Chile: How wind and solar are reshaping the use of dispatchable generation

Chile: How wind and solar are reshaping the use of dispatchable generation

During this decade, energy transition to more renewable to produce electricity reached a new stage, as Wind and Solar technologies achieved grid parity in most of the electrical markets of the world. As they are now market price competitive, without subsidies, they are growing exponentially, implying deep mutations in the operation of electrical grids. This short note shows some insights about the effects of wind and solar energy on the other technologies of the Chilean electricity market.

Wind and Solar started their disruption in Chile in 2014

Chilean electricity market, the SEN[1]  experienced strong evolutions during last years: + 2,651 MW of Solar capacity and + 1,682 of Wind capacity since 2014, which led them to represent now 20%[2] of the energy mix, compared to the poor 3% they were representing 5 years ago at the same period. To reach this level of wind and solar energy in the mix, Chile had to reinforce its transmission grid, as the most abundant resource of wind and solar energy is in the North of the country, in the driest desert of the world whereas most of the consumption is in Santiago region (see Figure 1).

Figure 1: schematic map of the SEN with main areas and transmission lines (own elaboration).

As these grid reinforcements took many years, Chile suffered a strong lack of transmission capacity: this led to strong thermal plant cycling, recurrent wind and solar curtailment, and spot price often dropping down to USD 0/MWh.

Last year: deep daily cycling of thermal plants in the North due to lack of transmission capacity

To illustrate how the generation was before completing the last important grid reinforcement, Figure 2 shows hourly generation of each technology in the SEN, one year ago. It is worth noticing the strong cycling of coal generation, decreasing during the day to “free space” for solar energy, and increasing during night.

Figure 2: Hourly generation of the SEN from October 1st to October 7th, 2018 (own elaboration with CEN data)

Thermal generation profile was needed that way because last year, the last part of 500 kV grid reinforcement between the Northern Chile -where the large coal, wind and solar plants are located- and the Centre -where most of the consumption is- was not ready: indeed, the last part, Nueva Pan de Azúcar – Polpaico 500 kV line, started operation in May, 2019.

As wind and solar energy from the North could not reach the Centre, in the North thermal generation had to decrease to technical minimal levels, while generation in the Centre was as always: thermal plants for base load, and dam hydraulic generation to follow the demand hourly variation, increasing during the morning to supply daytime demand and then the strong evening peak (see Figure 3).

Figure 3: Hourly generation in the Centre of the SEN (from Santiago until Concepción, green area of the map), from Oct. 1st to Oct. 7th, 2018 (own elaboration with CEN data)

Today, this situation has changed: the Chilean grid is stronger than ever, and wind and solar energy can now flow from the driest desert of the world in the North, to the Centre of the country. This changed everything.

This year: base load for thermal plants, and peaking for dam

Now, wind and solar energy can be used at its maximum capacity, with (almost) no curtailment, and thermal plants are not forced anymore to do deep daily cycling. Figure 4 shows hourly generation of the “SEN” this year:

  • Coal is back to business-as-usual, generating almost constantly, as base load (there are still some days with congestions in the grid, due to excess of renewable generation, as on Thursday);
  • Gas can generate without unnecessary cycling, according to merit order.

Figure 4: Hourly generation of the “SEN” from September 30th to October 6th, 2019 (own elaboration with CEN data)

By connecting the North and the Centre of the country, wind and solar generation is now much more connected to hydro generation. In fact, dam power plants can now be used in a more strategic way. In the Centre, dams now show significant variations depending on the time of the day (see Figure 5):

  • dam generation is high during early morning and during evenings, when demand is high, but the sun is not shining yet or anymore;
  • during daytime, dam generation is at its minimum, and even fall to 0 MWh when daytime demand is particularly low (during the weekend).

Dams are helping to face peak demand moments, but perhaps more important, they provide significant ramps twice a day, that thermal power plants may not be able to follow. In this way, dams help ensuring the electrical system safety.

Figure 5: Hourly generation in the Centre of the SEN (from Santiago until Concepción, green area of the map), from Sep. 30th to Oct. 6th, 2019 (own elaboration with CEN data).

This is happening to every electrical market under energy transition

The strategic use of stored water to complement wind and solar generation is a reality that some better-connected countries (both internally and with the neighbour countries) already knows well. A good example is Spain, a country where hydraulic accounts for 15%[3] of the generation and which sees its national dam generation vanishing and even switching from turbine-mode to pumping-mode, when wind blows strong on the Iberian Peninsula.

Nevertheless, it is quite new for the Chilean market, a country with a high wind and solar capacity in the North and dam capacities only in the Centre and the South. Moreover, until May 2019 Chile had an imperfect interconnection between them. In a context of repetitive droughts, water will be scarcer, and its strategic use will help maintain reasonable prices in the market.

 

[1] SEN stands for Sistema Eléctrico Nacional, the National Electrical System in Chile, which supplies electricity to 95% of the population.

[2] Antuko weekly report volume 6 number 11, https://mailchi.mp/antuko.com/wind-solar-report-vol-6-num11

[3] 2018 data from Red Eléctrica de España.