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Newsletter ACERA - Marzo 2018


PARQUE EÓLICO PUNTA SIERRA Technology: Wind Company in charge of installation: GES Chile Assembly period: 8 months Region: Coquimbo Injected grid: Sistema Eléctrico Nacional EDITORIAL A market design needs a deep and broad insight NEWS New Ministry of Energy, new Seremis Geothermal Working Group ends its first stage MARCH 2018 STATISTICS 102 MW of NCRE have begun their construction stage MEET OUR MEMBERS Building Energy Enertis

EDITORIAL Asociación Chilena de Energías Renovables y Almacenamiento AG. Editorial ACERA Ag. A market design needs a deep and broad insight In order to make progress in its economic, social and environmental development, Chile needs, among other things, to continue removing the remaining barriers that stand in the way of using efficiently and to its full extent its huge potential of all Non-Conventional Renewable Energies (NCRE), i.e. wind, photovoltaic, CSP, geothermal, biomass, marine and minihydraulic. To say otherwise would be merely not recognizing that Chile and the world are facing an unprecedented energy transition, driven by better costs and lower polluting emission. Therefore, the editorial article of the latest edition of the Electric Market Bulletin published by the Asociación de Generadores (Generators Association), entitled “Market Design for a strong participation of variable generation in the Chilean electric system”, draws our attention. The laudable objective of the study -according to the Association- is to “identify, based on a critical review of the Chilean electric market and an extensive review of the international experience, proposals for improving definition, purchase, recognition and allocation mechanisms with the flexibility required by an electric system developing into a generation matrix composed mainly of variable renewable sources, as is the case for the Chilean system”. The proposals contained in the study might contribute to the discussion aimed at identifying the regulatory elements that should be adopted by our electric market in the future. However, the survey does not comply with the expectations raised by its title, that is, a complete analysis of the market and the subsequent design but focuses instead only on analyzing the interaction of some renewable technologies with thermal power stations and proposing mechanisms which, according to the report, would improve the current market design. Consequently, its results cannot be understood as far-reaching proposals, duly substantiated and adapted to our electric market, and to the new reality imposed by NCREs, especially solar and wind. The study’s main limitation may probably be found in the first paragraphs of the Editorial, which prove its focus: “(…) VRE’s penetration may impair the way the electricity markets function, since these were designed in many cases for hydrothermal electric systems”. Thus, the real substance of the study is revealed, which is to take for granted that “normality” is to be found in the hydrothermal view prevailing in the last decades of the 20th century and rapidly becoming obsolete, rather than contributing to advance towards a modern and competitive market re-design for Chile. The analysis developed in the study, limited only to wind and solar PV energies, does not address either the increasing participation of all new renewable technologies, which should represent, as pledged by President Sebastián Piñera, 100% of the energy matrix by the year 2040. In view of the above, ACERA believes that the study lacks the depth and breadth expected from a “Market Design”, and its application might only be understood from the perspective of one sector: the Thermoelectric, which