Decarbonizations tradeoffs: the case of Chilean power sector

Shahriyar Nasirov, Raul O'Ryan and Hector Osorio

No 333204, Conference papers from Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project

Abstract: A rapid expansion of renewables in the Chilean energy matrix, mostly thanks to exceptional solar and wind resources, combined with a rapid decrease in the cost of renewable energy technologies intensified current policy debates to reduce the role of coal, which is the largest source of CO2 emissions in the generation mix. Recently, the main generation companies in Chile made a voluntary commitment to not invest in new coal projects that do not include carbon capture and storage systems. In addition, the Chilean government announced its plans to phase out coal plants completely by 2040. In this context, the aim of this research is to study the economy-wide and emission reduction impacts of decarbonization in the Chilean power sector. For this purpose, we consider dynamic simulations using a new energy-oriented version of the Computable General Equilibrium Model (CGE)-ECOGEM-Chile which is linked to the bottom-up engineering energy model. The results show the major impacts under both the BAU scenario and the coal phase-out scenario. Additionally, the study discusses to what extent the ambitious decarbonization goals of the Chilean government are coherent with the current technological limitations.

Keywords: Environmental Economics and Policy; International Relations/Trade (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:ags:pugtwp:333204

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