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Published: 07 December 2016 07 December 2016

Transitioning to a fully renewable electricity system is possible for South America by 2030. A study by Lappeenranta University of Technology (LUT) and VTT Technical Research Centre of Finland Ltd. also shows that a 100 per cent renewable system (100% RE) is the cheapest electricity production option and can be achieved with very few energy storages.

South America has a unique renewable energy resource base since one of the best wind sites globally is in Patagonia, the best solar energy sites are in the Atacama Desert, hydro power is already used in large amounts and the sustainable biomass potential is significant. The cost of electricity in a 100% RE system ranges between € 47 to € 62 per megawatt hour, depending on the applied assumptions. In comparison, other options, including new nuclear and carbon capture and storage (CCS), are 75-150 per cent higher in cost than the 100% RE.

The total installed capacity of renewable electricity in the fully renewable system is composed of 415GW of solar photovoltaics, 144GW of hydro dams, 39GW of hydro run-of-river, 17GW of biogas, 4GW of biomass and 69GW of wind power. The abundance of solar and wind power in South America as well as the high capacity of hydro dams means that the region does not need many energy storages. Hydro dams can be used as a virtual battery for solar and wind electricity storage, balancing generation and demand in times of lacking solar of wind electricity during the course of the year. The study also showed that if the current industrial natural gas demand in South America is replaced by power-to-gas technology, the need for energy storages will plummet. This is called system integration in which power-to-gas, but also other technologies, increase the flexibility of the electricity system without the need for large energy storages. This flexibility lowers the cost of electricity. This integration is estimated to save up to € 13 billion.

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