Abstract for: Making progress towards defossilisation: modelling low-carbon policy for power generation
The need for regulating greenhouse gases (GHGs) sets out policy challenges as this should preserve a competitive environment within both power generation and energy-intensive industries. There are enormous uncertainties regarding the effect of GHGs on climate change in Latin America and its effect on the structure of the electricity sector in the future. In spite of the obvious threats, these conditions also provide opportunities not yet explored. A low- carbon policy aims at changes regarding: regulation, demand, supply, market structure, management and, in general, the competitiveness of the power generation industry. In this direction, it is not clear what structural changes should be adopted within the electricity sector. Also, what are the opportunities that this policy may offer? This article assesses the effect of GHGs policy on the Colombian electricity sector, based on system dynamics simulation. This paper indicates how emission costs and incentives in the electricity sector induce technology changes towards a low carbon economy.