Renewable energy expansion in the Chilean power market: A dynamic general equilibrium modeling approach to determine CO2 emission baselines. (20th February 2020)

• Record Type: Journal Article
• Authors: O'Ryan, Raúl; Nasirov, Shahriyar; Álvarez-Espinosa, Andrés
• Is Part Of: Journal of cleaner production. Volume 247(2020)
• Publication Date: 2020-02-20
• Subjects: CGE model -- Renewable energy -- CO2 emissions -- Chile; Factory and trade waste -- Management -- Periodicals; Manufactures -- Environmental aspects -- Periodicals; Déchets industriels -- Gestion -- Périodiques; Usines -- Aspect de l'environnement -- Périodiques; 628.5
• DOI: 10.1016/j.jclepro.2019.119645
• Languages: English
• ISSNs: 0959-6526

Abstract

Abstract: Over the last decade, a high dependency on carbon-intensive fuels in the Chilean power sector has led to environmental concerns, particularly regarding rapid growth in CO2 emissions. More recently, the power sector has experienced significant structural changes with a rapid expansion of renewables in the energy matrix, and this trend is expected to cause significant variations in future CO2-emission baseline scenarios. To investigate the economy-wide impact of renewable energy expansions in Chile's energy mix, this research, based on a Computable General Equilibrium (CGE) model, examines different CO2 emission baseline scenarios. However, because traditional CGE modeling approaches cannot capture the impact of a sector's recent structural changes, we present a step-by-step approach to incorporate different energy matrices from an external engineering bottom-up model into the CGE model. The results indicate that the Business as Usual (BAU) scenario, in which structural changes are not considered, significantly overstates expected emissions. Conversely, considering structural changes in our CGE model shows Chile advancing towards its declared Nationally Determined Contribution (NDC) to reduce greenhouse gas emissions. Furthermore, the methodology implemented in the study has the advantage of being a simple integrated approach that is coherent with current modeling capacities in many developing contexts.