Very interesting paper. I wonder if there’s another big lesson about how transmission investments can unlock new lower-cost sources of power? Seems like most places have a transmission bottleneck yet new lines are constrained by regulations (US) or lack of public investment (many emerging markets). Lots of experiments are trying to attract private $ into transmission but it’s not going very well. How did Chile finance that line?
Thanks Todd. The paper says, "line expansions were paid via an increase in energy fees by consumers... With the discount rate at 5.8% the costs of the line were recovered by consumers in...less than 8 years (with dynamic correction)."
For now, I imagine the coal and gas plants are sunk capital and are not factored into electricity pricing. When the wind and sun are not available these fossil-fuelled generating plants can be used. The result is reliable electricity.
What this would look like would be a reduction in coal and gas use, and a drop in the cost of electricity.
The total cost of the system, for reliability, is the cost of the solar panels, the cost of the wind farms and the cost of the coal and gas plants.
The grid is 55% renewable (solar, wind and hydro) and is highly stable with 24/7 power. Coal use has declined significantly. In recent years so has natural gas. Hydro helps balance the grid. More info here: https://www.iea.org/countries/chile
I read the IEA article, and I think you, me and them are all on the same page regarding the facts. Adding renewables to an existing grid will cut fossil fuel usage, cost, and be reliable.
This is because fossil plants have been built and have not yet been decommissioned in Chile. They are used much less however, because the renewables create the energy. So far so good.
But the reliability of supply comes because the fossil plants are standing by, under-utilised, until those periods where the renewables can’t deliver. Then, the fossil plants get switched on.
That is today.
In the future, unless and until energy storage catches up with the cost of stored fossil fuels (gas, oil or coal stored by just laying around under the ground) the price of reliability will be the price of building new standby (fossil) generating capacity.
We don’t have long to wait to see what renewables grids without standby capacity look like. Chile intends decommissioning this year. (To add to Germany who turned off their nuclear, and are now screwing up the grid in Europe.)
The grid is 55% renewable (solar, wind and hydro) and is highly stable with 24/7 power. Coal use has declined significantly. In recent years so has natural gas. More info here: https://www.iea.org/countries/chile
Very interesting paper. I wonder if there’s another big lesson about how transmission investments can unlock new lower-cost sources of power? Seems like most places have a transmission bottleneck yet new lines are constrained by regulations (US) or lack of public investment (many emerging markets). Lots of experiments are trying to attract private $ into transmission but it’s not going very well. How did Chile finance that line?
Thanks Todd. The paper says, "line expansions were paid via an increase in energy fees by consumers... With the discount rate at 5.8% the costs of the line were recovered by consumers in...less than 8 years (with dynamic correction)."
There was local opposition, but this was overcome. Would be interesting to investigate how they pushed through the politics. https://www.solarplaza.com/resource/11722/has-chile-fixed-its-transmission-issues/
For now, I imagine the coal and gas plants are sunk capital and are not factored into electricity pricing. When the wind and sun are not available these fossil-fuelled generating plants can be used. The result is reliable electricity.
What this would look like would be a reduction in coal and gas use, and a drop in the cost of electricity.
The total cost of the system, for reliability, is the cost of the solar panels, the cost of the wind farms and the cost of the coal and gas plants.
The grid is 55% renewable (solar, wind and hydro) and is highly stable with 24/7 power. Coal use has declined significantly. In recent years so has natural gas. Hydro helps balance the grid. More info here: https://www.iea.org/countries/chile
I read the IEA article, and I think you, me and them are all on the same page regarding the facts. Adding renewables to an existing grid will cut fossil fuel usage, cost, and be reliable.
This is because fossil plants have been built and have not yet been decommissioned in Chile. They are used much less however, because the renewables create the energy. So far so good.
But the reliability of supply comes because the fossil plants are standing by, under-utilised, until those periods where the renewables can’t deliver. Then, the fossil plants get switched on.
That is today.
In the future, unless and until energy storage catches up with the cost of stored fossil fuels (gas, oil or coal stored by just laying around under the ground) the price of reliability will be the price of building new standby (fossil) generating capacity.
We don’t have long to wait to see what renewables grids without standby capacity look like. Chile intends decommissioning this year. (To add to Germany who turned off their nuclear, and are now screwing up the grid in Europe.)
Well Atacama desert is probably sunny throughout the year. Or does it get fogs
How do they manage at nights?
How do they handle the nighttime energy economics?
Hydro and wind. https://www.iea.org/countries/chile/electricity
Weather any energy storage solution implemented? How energy demand met during night time?
The grid is 55% renewable (solar, wind and hydro) and is highly stable with 24/7 power. Coal use has declined significantly. In recent years so has natural gas. More info here: https://www.iea.org/countries/chile