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| 1 |
ID:
109686
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| Publication |
2011.
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| Summary/Abstract |
While some countries have unbundled distribution and retailing, skeptics argue that the physical attributes of electricity make retailers redundant. Instead, it is claimed that passive pass through of wholesale prices plus regulated charges for transmission and distribution suffice for customers to benefit from competitive generation markets.
We review the Chilean experience with regulated retailing and pass through of wholesale prices. We argue that when energy wholesale prices are volatile and prices are stabilized, distortions emerge. Regulated retailers gain little by mitigating or correcting them. On the contrary, sometimes price distortions increase their profits. We estimate the cost of three distortions that neither regulated retailers nor the regulator have shown any interest in correcting.
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| 2 |
ID:
125852
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| Publication |
2013.
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| Summary/Abstract |
We compare the cost of generating electricity with coal and wind in Chile. On average, we estimate that the levelized cost of coal, including externalities, is $84/MWh. It is efficient to abate air pollutants (SOx, NOx and PM2.5) but not CO2. With abatement the cost wrought by environmental externalities equals $23/MWh or 27% of total cost. Depending on the price of coal, the levelized cost may vary between $72 and $99/MWh.
The levelized cost of wind is $144/MWh with capacity factor of 24%. This cost includes backup capacity to maintain LOLP, which equals $13/MWh or 9% of total cost. The levelized cost of wind varies between $107/MWh with capacity factors of 35% to $217/MWh with capacity factors of 15%.
Wind is competitive only with capacity factors around 35% and very high coal prices. Alternatively, a carbon price of $73/tCO2 ($268/tc) would make coal and wind equally costly. But this value implies a marginal damage at the 98th percentile of the distribution deduced from Tol's (2011) estimates, rather far from the mean, $16/tCO2 ($59/tc).
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