Energy transition implications for Bolivia. Long-term modelling with short-term assessment of future scenarios

Abstract

The global imperative of achieving carbon neutrality by 2050 to mitigate climate change has intensified the focus on the energy sector, given its significant contribution to GHG emissions. Like many other countries, Bolivia has set official goals for transitioning its energy sector. However, these still require robust planning and technical documentation to become a reality.

To better understand the effects of the transition process, a long-term optimization model (OSeMOSYS) was developed for the period 2020–2050. This model analyses the evolution of energy consumption, emissions, and required investments under alternative conditions. Additionally, a dispatch optimization model (Dispa-SET) was used to validate the technical feasibility of these scenarios periodically. Linking results from both models helps address limitations in the long-term model and determine a margin of error in its simulations.

This study explores three scenarios: Business as Usual (BAU), Mixed Policies (MP), incorporating policy-based measures, and Carbon Neutrality (CN), assuming a 95 % reduction of carbon emissions. Results suggest that adopting energy transition measures could reduce the system's overall cost in the long term. However, achieving this would require major investments, especially at the power generation level. Relative to BAU conditions, the MP scenario expects an 80 % reduction in emissions by 2050, but requiring discounted investments 3.5 times higher. The CN scenario would require even larger investments, with an average yearly undiscounted cost of 2700 million USD between 2020 and 2050, similar to 7 % of the current national GDP of Bolivia. These results highlight the significant challenge of transitioning Bolivia's energy sector.