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Publication · Working paper

Projection of NCRE curtailment and measure effectiveness

An independent projection of wind and solar curtailment in the Chilean system for 2023, and of how much the short-term measures on the table would reduce it.

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In early 2023 the Ministry of Energy's agenda put forward two short-term measures against wind and solar curtailment: making thermal plant operation more flexible and using existing transmission to the full. This document settles how much curtailment they would actually avoid, with an hourly simulation of 2023 operation in the medium- and short-term models of the AMEBA platform, over the fleet the Coordinator considered operational as of 1 March 2023.

The short-term measures do not move the needle

In the base case, wind and solar curtailment for 2023 reaches 12.3% —450 GWh of wind and 4,412 GWh of solar, close to 5,000 GWh, a little over three times what was curtailed in 2022— while wind and solar penetration rises to 40% from 28% in 2022. The two sensitivities, which are upper bounds, barely correct it:

  1. No technical or flexibility constraints on the generation fleet —no technical minimums, start-up costs or reserves—: 8.0%.
  2. Kimal–Polpaico at the conductor limit set in the Coordinator's 2022 Transmission Constraints Study: 11.5%.

Where they do help is price decoupling: the average hourly north-centre difference, about 45 USD/MWh in the base case, falls to about 25 USD/MWh in the first sensitivity and is minimal in the second.

Daytime oversupply is unavoidable

Around 3.3 GW of solar PV and 1.4 GW of wind enter operation in 2023, between small distributed generation and utility scale. Adding hydro, from October onwards available renewable output far exceeds total system demand during daylight hours, even with coal plants taken out of operation.

Storage: effective, but with falling revenue

With BESS sized in proportion to curtailment at each node, 1.6 GW of 4 hours brings curtailment down to 7.5% and 4.8 GW of 6 hours takes it to 0.5%. The problem is revenue: the captured price falls from 97.3 to 12.9 USD/MWh between those two cases, because at those volumes storage stops being a price taker and closes the day-night arbitrage spread. With a 4-hour LCOS above 100 USD/MWh, deployment will depend on the capacity market and ancillary services.