A study of incentives to increase the use of DG in Colombia based on a System Dynamics

This paper presents a study on the penetration of

Distributed Generation (DG) under the consideration of a

proposal for trading, environmental, and technical incentives, in

the Colombian power system. Environmental and trading

incentives were quantified using international experiences.

Technical incentives were quantified considering the

remuneration received by generator agents providing Automatic

Generation Control, since it is the only ancillary service

recognized in Colombia. In addition, we built a system dynamics

model to evaluation the complete proposal. We found that the

current incentives presented in the Colombian regulation such as

tax breaks are insufficient to cover the total costs. Moreover,

environmental incentives can be an efficient way to promote

renewable energy use in Colombia, in order to achieve, more

generating capacity with less pollution indices; and technical

incentives in conjunction with environmental incentives can

improve further the growth of DG in Colombia. Thus, the DG

diffusion becomes an additional tool for the operator of the

interconnected system to make voltage control, improve the

quality, and security of electrical power systems.