Assessing renewable energy policy integration cost, emissions and affordability

Abstract

In the late 1980s, Argentina faced frequent blackouts due to a lack of investment in generation capacity and high electricity demand growth. Argentina was one of the first developing countries to implement the liberalisation and privatisation of public utilities. In 2015, the Argentine electricity market faced a crisis due to low capacity investment. This arose from consumer prices that poorly reflected the true electricity cost, increasing risk for companies to invest in new generation capacity. Since 2016, Argentine government has called an auction to increase generation capacity; in addition, the government has cut incentive to consumers looking for reduce the electricity demand. Moreover, Argentina’s government is promoting policies to increase renewable energy share. However, it is unknown how renewable energies may affect security of supply and electricity price. This paper presents a simulation model to analyse policies for increasing generation capacity and promote renewable energy in Argentina. In this paper is concluded that renewable energies do indeed reduce the energy dependency of fossil fuels, and they lead to reduce electricity prices.In the late 1980s, Argentina faced frequent blackouts due to a lack of investment in generation capacity and high electricity demand growth. Argentina was one of the first developing countries to implement the liberalisation and privatisation of public utilities. In 2015, the Argentine electricity market faced a crisis due to low capacity investment. This arose from consumer prices that poorly reflected the true electricity cost, increasing risk for companies to invest in new generation capacity. Since 2016, Argentine government has called an auction to increase generation capacity; in addition, the government has cut incentive to consumers looking for reduce the electricity demand. Moreover, Argentina’s government is promoting policies to increase renewable energy share. However, it is unknown how renewable energies may affect security of supply and electricity price. This paper presents a simulation model to analyse policies for increasing generation capacity and promote renewable energy in Argentina. I...