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The urban expansion that takes place in developing countries has important impacts on environment. For that reason, it is important to supply household energy needs through renewable energies such as solar PV. Notwithstanding, as the adoption of solar PV panels in households must overcome important barriers different environmental policies are applied around the world, such as feed in tariff and net metering. This paper assesses following scenarios that consider policies to encourage solar PV adoption: a feed in tariff is applied, net metering scheme is applied, none policy is applied. The solar PV adoption is analyzed in terms of installed capacity, adopter households, potential adopter households, solar PV generation, and avoided CO2 emissions. Findings suggest that feed in tariff policy provides the best results to environment, as under this policy the highest levels of CO2 emissions are reached.

During the last 10 years Brazil has accelerated the incorporation of new wind capacity into its power matrix. This situation has generated the need for increased transport capacity. However, there have been delays in the planning process for new transmission line construction, thus inducing trapped electricity in the system; in other words, electricity that cannot be dispatched to the interconnected system. Using system dynamics modelling, this paper assesses energy policy alternatives for improving the synchronisation between the construction of both power generation and transmission capacities. Simulation results show that policy synchronisation within the wind industry may provide important opportunities regarding security of supply. This paper concludes that in Brazil’s case it is possible to attain a balance between wind power expansion and interconnection capacity through synchronised and systemic interventions.

This paper assesses the effects of inserting solar and wind power in a hydro-dominated electricity system that has been at risk of outages in the short term. The extent to which renewables could contribute to overcoming potential critical conditions has not received much attention given the intermittency of the sources. In this context, this paper proposes a robust optimization model that, under different scenarios, estimates the implications of building new power plants based on renewables and traditional technologies. It considers costs, average construction times, and blackout events. Hidroituango, a mega hydroelectric project – prone to non-completion due to failures during its construction phase – is considered here because it threatens Colombia’s future energy security of supply. Model results indicate that investing in hydro or thermal power units could be risky and twice as expensive as investing in renewables. Findings show that solar and wind technologies, in a ratio of 2.5 to 1, make part of the optimal and secure expansion plan for the Colombian power system. Besides reducing the CO2 emissions of the electricity sector, in the scenarios analyzed, these renewables show fewer blackouts (between 15 and 40% less) than the traditional technologies and more water savings in reservoirs.

In recent years, the UK electricity sector has been seeking to achieve its environmental targets through subsidies to renewables. Although subsidies, through feed-in tariffs, to promote the adoption of photovoltaic (PV) systems by UK households had been successful, the government decided to significantly reduce these incentives. As these tariffs were precisely aimed to incentivise households to adopt PV systems, cutting those fees may have conflicted with the stated purpose of the policy, and its impact on industry participants is in turn uncertain. This paper seeks to contribute to the understanding of the long-term effects of cautious feed-in tariff reductions on household’s PV adoption, utilities and solar companies by considering a systems approach. This is important to ascertain counterintuitive effects. System Dynamics simulation, the chosen quantitative methodology in this paper, establishes that cutting subsidies to PV users could result in the reduction of PV installations and lower benefits for solar companies. Despite reductions in PV installations, this study finds that the market would still have potential for solar energy-related technology growth in the UK. For instance, lower feed-in tariffs are likely to promote the adoption of PV-battery systems to maximise self-consumption.

Electricity is essential for the economic growth and welfare of poor communities. However, 15% of the world's population does not have access to it. In Colombia, 52% of the territory is not connected to the national electricity grid, due to remoteness and difficult access from the main urban centers. About 2 million people live there, vulnerable and stricken by severe poverty. Some electricity is available to off-grid areas through fossil-based technologies, which provide a polluting and costly service. Renewable energy could be an opportunity for the development of these off-grid areas, but finding affordable solutions is needed to ensure sustainability. An optimization model for planning appropriate stand-alone, renewable-based electricity systems for off-grid communities is developed. It facilitates the evaluation of different technological configurations of renewables, fossil fuels, and batteries, as well as the randomness of demand and climatic variables to determine most advantageous features. To test this model, a case study was undertaken at the isolated community of Playa Potes in Choco Department, Colombia. The results suggest, as the best solution, an electricity system based on solar power (22 and 29 kWp) and battery storage (74 and 93 kWh) to satisfy current and future requirements at affordable prices (35–38 ¢/kWh). These results point at the large potential for introducing renewable energy technologies to supply electricity to off-grid communities in Colombia, instead of relying just on fossil-based fuels.

