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The first of all the factors, that is already analyzed before with a graph of cost versus capacity of the pipeline has a clear effect on the rates, because there are economies of scale in the transport of gas, the average costs decrease with the amount of gas transported, by what the rates, as it is logical to think, also decreased by increasing the capacity of the pipeline.
The second factor, is also of great importance, as the degree of market development is an indicator to some extent of the levels of demand which will take gas in the country in question, and is also correlated with the last factor, because the use of the pipeline depends on the degree of development of the gas market.
You will then need to do a more detailed analysis of the effects of natural gas in Chile and its central interconnected system. There was a large State-owned company (ENDESA) which performed the generation, transmission and distribution of electricity in a monopolistic and integrated vertically in Chile before the deregulation process. This company mainly generated with hydroelectric power stations.
Once the market is deregulated this company was privatized and retained most of the generation and water rights, thus limiting competition at the level of generation and the possibility that new companies come to produce electricity hydraulically.…