IDEAS home Printed from https://ideas.repec.org/a/eee/energy/v243y2022ics0360544221032710.html
   My bibliography  Save this article

Estimating the adequacy revenue considering long-term reliability in a renewable power system

Author

Listed:
  • Machado, Renato Haddad Simões
  • Rego, Erik Eduardo
  • Udaeta, Miguel Edgar Morales
  • Nascimento, Viviane Tavares

Abstract

The growing participation of variable renewable sources, with production costs close to zero, requires the review of electricity markets to guarantee security of supply. This work evaluates the dependence on additional revenue of different technologies that provide long-term reliability in a predominantly hydropower system, with model-based spot price, that considers generators variable production cost, and price cap. Using the future configuration of Brazilian Ten-Years Plan, each technology's revenue is estimated and then compared with investments required. Results demonstrate that, in systems with this market design, only technologies with a high dispatch factor can cover the investments solely with revenues from selling their production. For wind and solar plants, in 35% of scenarios, this income is sufficient to cover the investments. On the other hand, thermopower has more than 90% of scenarios where net income is nil, indicating that adequacy remuneration should cover investments. Battery storage and demand response are also analyzed. As the final income for a project will be given by the sum of different revenues, technologies that don't depend on a certain product may exercise market power and render ones that depend on that revenue infeasible, even if this solution isn't the most efficient for the system.

Suggested Citation

  • Machado, Renato Haddad Simões & Rego, Erik Eduardo & Udaeta, Miguel Edgar Morales & Nascimento, Viviane Tavares, 2022. "Estimating the adequacy revenue considering long-term reliability in a renewable power system," Energy, Elsevier, vol. 243(C).
    • Handle: RePEc:eee:energy:v:243:y:2022:i:c:s0360544221032710
    DOI: 10.1016/j.energy.2021.123022
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0360544221032710
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.energy.2021.123022?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. Weitemeyer, Stefan & Kleinhans, David & Vogt, Thomas & Agert, Carsten, 2015. "Integration of Renewable Energy Sources in future power systems: The role of storage," Renewable Energy, Elsevier, vol. 75(C), pages 14-20.
    2. Gondia Sokhna Seck & Vincent Krakowski & Edi Assoumou & Nadia Maïzi & Vincent Mazauric, 2020. "Embedding power system's reliability within a long-term Energy System Optimization Model: Linking high renewable energy integration and future grid stability for France by 2050," Post-Print hal-02418375, HAL.
    3. Bjørndal, Endre & Bjørndal, Mette & Midthun, Kjetil & Tomasgard, Asgeir, 2018. "Stochastic electricity dispatch: A challenge for market design," Energy, Elsevier, vol. 150(C), pages 992-1005.
    4. McPherson, Madeleine & Stoll, Brady, 2020. "Demand response for variable renewable energy integration: A proposed approach and its impacts," Energy, Elsevier, vol. 197(C).