Across the world, the electricity industry is changing with the advent of renewable energy sources such as solar and wind power. As these are exposed to intermittency, seasonality, and global-climate-variation, policy-makers' concerns are now shifting towards security of supply. In fact, the industry confronts three conflicting goals: security of supply, competitive prices to customers, and environmental protection. In this context, and given the multiple uncertainties of technology transformation, this paper uses modelling-based scenario analysis to investigate different extreme and plausible futures. Simulation is used to analyse policies aimed at increasing the penetration of renewables and to explore how these energy sources may affect system reliability. This paper explores the effect of incorporating renewables in Colombia, where a large hydroelectric component has led to insufficient electricity being available during droughts and to high electricity price volatility. Though not intuitive at first glance, this paper shows that renewables may contribute to: i) increased security of supply through complementarity, e.g., it does not rain when the sun shines; ii) reduced price volatility in the medium-term, and iii) increased industry sustainability.

While most of Colombia's power comes from large-scale hydroelectricity generation, it still depends on fossil-fuel-based technologies. Alternative cleaner energy sources have been largely neglected despite their abundance and the likely complementarities between different renewable resources. This limited mix of energy sources has made the system vulnerable to unpredictable and recurrent drought conditions (El Nino) occurring every 4–5 years. In the past, El Nino brought high energy costs and power supply losses. This paper proposes an optimisation model to study the insertion of renewable energy systems (RES) into the Colombian electricity sector. The model considers a cost-based generation competition between conventional technologies (hydro and thermal) and alternative RES (solar photovoltaic (PV) and wind). It aims at minimising system costs, CO2 emissions, and the number of blackout events. The model is solved by following two procedures known as Implicit Stochastic Optimisation (ISO) and Robust Optimisation (RO), and the results indicate that alternative renewables should replace all fossil-fuel-based technologies for economic and environmental reasons. Solar PV seems particularly promising to expand system capacity, as it contributes to both the reduction of the overall system costs and to the ability of the system to cope with extreme dry weather conditions.

Colombia represents that group of developing countries that is facing new challenges in energy demand due to climatic phenomena, technological changes and the growing use of renewable energy. This article presents a joint research work between the Unidad de Planeacion Minero Energetica - UPME (In Spanish) and the University of Bogota Jorge Tadeo Lozano to analyze the energy demand and greenhouse gas emissions produced in Colombia. The study was conducted using the Long-Range Energy Alternatives Planning System (LEAP) software, through the construction of a model based on the year 2015 and with two future scenarios (positive and negative). The LEAP model is extrapolated until the years 2030 and 2050 to obtain the future predictions of the country's economic sectors: tertiary sector, industrial sector, housing sector and transport sector. The negative scenario is characterized by low economic growth and few incentives for technological change, which translates into low growth in energy efficiency, as well as a low substitution of petroleum-based energy. In contrast, in the positive scenario the economic growth of the sectors is greater and the technological substitution is accelerated which allows higher efficiency levels in the final use of energy and a greater migration towards cleaner technologies.

The technology transformation of the power industry is crucial for electricity companies, which need to be prepared for the transition of their traditional business. Using scenario-planning exercises, combined with SWOT and PESTEL analysis, as well as a systems thinking approach, this paper explores potential strategies for electricity companies to grasp the opportunities and offset threats, by focusing on the formulation process for a broad, innovative strategy for the transition in the power business. The paper concludes that the transformation of the Colombian energy industry poses serious challenges to electricity companies when policy and regulation promote the adoption of non-conventional energy sources, at a time when the cost of renewables keep declining; however, with a robust adaptive strategy, companies could better face the transition from current business to new alternatives. Keywords: Scenario planning, Technological transformation in energy, Power industry, Electricity company

The power industry is changing worldwide from fossil-based energies to renewables, this trend has been mainly fostered by governments seeking to reach decarbonisation. In particular, renewable energies as solar and wind pose benefits and challenges on traditional power system, e.g., they are environmentally friendly but their intermittency and seasonality is a challenge for security of supply. Though, this is not obstacle for countries to produce almost 100% of its electricity from renewables, such is the case in Costa Rica, Paraguay and Iceland. In this context, and given multiple uncertainties tied to the spread of renewable energies, this paper uses a simulation model to analyse a scenario with 100% renewable energy supply. This paper concludes that for the Colombian case, a large hydroelectric component and its complementarity with solar and wind reduce prices and increase energy efficiency, while helping security of supply.

