This work analyzes the response of the electricity market to varied renewable and nonrenewable installed capacity scenarios while taking into account the variability of renewables due to seasonality and El Niño-Southern Oscillation (ENSO) episodes. A hybrid system dynamics/dynamic systems (SD/DS) model was developed by first deriving an SD hypothesis and stock-flow structure from the Colombian electricity supply and demand dynamics. The model’s dynamic behavior was then transformed into a Simulink model and analyzed using the DS tools of bifurcation and control theory to provide deeper insights into the system, both from a Colombian perspective and from the perspective of other market scenarios. Applying the developed hybrid model to the Colombian electricity market provided a detailed description of its dynamics under a broad range of permanent (fossil fuel) and variable (renewable) installed capacity scenarios, including a number of counterintuitive insights. Greater shares of permanent capacity were found to guarantee the security of supply and system robustness in the short-term (2021–2029), whereas greater shares of variable capacity make the system more vulnerable to increased prices and blackouts, especially in the long-term (2040–2050). These critical situations can be avoided only if additional capacity from either conventional or non-conventional generation is quickly installed. Overall, the methodology proposed for building the hybrid SD/DS model was found to provide deeper insights and a broader spectrum of analysis than traditional SD model analysis, and thus can be exploited by policy makers to suggest improvements in their respective market structures.
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