VRES and grid interconnection in South America: Chile and Argentina
As part of the research series, conducted by Enel Foundation in cooperation with the leading consulting company CESI, looking at different scenarios for the development of Variable Renewable Energy Sources (VRES), particularly solar and wind in South America,
the first cluster covers Chile and Argentina.
The base scenario has been built starting from the available public domain information. The three main building blocks are: the yearly energy demand, the generation fleet and the structure of the transmission grid in Argentina and Chile.
The Best Available Technology (BAT) scenario modifies the expansion pattern of VRES (Variable Renewable Energy Sources) considering the real system limitations but optimizing the potential of the natural resources available in the territories. Finally, the Breakthrough scenario considers an accelerated decarbonization of the future power systems by the deployment of clean energy generation coupled with new technologies including energy storage; in the latter scenario, it is assumed that VRES power plants will be able to provide required ancillary services and would not increase the upward and downward reserve need. In addition, with the addition of energy storage capacity, VRES plants are able to increase flexibility in providing energy to the grid when needed and store excess energy avoiding technical losses in case of over generation or transmission system congestion.
Main results
In Argentina, PV and wind are equally competitive from the economic point of view: the expected LCOE of the two technologies is similar in the range 41.7-44.3 $/MWh. The study suggests network reinforcements not currently included in the current transmission development plans in order to support the exploitation of PV power plants limiting the risk of curtailments in this scenario.
In Chile, economic benefits of PV technology suggest need to install more PV than wind: the LCOE for PV is much lower than for wind (27.3 $/MWh vs 68.4 $/MWh), which indicates a strong convenience to install more PV than wind power plants.
In the Best Available Technology scenario:
Argentina’s optimal amount of VRES power plants at the target year (2030) is roughly 15 GW. This capacity corresponds to 48.7 TWh per year and represents more than 21% of the national demand by 2030.
Chile’s optimal amount of VRES power plants at the target year (2030) can reach 8.4 GW. Such capacity could produce a yearly output of 20.7 TWh, representing about 19% of the demand by 2030.
In the Breakthrough scenario:
Argentina’s optimal VRES capacity increases by 11 GW (plus 3 GW storage), reaching a total of 26 GW installed capacity in 2030. Such capacity, coupled with 3 GW storage, would produce yearly around 89.2 TWh, covering almost 38% of the total demand in the target year.
Chile’s optimal VRES capacity increases by 7 GW (plus 2 GW storage), reaching a total of 15.4 GW installed capacity in 2030. Such capacity, coupled with 2 GW of storage, would generate a yearly combined output of 37.3 TWh, covering almost 34% of the total demand in the target year.
With optimized grid interconnections between Argentina and Chile, additional VRES capacity can be deployed. It becomes convenient to install additional 1,500 MW VRES plants in each country. This is due to the reduced risk of curtailment and a more levelised load profile that can be supplied by the plants.