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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.

High penetration of distributed generation (DG) resources is increasingly observed worldwide. The evolution of this process in each country highly depends on the cost of traditional technologies, market design, and promotion programs and subsidies. Nevertheless, as this trend accelerates, higher levels of penetration will be achieved and, in turn, a competitive market integration of DG will be needed for an adequate development of the power sector. This paper proposes a competitive market integration mechanism for DG in a pool-based system. The mechanism encompasses both energy and capacity payment procedures in the wholesale market with DG units located at the distribution level. The proposed model is validated for the current Chilean regulation framework and extended to more general market structures. The model can be considered a novel development on the design of competitive markets for DG resources, which are still dominated by subsidies/compensation schemes. Index Terms--Capacity payments, distributed generation (DG), energy, market design, pool market.

Transmission expansion planning has become a central challenge in the design of competitive electricity markets. The underlying optimization/decision problem exhibits a high level of complexity, being nonconvex, dynamic, and nonlinear, with multiple objective functions and a wide range of uncertainties. In this paper we propose a methodology for handling the expansion problem that involves a novel adaptation of an iterative optimization method based on response surface models already used successfully in the design and manufacture of integrated circuits. It is implemented in a distributed environment using Web services, and is validated and compared with a genetic algorithm based methodology. An application of the proposed methodology to the Chilean Central Interconnected System is then presented and analyzed. The results demonstrate its potential in the fields of risk analysis and decision support systems in power markets. DOI: 10.1061/(ASCE)0733-9402(2007)133:2(69) CE Database subject headings: Electric transmission; Planning; Optimization; Internet; Risk management; Decision making.

This work presents a novel day-ahead energy acquisition model for a distribution company (DisCo) in a competitive market based on Pool and financial bilateral contracts. The market structure encompasses wholesale generation companies, distributed generation (DG) units of independent producers, DG units owned by the DisCo, and load curtailment options. Thus, while satisfying its technical constraints, the DisCo purchases active and reactive power according to the offers of DG units, customers, and the wholesale market. The resulting optimal power flow model is implemented with an object-oriented approach, which is solved numerically by making use of a branch and border sequential quadratic programming algorithm. The model is validated in test systems and then applied to a real case study. Results show the general applicability of the proposed model, with potential cost savings for the DisCo. Finally, the analysis of Lagrange multipliers gives valuable information, which can be used to improve the market design and to extend the use of the model to a more general market structure such as a power exchange. Index Terms--Ancillary services, distributed generation, market design, optimal power flow (OPF), quadratic programming.

This paper presents a formulation of the Optimal Power Flow problem with an explicit modeling of Static Var Compensator (SVC) and Unified Power Flow Controller (UPFC) devices. The optimization problem is solved by using Sequential Quadratic Programming, where two convergence criteria and four different methods are studied to solve the quadratic subproblems. The proposed model is integrated in an object-oriented based decision support platform for competitive power markets. Validation of the method and practical applications to real longitudinal systems are discussed, where FACTS location and a UPFC-based interconnection are described. Results show the impact of SVC and UPFC FACTS technologies in the physical and economic behavior of a real system. Index Terms--FACTS, optimal power flow (OPF), quadratic programming (QP), Static Var Compensator (SVC), Unified Power Flow Controller (UPFC).