Options for Resilient and Flexible Power Systems in Select South American Economies
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Options for Resilient and Flexible Power Systems in Select South American Economies Josue Campos do Prado, Jeffrey Logan, and Francisco Flores-Espino National Renewable Energy Laboratory (NREL) The Joint Institute for Strategic Energy Analysis is operated by the Alliance for Sustainable Energy, LLC, on behalf of the U.S. Department of Energy’s National Renewable Energy Laboratory, the University of Colorado-Boulder, the Colorado School of Mines, the Colorado State University, the Massachusetts Institute of Technology, and Stanford University. Technical Report NREL/TP-6A50-75431 December 2019 Contract No. DE-AC36-08GO28308 Options for Resilient and Flexible Power Systems in Select South American Economies Josue Campos do Prado, Jeffrey Logan, and Francisco Flores-Espino National Renewable Energy Laboratory (NREL) The Joint Institute for Strategic Energy Analysis is operated by the Alliance for Sustainable Energy, LLC, on behalf of the U.S. Department of Energy’s National Renewable Energy Laboratory, the University of Colorado-Boulder, the Colorado School of Mines, the Colorado State University, the Massachusetts Institute of Technology, and Stanford University. JISEA® and all JISEA-based marks are trademarks or registered trademarks of the Alliance for Sustainable Energy, LLC. The Joint Institute for Technical Report Strategic Energy Analysis NREL/TP-6A50-75431 15013 Denver West Parkway December 2019 Golden, CO 80401 303-275-3000 • www.jisea.org Contract No. DE-AC36-08GO28308 NOTICE This work was authored by the National Renewable Energy Laboratory, operated by Alliance for Sustainable Energy, LLC, for the U.S. Department of Energy (DOE) under Contract No. DE-AC36-08GO28308. Funding provided by the U.S. Department of Energy’s Office of International Affairs. The views expressed herein do not necessarily represent the views of the DOE or the U.S. Government. This report is available at no cost from the National Renewable Energy Laboratory (NREL) at www.nrel.gov/publications. U.S. Department of Energy (DOE) reports produced after 1991 and a growing number of pre-1991 documents are available free via www.OSTI.gov. Cover Photos: (left to right) NREL 04135, iStock 22779761, NREL 16933., NREL 15648, NREL 08466, NREL 21205 NREL prints on paper that contains recycled content. Acknowledgments The authors would like to thank Elena Berger and Sheila Moynihan from the Office of International Affairs at the U.S. Department of Energy. They provided guidance, support and vision throughout the process of conducting the research and writing this document. Sandra Dickison from the same office also provided assistance in planning dissemination of the results. We also thank Abigail Rockwell and Lily M. Bravo (U.S. Embassy Santiago), and Derek Wong, Urfa Qadri, and Viviana Weismann (U.S. Embassy Buenos Aires) for their assistance in providing relevant data and information for this report, and planning and arranging meetings with key stakeholders in Chile and Argentina. The authors are grateful for the relevant inputs and data received from Carlos Toro Ortiz and Jerson Reyes Sánchez (Chilean Ministry of Energy); Ernesto Huber and Juan Carlos Araneda (Chilean National Electricity Coordinator); Ernesto Anadón and Martín Kaindl (IAPG); Leonardo Mastronardi, Luciano Caratori, Guillermo Koutoudjian, and Oscar Natale (Argentina Energy Secretariat); Joaquín Mahdjoubian Díaz Cano (YPF); Giovani Machado, Renato Haddad Simões Machado, Thiago Ivanoski Teixeira, and Maria Cecilia Pereira de Araújo (Brazil EPE); Bernardo Bezerra, Luiz Augusto Barroso, and Ricardo Cunha Perez (PSR); Victor Raposo (Petrobras); Javier Martínez Gil and Antonio Jimenez (UPME); and José Manuel Moreno (Colombian Ministry of Mines and Energy). These acknowledgements recognize assistance and insights in providing background information for production of this report, but the individuals mentioned did not all provide feedback on draft versions of this document and do not necessarily agree with or support the findings. For their feedback on draft versions of this document, we thank Andrea Watson, Omar Jose Guerra Fernandez, Sherry Stout, and Jill Engel-Cox from NREL. We also thank Tim Coburn from the University of Tulsa, and the Renewable and Sustainable Energy Institute (RASEI) at the University of Colorado in Boulder. Ivonne Pena-Cabra from Key Logic provided feedback on various sections of the report. Carlos Toro Ortiz and Benjamin Maluenda (Chilean Ministry of Energy) reviewed sections related to Chile. Renato Haddad Simões Machado, Thiago Ivanoski Teixeira, and Maria Cecilia Pereira de Araújo (Brazil EPE) reviewed sections related to Brazil. Fernando Rodriguez (U.S. DOE Office of International Affairs) and