Regret Cost Analysis of the Generation Expansion Plans of Uruguay 2024-2033

The regret costs of possible electricity generation expansion plans in Uruguay in the 2024–2033 horizon are analyzed. The main sources of uncertainty are identified and the costs associated with decision-making are evaluated, assuming that the wrong scenario will be verified, considering an adaptation strategy to mitigate the cost overrun. The study concludes that it is better to quickly install a new generation, assuming the maximum demand, even if the occurrence of the considered additional flat demand is not verified.

I. Introduction

The Generation Expansion Planning (GEP) is a traditional, necessary and permanent discipline that has added in recent decades the challenge of managing the strong irruption of the non-conventional renewable energies . Work [1] describes the complex context in which decisions must be made and the inadequacy of not having established methodologies to manage the risks of investment decisions. In Uruguay, an important part to give reliability and transparency to the electricity market has been overcome and there are a series of calculation tools for the optimal dispatch of the electricity system accepted by all parties.The [2] tool integrates all the components of the electrical system in sufficient detail, and in particular models the uncertainties of the resources based on their statistical history and trend projections. For example, this is how the price of fossil fuels is modeled, an external variable with the greatest volatility and impact on the risk profiles of the in Uruguay. The other two important risk components are the future cost of the expansion technologies and the Net Demand to be supplied. This study proposes a methodology to analyze the in antagonistic scenarios of the , an aspect that is ultimately the greatest risk of the in Uruguay.