En la región hídrica de Bogotá se genera el 17% del PIB de Colombia y alberga el 20% de la población del país (DANE, 2017). Durante las últimas dos décadas, los informes públicos sobre el estado del recurso hídrico en la cuenca del río Bogotá establecen que el índice de Vulnerabilidad Hídrica por desabastecimiento alcanza la calificación muy alto (IDEAM 2000, 2010, 2015; Huitaca CAR, 2018) mientras que estudios sobre el impacto combinado del cambio climático y aumento de la población aumentarían la demanda hasta 50% en 2050 (Buytaert W. &., 2012). En dicho contexto se precisa identificar las condiciones para garantizar que el suministro de agua en la región sea sostenible en el largo plazo. En orden a lograr el objetivo se usó el modelado de dinámica de sistemas que hasta el momento no se ha usado para el caso de estudio seleccionado. Se encontró que si los rezagos en la ampliación de la oferta se sitúan entre los 5 y 9 años y las políticas de gestión de la demanda se aplican suficientemente, contando con un crecimiento tendencial de la demanda y sin la influencia del cambio y la variabilidad climática, no se avizora desabastecimiento.

Previous studies have shown that poor performance of energy supply chains arises from incorrectly interpret feedback information and time delays between decisions and actions in energy policy. This paper assesses alternatives to improve performance of wind-power supply chain with transmission constraints that contribute to enhance response capacity of the wind industry to changes of energy policy. In order to test these alternatives, this paper used a simulation model with system dynamics (SD), taking as case study Brazil. The simulation model represents the main time lags and fluctuations that exist in the wind-power supply chain. Four simulation scenarios were proposed to evaluate changes in auction-based policy in wind industry of Brazil. The results are related to operational capacity, inventory levels and response capacity. This paper provides an analysis of different scenarios that contribute with synchronization of auctions policy, including transmission capacity constraints.

Bogota is the largest city in Colombia, it is the capital district and 20% of the Colombian population live there. Public reports have suggested that the vulnerability of water supply system in this city is high, mainly because of inadequate water resource management, climate variability, and population growth. This paper proposes a computational model to assess the long-term effects of delays in water plants and droughts on the water security of the Bogota river basin, Colombia. The computational model is based on systemic approach, in particular, water planning on the supply side is studied in detail. The main conclusion that can be drawn is that under a Business as Usual (BAU) scenario, the study area will experiment a risk of water security. To avoid a risky situation for water security, the construction time of water plants should be lower than 9 years. The contribution of this work is to raise the awareness of policy makers about the risk of shortage.

As the use of renewable energy is growing worldwide, the wind industry is being endorsed as a promising source for clean energy supply. In this context, the strategic management of the supply chain is fundamental to pursue a steady expansion of renewable energy. However, the fragmentation between energy policy design and implementation has been considered as a major cause threatening the effectiveness in managing the supply chain. This problem has been provoked mainly by an unsynchronized and uncoordinated decision-making process that involves public and private institutions. This chapter proposes the adoption of a dynamic performance management approach for enhancing a collaborative governance perspective aimed at supporting the strategic coordination in designing and implementing wind energy policies in Brazil. Using lessons learned from simulating the supply chain, key performance drivers for mitigating inconsistencies in decision-making processes are identified and discussed. The chapter updates and improves the findings of a research project recently developed by the authors (Herrera and Cosenz, The Electricity Journal, 32(8), 106636, 2019).

This paper aims to provide a better understanding of the impact of the rapid and large-scale inclusion of renewables in electricity markets. This depends significantly on the initial technology composition of each market. For instance, when there is a large hydroelectricity component, with significant reservoir capacity (i.e., storage capability that behaves as a battery to the system), the inclusion of renewables can apparently be achieved more quickly, and further it seems that a secure and low-cost transition to a 100% renewable power system can be achieved. A computational model was implemented for policy analysis of alternative capacity expansion scenarios, particularly seeking supply adequacy in the Colombian electricity context. This paper concludes that by 2035 a 100% renewable power system is feasible in Colombia, and that the complementarity between hydro, solar and wind energies is key for achieving supply adequacy – and without the need for fossil fuel facilities as a backup.