Ookie Ma (U.S. DOE Office of Energy Efficiency and Renewable Energy) offered timely feedback and recommendations. Any remaining errors or oversights are the responsibility of the authors. iii This report is available at no cost from the National Renewable Energy Laboratory at www.nrel.gov/publications. List of Acronyms 21CPP 21st Century Power Partnership (a Clean Energy Ministerial Initiative) ANEEL Agência Nacional de Energia Elétrica (Brazilian Electricity Regulatory Agency) BNEF Bloomberg New Energy Finance CAMMESA Compañía Administradora del Mercado Mayorista Eléctrico (Argentinian Wholesale Electricity Market Administrator) COP Colombian Peso CREG Comisión de Regulación de Energía y Gas (Colombian Energy and Gas Regulatory Commission) CSP Concentrated solar power DER Distributed energy resource DG Distributed generation DOE U.S. Department of Energy EIA U.S. Energy Information Administration ENSO El Niño Southern Oscillation EPE Empresa de Pesquisa Energética (Brazilian Energy Research Office) FLNG Floating liquified natural gas FSRU Floating storage and regasification unit GIZ Gesellschaft für Internationale Zusammenarbeit (German International Cooperation Corporation IDB Inter-American Development Bank IAPG Instituto Argentino del Petroleo y del Gas (Argentinian Institute of Oil and Gas) IEA International Energy Agency IRENA International Renewable Energy Agency ISA Interconexiones Eléctricas S.A. (Colombian transmission company) LNG Liquefied natural gas LPG Liquefied petroleum gas NCRE Non-conventional renewable energy NOAA National Oceanographic and Atmospheric Administration OECD Organization for Economic Co-operation and Development ONI Oceanic Niño Index PPA Power purchase agreement PRONUREE Programa Nacional de Uso Racional y Eficiente de la Energía (Brazilian Program for the Rational and Efficient Use of Energy) SACZ South Atlantic Convergence Zone SASH South Atlantic Subtropical High SEC Securities and Exchange Commission TPES Total primary energy supply UPME Unidad de Planeación Minero Energética (Colombian Energy and Mining Planning Unit) VRE Variable renewable energy WRI World Resources Institute YPF Yacimientos Petrolíferos Fiscales (Argentinian energy company) iv This report is available at no cost from the National Renewable Energy Laboratory at www.nrel.gov/publications. Executive Summary Introduction Power systems around the globe are changing rapidly due to a confluence of technological, social, meteorological and business drivers. Wind and solar, especially paired with competitive auction procurement, have become the lowest cost new generation options in many regions of the world. In several countries, the emergence of plentiful and affordable shale gas is leading to the retirement of older incumbent generators, and greater liquidity and flexibility in liquified natural gas (LNG) markets. Battery storage, demand response, electric vehicle charging and other distributed energy resources (DERs) are altering the way power systems are planned and operated. Few locales, if any, will be immune to these dynamics. These changes are highlighting the need for flexibility and resilience in energy systems. This is seen clearly in select South American countries that have traditionally relied heavily on large (dammed) hydropower stations and who now also see increasingly rapid growth in variable renewable energy (VRE) sources. Over the past decade, some of these countries have experienced dramatic changes in hydropower availability due to variations in precipitation associated with “El Niño” and “La Niña” hydrological phases. In Brazil, for example, hydropower plants typically provided 80% of annual power generation needs before 2010, but in the El Niño years of 2014-2015, its contribution fell to 64%. Similar situations exist in Colombia and to a much lesser extent in Argentina and Chile. This document summarizes opportunities for select representative countries in South America to adapt to these buffeting forces to ensure reliable, affordable, sustainable and resilient power systems. Special attention is placed on the potential role for natural gas to help ensure flexible and resilient power. Argentina, Brazil, Chile and Colombia are all vying to play stronger leadership roles in the continent, and all have stated increasingly bold commitments to sustainable development. Figure ES-1. Flexibility issues and options in power systems of key South American countries v This report is available at no cost from the National Renewable Energy Laboratory at www.nrel.gov/publications. Figure ES-1 summarizes the approach taken in this study to consider options in both electricity and natural gas sectors for providing flexibility and resiliency over different time scales. The analysis considers flexibility and resiliency needs at a high level but does not weigh specific