized to analyze power sector transition pathways. Techno-economic characteristics and policies are combined to develop bracketing scenarios for the future energy system, contrasting business-as-usual with an ambitious renewable energy policy scenario.Results from the analyzed scenarios show that achieving significant reductions of GHG emissions in the Bolivian electric system will heavily depend on:1) reducing the artificial competitiveness of thermal power plants through subsidies, but also a price on carbon emissions; 2) banning high impact power plants (mainly very large hydropower plants); and 3) defining clear long-term objectives for the participation of renewables in the system, starting with objectives in current short-term plans. By examining several scenarios, relative system costs as a function of emissions reductions are determined as well. For high penetration of variable renewable energy, addition of storage will eventually be needed as dispatchable renewable resources are limited.