One of the primary challenges of the power industry, worldwide, is making the capacity investment appropriate for the achievement of security of supply. This challenge is becoming even more relevant as power generation is increasingly based on renewables that are intermittent and seasonally dependent. In this context, policy makers and regulators implement capacity mechanisms that seek to overcome the intrinsic shortcomings of renewables. Failing to do so, given the uncertainty and complexity involved, means either that excessive overcapacity will become persistent and remain idle, or that under-capacity will prompt blackouts and high electricity prices. To help manage the uncertainty and complexity, this paper contributes to a better understanding of the effects of the capacity mechanism on electricity markets with a high share of hydropower – by using a system dynamics modelling approach applied to Colombia. In the past, though the capacity mechanism induced large reserve margins, the system has been at serious risk of experience blackouts and has resulted in extremely high electricity prices over a prolonged period. In the future, worse scenarios are possible: historically-familiar events – when backup plants were not available – may recur when new capacity is delayed, posing an even greater threat to the system.

The regional integration of electricity markets has been established as desirable among the South American nations to meet demands through the possible consolidation of a unified competing market in the medium term (CAN, 2010). However, what remains to be defined are rules of the game with satisfactory benefits for all parties that have been demonstrated. In this paper we propose a model of power integration based on the Market Coupling scheme, which starts with the modeling of the national markets using the System Dynamics modeling methodology. As a result, the expected behavior of the system is obtained, except in the case of exports, in which, because of the assumption of an infinite transmission capacity between nations, it is seen to surpass the real values found in the market. The work presented in this document (based on two nations, Colombia and Ecuador) allows experimentation for the formulation of the rules of the game necessary in the regional integration of markets.

More than a decade ago, Colombia reached a 95% electrification rate. Despite efforts from multiple actors, including government, private sector companies, communities and donors, this rate has only barely improved. In 2020, around 1.9 million Colombians – all residing in rural areas – lacked access to electricity. The electrification challenge is compounded by the geographical isolation of these last mile communities, which makes interconnection to the national electricity grid infeasible. Even where off-grid communities do have access to electricity, supply is often limited to less than six hours per day raising questions about the adequacy of provision. This paper investigates last mile electrification in Colombia, specifically examining the policy framework and the outcomes for the sustainability of last mile projects. Drawing on document analysis, expert interviews and case studies, this paper finds that the government has created an overly complex policy environment which hinders rather than facilitates electrification efforts. It also continues prioritizing the use of diesel generators through costly supply-side subsidies, resulting in high operating costs and inadequate service. More recently, although renewable sources have shown good outcomes, for instance in the case studies examined here, these experiences have not been extensible disseminated. Finally, this paper argues that changes are required to the institutional framework to deliver electricity to last mile communities in Colombia. Specifically, if the multidimensional benefits of electricity are to be realized, changes will need to include improvements in public infrastructure to promoting intersectoral work that promotes socio-economic development of last mile communities and beyond.

Las fuentes no convencionales de energía renovable (FNCER) son fuentes de energía consideradas como una alternativa limpia para el suministro de electricidad frente a generación eléctrica a base de combustible fósiles. Además, son un medio por el cual se reduce el nivel de concentración en el mercado y la participación de la demanda se pueden dar. En este artículo se presenta diferentes mecanismos de integración de estas fuentes en el mercado, y se analiza su efecto sobre el precio de la electricidad en Colombia. Bajo las condiciones de simulación definidas, los resultados indican que una participación del 20% de las FNCER en el cubrimiento de la demanda de forma distribuida genera una reducción del 22% en el precio de la electricidad en el largo plazo.

As the electricity industry is changing worldwide, the swift expansion of basic forms of Distributed Generation (DG), particularly photovoltaic deployment, threatens the current utility business models that during the transitional stages may challenge the reliability of electricity systems and societal welfare. These findings are matters of major concern to policy makers as the shift towards more decentralized power systems must be sustainable, and although this brings great opportunities, it also pauses important challenges. The transition calls for policy and regulation attention. For some researchers, DG development should be accompanied with design changes to distribution tariffs, the addition of connection charge and modifications to Net Metering, while for others, certain of these measures could discourage DG investments. In this context and given multiple uncertainties, the authors propose a system dynamics model to examine the effect of the diffusion of Photovoltaic technology on the revenues of utilities and customers. The paper concludes that for the Colombian case, it is possible under certain conditions to attain a balance between social welfare and the aversion of the utility death spiral through systemic interventions.