    5. Cuervo, Felipe Isaza & Botero, Sergio Botero, 2016. "Wind power reliability valuation in a Hydro-Dominated power market: The Colombian case," Renewable and Sustainable Energy Reviews, Elsevier, vol. 57(C), pages 1359-1372.
    6. Söder, Lennart & Tómasson, Egill & Estanqueiro, Ana & Flynn, Damian & Hodge, Bri-Mathias & Kiviluoma, Juha & Korpås, Magnus & Neau, Emmanuel & Couto, António & Pudjianto, Danny & Strbac, Goran & Burke, 2020. "Review of wind generation within adequacy calculations and capacity markets for different power systems," Renewable and Sustainable Energy Reviews, Elsevier, vol. 119(C).
    7. Pupo-Roncallo, Oscar & Campillo, Javier & Ingham, Derek & Hughes, Kevin & Pourkashanian, Mohammed, 2019. "Large scale integration of renewable energy sources (RES) in the future Colombian energy system," Energy, Elsevier, vol. 186(C).
    8. Coester, Andreas & Hofkes, Marjan W. & Papyrakis, Elissaios, 2018. "An optimal mix of conventional power systems in the presence of renewable energy: A new design for the German electricity market," Energy Policy, Elsevier, vol. 116(C), pages 312-322.
    9. Seck, Gondia Sokhna & Krakowski, Vincent & Assoumou, Edi & Maïzi, Nadia & Mazauric, Vincent, 2020. "Embedding power system’s reliability within a long-term Energy System Optimization Model: Linking high renewable energy integration and future grid stability for France by 2050," Applied Energy, Elsevier, vol. 257(C).
    10. Meha, Drilon & Pfeifer, Antun & Duić, Neven & Lund, Henrik, 2020. "Increasing the integration of variable renewable energy in coal-based energy system using power to heat technologies: The case of Kosovo," Energy, Elsevier, vol. 212(C).
    11. Domínguez, R. & Carrión, M. & Oggioni, G., 2020. "Planning and operating a renewable-dominated European power system under uncertainty," Applied Energy, Elsevier, vol. 258(C).
    12. RuthDominguez & Giorgia Oggioni & Yves Smeers, 2019. "Reserve procurement and flexibility services in power systems with high renewable capacity: Effects of integration on different market designs," LIDAM Reprints CORE 3019, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    13. Sarker, Eity & Seyedmahmoudian, Mehdi & Jamei, Elmira & Horan, Ben & Stojcevski, Alex, 2020. "Optimal management of home loads with renewable energy integration and demand response strategy," Energy, Elsevier, vol. 210(C).
    14. Mastropietro, Paolo & Rodilla, Pablo & Rangel, Lina Escobar & Batlle, Carlos, 2020. "Reforming the colombian electricity market for an efficient integration of renewables: A proposal," Energy Policy, Elsevier, vol. 139(C).
    15. Wang, Jianzhou & Hu, Jianming & Ma, Kailiang, 2016. "Wind speed probability distribution estimation and wind energy assessment," Renewable and Sustainable Energy Reviews, Elsevier, vol. 60(C), pages 881-899.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Arias-Gaviria, Jessica & Arango-Aramburo, Santiago & Lamadrid L, Alberto J., 2022. "The effects of high penetrations of renewable energy sources in cycles for electricity markets: An experimental analysis," Energy Policy, Elsevier, vol. 166(C).
    2. Dongwei Zhao & Sarah Coyle & Apurba Sakti & Audun Botterud, 2022. "Market Mechanisms for Low-Carbon Electricity Investments: A Game-Theoretical Analysis," Papers 2212.06984, arXiv.org, revised Aug 2023.

