| Summary/Abstract |
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.
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