Impact of intermittent non-conventional renewable generation in the costs of the Chilean main power system

The authors model the hydro-thermal operation of the power system and analyze spot prices, total operation costs and capacity factors. Results show that the average spot price in the SIC, when having an optimal minimum cost generation mix, is 89.7 US$/MWh. As intermittent NCRE penetration increases, some thermal base-load units׳ capacity factors change producing an increase in the generation cost. Additional transmission capacity is also needed elevating the total cost. The average incremental cost of integrating intermittent NCRE generation is 65.8 US$/MWh when increasing NCRE penetration from 10% to 30%. The effect of fossil fuel price fluctuation is also addressed. Two policy guidance elements are presented: intermittency should be reduced by diversifying the renewable portfolio and penetration costs of intermittent NCRE generation have to be incorporated into their investment or operation costs.