    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. Østergaard, P.A. & Lund, H. & Thellufsen, J.Z. & Sorknæs, P. & Mathiesen, B.V., 2022. "Review and validation of EnergyPLAN," Renewable and Sustainable Energy Reviews, Elsevier, vol. 168(C).
    2. Gul, Eid & Baldinelli, Giorgio & Bartocci, Pietro & Shamim, Tariq & Domenighini, Piergiovanni & Cotana, Franco & Wang, Jinwen & Fantozzi, Francesco & Bianchi, Francesco, 2023. "Transition toward net zero emissions - Integration and optimization of renewable energy sources: Solar, hydro, and biomass with the local grid station in central Italy," Renewable Energy, Elsevier, vol. 207(C), pages 672-686.
    3. Cao, K.H. & Qi, H.S. & Tsai, C.H. & Woo, C.K. & Zarnikau, J., 2021. "Energy trading efficiency in the US Midcontinent electricity markets," Applied Energy, Elsevier, vol. 302(C).
    4. Brumana, Giovanni & Franchini, Giuseppe & Ghirardi, Elisa & Perdichizzi, Antonio, 2022. "Techno-economic optimization of hybrid power generation systems: A renewables community case study," Energy, Elsevier, vol. 246(C).
    5. Gonzalez-Moreno, A. & Marcos, J. & de la Parra, I. & Marroyo, L., 2022. "A PV ramp-rate control strategy to extend battery lifespan using forecasting," Applied Energy, Elsevier, vol. 323(C).
    6. Mohseni, Soheil & Brent, Alan C. & Kelly, Scott & Browne, Will N., 2022. "Demand response-integrated investment and operational planning of renewable and sustainable energy systems considering forecast uncertainties: A systematic review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 158(C).
    7. Pietzcker, Robert C. & Osorio, Sebastian & Rodrigues, Renato, 2021. "Tightening EU ETS targets in line with the European Green Deal: Impacts on the decarbonization of the EU power sector," Applied Energy, Elsevier, vol. 293(C).
    8. Christos Agathokleous & Jimmy Ehnberg, 2020. "A Quantitative Study on the Requirement for Additional Inertia in the European Power System until 2050 and the Potential Role of Wind Power," Energies, MDPI, vol. 13(9), pages 1-14, May.
    9. Loisel, Rodica & Lemiale, Lionel & Mima, Silvana & Bidaud, Adrien, 2022. "Strategies for short-term intermittency in long-term prospective scenarios in the French power system," Energy Policy, Elsevier, vol. 169(C).
    10. Pampa Sinha & Kaushik Paul & Sanchari Deb & Sulabh Sachan, 2023. "Comprehensive Review Based on the Impact of Integrating Electric Vehicle and Renewable Energy Sources to the Grid," Energies, MDPI, vol. 16(6), pages 1-39, March.
    11. Groissböck, Markus & Gusmão, Alexandre, 2020. "Impact of renewable resource quality on security of supply with high shares of renewable energies," Applied Energy, Elsevier, vol. 277(C).
    12. Meha, Drilon & Pfeifer, Antun & Sahiti, Naser & Rolph Schneider, Daniel & Duić, Neven, 2021. "Sustainable transition pathways with high penetration of variable renewable energy in the coal-based energy systems," Applied Energy, Elsevier, vol. 304(C).
    13. Thimet, P.J. & Mavromatidis, G., 2022. "Review of model-based electricity system transition scenarios: An analysis for Switzerland, Germany, France, and Italy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 159(C).
    14. Laha, Priyanka & Chakraborty, Basab, 2021. "Cost optimal combinations of storage technologies for maximizing renewable integration in Indian power system by 2040: Multi-region approach," Renewable Energy, Elsevier, vol. 179(C), pages 233-247.
    15. Fan, Jing-Li & Huang, Xi & Shi, Jie & Li, Kai & Cai, Jingwen & Zhang, Xian, 2023. "Complementary potential of wind-solar-hydro power in Chinese provinces: Based on a high temporal resolution multi-objective optimization model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 184(C).
    16. Nikita Belyak & Steven A. Gabriel & Nikolay Khabarov & Fabricio Oliveira, 2023. "Renewable Energy Expansion under Taxes and Subsidies: A Transmission Operator's Perspective," Papers 2302.10562, arXiv.org, revised Apr 2024.
    17. Wilson Pavon & Manuel Jaramillo & Juan C. Vasquez, 2023. "A Review of Modern Computational Techniques and Their Role in Power System Stability and Control," Energies, MDPI, vol. 17(1), pages 1-17, December.
    18. Sasaki, Kento & Aki, Hirohisa & Ikegami, Takashi, 2022. "Application of model predictive control to grid flexibility provision by distributed energy resources in residential dwellings under uncertainty," Energy, Elsevier, vol. 239(PB).
    19. Brito-Pereira, Paulo & Mastropietro, Paolo & Rodilla, Pablo & Barroso, Luiz Augusto & Batlle, Carlos, 2022. "Adjusting the aim of capacity mechanisms: Future-proof reliability metrics and firm supply calculations," Energy Policy, Elsevier, vol. 164(C).
    20. Wang, Tianjing & Tang, Yong, 2022. "Transfer-Reinforcement-Learning-Based rescheduling of differential power grids considering security constraints," Applied Energy, Elsevier, vol. 306(PB).

    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:energy:v:243:y:2022:i:c:s0360544221032710. 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.journals.elsevier.com/energy .

    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.