Long-Run Energy and Emissions Modeling in Chile: Scenario Assessment using MESSAGE

Abstract

The evolution of Chile's energy matrix into a more sustainable system with high levels of energy adequacy and security in the long term brings with it important challenges and could signify a paradigm change in the manner in which the system is planned and managed. Long-term energy planning, forgotten in Chile due to the control of the markets, is now fundamental for studying changes in the future national energy supply and its emissions. This article contributes by developing an energy model of the main national system in MESSAGE and evaluating the effects of the scenarios that dominate national discussions; including large amounts of hydro, nuclear and wind energy. We find that using part of the country's hydro power potential is fundamental to replace carbon without imposing higher costs in the economy. However, the use of large amounts of low marginal cost energy (hydro, nuclear, wind, etc.) creates important drops in the price of energy which could compromise the sustainability of these scenarios in the marginal pricing framework that is utilized today.