IDEAS home Printed from https://ideas.repec.org/a/eee/eneeco/v140y2024ics0140988324006972.html
   My bibliography  Save this article

On the regulatory and economic incentives for renewable hybrid power plants in Brazil

Author

Listed:
  • Street, Alexandre
  • Prescott, Pedro

Abstract

The complementarity between renewable generation profiles has been widely explored in the literature. Notwithstanding, complex interactions between regulatory and economic frameworks add interesting challenges and opportunities for hybrid power plant investors, regulators, and planners. Focusing on the Brazilian power market, we study the alignment of incentives between the economically-optimized strategy of hybrid power plant investors and the efficient utilization of the transmission resources. To do that, we propose a decision model that co-optimizes the risk-adjusted strategy of a hybrid power plant owner comprising (i) the forward-market involvement, (ii) the contracted amount of network access, and (iii) the share of renewable sources composing the hybrid power plant. We also propose adjusting the current regulatory framework to consider a unified calculation for the Firm Energy Certificates of non-controllable renewable power plants, including hybrid units. Based on that, we ensure a non-discriminatory regulatory framework for renewables acknowledging the diversity of generation profiles that hybrid units may have due to their optimal hybridization shares and network-access contracting strategies. A case study using realistic data from the northeastern region of the Brazilian power system showcases strong economic incentives for hybridization with reduced transmission resource utilization.

