Using Smart-Grids Capabilities as a Natural Hedge Against Novel Risks Coming from Non-conventional Renewable Electricity Generation

Whether due to economic pressure or environmental concerns, the penetration rate of renewable energies has been increasing over recent years. Uruguay is a leader country in the usage of renewable energies, getting 98% of its electricity from such sources. Its lack of fossil energy resources has historically pushed this country to rely on hydro-energy. Recently, in a scenario where most natural hydro-resources have been deployed, Uruguay has moved to non-conventional renewable energies, to biomass and wind power mostly, although nowadays solar sources are rapidly increasing. As clean and financially stable as they are, non-conventional energies have weaknesses. Unlike thermic and most hydro-sources, wind and solar energies are not controllable, are intermittent and uncertain some hours ahead, complicating the short-term operation and maintenance of electrical systems. This work explores how to use smart-grids capabilities to adjust electricity demand as a natural hedge against novel short-position risks in the Uruguayan electricity market.