The rapid growth of the wind industry in Brazil presents new opportunities and challenges for its electricity industry. As new capacity becomes available, more transmission infrastructure is required for security of supply. The Brazilian electricity system has experienced congestion in the northeast region, affecting the coordinated expansion of transmission and new wind power capacity. This paper uses a simulation model for better assessing long-term policy synchrony of the wind industry. The simulation shows that the resulting prices are competitive in the middle to long terms.

In the late 1980s, Argentina faced frequent blackouts due to a lack of investment in generation capacity and high electricity demand growth. Argentina was one of the first developing countries to implement the liberalisation and privatisation of public utilities. In 2015, the Argentine electricity market faced a crisis due to low capacity investment. This arose from consumer prices that poorly reflected the true electricity cost, increasing risk for companies to invest in new generation capacity. Since 2016, Argentine government has called an auction to increase generation capacity; in addition, the government has cut incentive to consumers looking for reduce the electricity demand. Moreover, Argentina’s government is promoting policies to increase renewable energy share. However, it is unknown how renewable energies may affect security of supply and electricity price. This paper presents a simulation model to analyse policies for increasing generation capacity and promote renewable energy in Argentina. In this paper is concluded that renewable energies do indeed reduce the energy dependency of fossil fuels, and they lead to reduce electricity prices.In the late 1980s, Argentina faced frequent blackouts due to a lack of investment in generation capacity and high electricity demand growth. Argentina was one of the first developing countries to implement the liberalisation and privatisation of public utilities. In 2015, the Argentine electricity market faced a crisis due to low capacity investment. This arose from consumer prices that poorly reflected the true electricity cost, increasing risk for companies to invest in new generation capacity. Since 2016, Argentine government has called an auction to increase generation capacity; in addition, the government has cut incentive to consumers looking for reduce the electricity demand. Moreover, Argentina’s government is promoting policies to increase renewable energy share. However, it is unknown how renewable energies may affect security of supply and electricity price. This paper presents a simulation model to analyse policies for increasing generation capacity and promote renewable energy in Argentina. I...

Natural gas is considered the fuel of the transition of fossil sources and renewable energies. This is why demand levels have increased worldwide, which requires the intervention of public and private actors to meet these requirements. Participation in the supply of diverse interconnected actors of the provider-client form, a supply chain for natural gas, in which the effects of the application of the policies that can be analyzed in time, through the use of a Model Based on Systems Dynamics for the Colombian case. The results of the model show the behavior of reserve levels, production, and transport against the levels of implementation of the policies formulated by the national government, which allows recommending actions to decision makers in the planning of policies aimed at a guarantee the uninterrupted supply of this resource.

Despite a growing sense of urgency, the deployment of clean technologies has been affected by fragmentation of energy policy design and implementation. In some case, wicked policy issues around renewable energy infrastructure have delayed or even halted the uptake of renewables. To find possible answer to consistent policy design that involves public/private institutions of the electricity sector, the authors propose the adoption of a dynamic performance management approach to support the energy policy coordination.

The Colombian power sector is highly dependent on hydroelectricity, making it vulnerable to both annual dry seasons and the droughts brought by the El Nino-Southern Oscillation (ENSO). One efficient way to reduce such vulnerabilities is by introducing renewable energies that may complement the availability of hydroelectricity. This paper explores the degree of complementarity between solar and wind resources in Colombia and the country's hydropower sector, on both annual and interannual scales. Various correlation analyses are performed over four climatic variables: water inputs (runoff), precipitation, solar radiation, and wind speed, plus the Oceanic Nino Index (ONI), which helps to characterize ENSO events. The analysis is carried out over different geographic locations and seasons. The results indicate that solar and wind resources, particularly those in the Caribbean Coast and the central Andes regions, complement the hydropower sector during both the dry seasons of the annual climatological cycle and ENSO's warm and cold phases. Also, they show that complementarity varies, not just with the type of sources and location, but also with the seasons of the year and ENSO's stage of development. This paper provides an enhanced perspective on the behavior of renewables and offers an alternative viewpoint for designing the future expansion of power systems.