Suggested Citation

  • Street, Alexandre & Prescott, Pedro, 2024. "On the regulatory and economic incentives for renewable hybrid power plants in Brazil," Energy Economics, Elsevier, vol. 140(C).
    • Handle: RePEc:eee:eneeco:v:140:y:2024:i:c:s0140988324006972
    DOI: 10.1016/j.eneco.2024.107989
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0140988324006972
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.eneco.2024.107989?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Brunekreeft, Gert & Neuhoff, Karsten & Newbery, David, 2005. "Electricity transmission: An overview of the current debate," Utilities Policy, Elsevier, vol. 13(2), pages 73-93, June.
    2. Maier, Sebastian & Street, Alexandre & McKinnon, Ken, 2016. "Risk-averse portfolio selection of renewable electricity generator investments in Brazil: An optimised multi-market commercialisation strategy," Energy, Elsevier, vol. 115(P1), pages 1331-1343.
    3. Herrera, Milton M. & Dyner, Isaac & Cosenz, Federico, 2019. "Assessing the effect of transmission constraints on wind power expansion in northeast Brazil," Utilities Policy, Elsevier, vol. 59(C), pages 1-1.
    4. Femke J. M. M. Nijsse & Jean-Francois Mercure & Nadia Ameli & Francesca Larosa & Sumit Kothari & Jamie Rickman & Pim Vercoulen & Hector Pollitt, 2023. "The momentum of the solar energy transition," Nature Communications, Nature, vol. 14(1), pages 1-10, December.
    5. Pfenninger, Stefan & Staffell, Iain, 2016. "Long-term patterns of European PV output using 30 years of validated hourly reanalysis and satellite data," Energy, Elsevier, vol. 114(C), pages 1251-1265.
    6. Alexandre Street, 2010. "On the Conditional Value-at-Risk probability-dependent utility function," Theory and Decision, Springer, vol. 68(1), pages 49-68, February.
    7. Jaramillo, O.A. & Borja, M.A. & Huacuz, J.M., 2004. "Using hydropower to complement wind energy: a hybrid system to provide firm power," Renewable Energy, Elsevier, vol. 29(11), pages 1887-1909.
    8. Hafiz Majid Hussain & Arun Narayanan & Pedro H. J. Nardelli, 2023. "Key Technologies for the Energy Internet," Springer Books, in: Michel Fathi & Enrico Zio & Panos M. Pardalos (ed.), Handbook of Smart Energy Systems, pages 183-193, Springer.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eccarius, Timo & Liu, Shu-Chiu, 2024. "Views of emerging sustainability leaders on the future of Transport: A Q study in a Taiwan tertiary education program," Transportation Research Part A: Policy and Practice, Elsevier, vol. 190(C).
    2. Kök, Ali & Billerbeck, Anna & Manz, Pia & Kranzl, Lukas, 2025. "Achieving climate neutrality in district heating: The impact of system temperature levels on the supply mix of EU-27 in 2050," Energy, Elsevier, vol. 315(C).
    3. Bamisile, Olusola & Acen, Caroline & Cai, Dongsheng & Huang, Qi & Staffell, Iain, 2025. "The environmental factors affecting solar photovoltaic output," Renewable and Sustainable Energy Reviews, Elsevier, vol. 208(C).
    4. de Guibert, Paul & Shirizadeh, Behrang & Quirion, Philippe, 2020. "Variable time-step: A method for improving computational tractability for energy system models with long-term storage," Energy, Elsevier, vol. 213(C).
    5. Plain, N. & Hingray, B. & Mathy, S., 2019. "Accounting for low solar resource days to size 100% solar microgrids power systems in Africa," Renewable Energy, Elsevier, vol. 131(C), pages 448-458.
    6. Marko Hočevar & Lovrenc Novak & Primož Drešar & Gašper Rak, 2022. "The Status Quo and Future of Hydropower in Slovenia," Energies, MDPI, vol. 15(19), pages 1-13, September.
    7. Lukas Kriechbaum & Philipp Gradl & Romeo Reichenhauser & Thomas Kienberger, 2020. "Modelling Grid Constraints in a Multi-Energy Municipal Energy System Using Cumulative Exergy Consumption Minimisation," Energies, MDPI, vol. 13(15), pages 1-23, July.
    8. Reinhold Lehneis & Daniela Thrän, 2024. "In 50 Shades of Orange: Germany’s Photovoltaic Power Generation Landscape," Energies, MDPI, vol. 17(16), pages 1-12, August.
    9. Steinegger, Josef & Hammer, Andreas & Wallner, Stefan & Kienberger, Thomas, 2024. "Revolutionizing heat distribution: A method for harnessing industrial waste heat with supra-regional district heating networks," Applied Energy, Elsevier, vol. 372(C).
    10. Behrang Shirizadeh, Quentin Perrier, and Philippe Quirion, 2022. "How Sensitive are Optimal Fully Renewable Power Systems to Technology Cost Uncertainty?," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    11. Omoyele, Olalekan & Hoffmann, Maximilian & Koivisto, Matti & Larrañeta, Miguel & Weinand, Jann Michael & Linßen, Jochen & Stolten, Detlef, 2024. "Increasing the resolution of solar and wind time series for energy system modeling: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 189(PB).
    12. Kandpal, Bakul & Backe, Stian & Crespo del Granado, Pedro, 2024. "Enhancing bargaining power for energy communities in renewable power purchase agreements using Gaussian learning and fixed price bargaining," Energy, Elsevier, vol. 309(C).
    13. Koh, Rachel & Kern, Jordan & Galelli, Stefano, 2022. "Hard-coupling water and power system models increases the complementarity of renewable energy sources," Applied Energy, Elsevier, vol. 321(C).
    14. Matija Kostelac & Lin Herenčić & Tomislav Capuder, 2022. "Planning and Operational Aspects of Individual and Clustered Multi-Energy Microgrid Options," Energies, MDPI, vol. 15(4), pages 1-17, February.
    15. Liu, Hailiang & Andresen, Gorm Bruun & Greiner, Martin, 2018. "Cost-optimal design of a simplified highly renewable Chinese electricity network," Energy, Elsevier, vol. 147(C), pages 534-546.
    16. Theofilos A. Papadopoulos & Kalliopi D. Pippi & Georgios A. Barzegkar-Ntovom & Eleftherios O. Kontis & Angelos I. Nousdilis & Christos L. Athanasiadis & Georgios C. Kryonidis, 2023. "Validation of a Holistic System for Operational Analysis and Provision of Ancillary Services in Active Distribution Networks," Energies, MDPI, vol. 16(6), pages 1-27, March.
    17. Vassilis M. Charitopoulos & Mathilde Fajardy & Chi Kong Chyong & David M. Reiner, 2022. "The case of 100% electrification of domestic heat in Great Britain," Working Papers EPRG2206, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    18. Géremi Gilson Dranka & Paula Ferreira, 2020. "Electric Vehicles and Biofuels Synergies in the Brazilian Energy System," Energies, MDPI, vol. 13(17), pages 1-22, August.
    19. Campion, Nicolas & Gutiérrez-Alvarez, Raúl & Bruce, José Tomás Figueroa & Münster, Marie, 2024. "The potential role of concentrated solar power for off-grid green hydrogen and ammonia production," Renewable Energy, Elsevier, vol. 236(C).
    20. Shirizadeh, Behrang & Quirion, Philippe, 2022. "The importance of renewable gas in achieving carbon-neutrality: Insights from an energy system optimization model," Energy, Elsevier, vol. 255(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:eneeco:v:140:y:2024:i:c:s0140988324006972. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/eneco .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.