Economic impacts of incorporating battery energy storage systems (BESS) in the Chilean power system expansion planning, considering BESS degradation and multiple BESS pricing mechanisms - 2025/2028

This study analyzes the economic impacts of incorporating battery energy storage systems (BESS) into the expansion planning of the Chilean power system, taking into account battery degradation and various pricing schemes. As Chile advances in its energy transition with a high penetration of variable renewable energy sources, BESS emerge as a key solution to enhance system flexibility and reliability. However, their integration requires evaluating not only the technical benefits but also the costs associated with battery aging and market signals.

The study incorporates models that simulate the real behavior of batteries over time, along with scenarios involving uniform, differentiated, or dynamic pricing. The results show that planning which properly accounts for degradation and appropriate pricing maximizes the system’s economic and operational benefits. Moreover, it helps avoid overinvestment and promotes a more efficient and resilient expansion of the national power system.

Funding Program: Fondecyt

Project Duration: 36 months

Principal Investigator: Enzo Enrique Sauma Santis