Distributed Generation in Brazil

Energy Integration

Installed Capacity

Total: 110.203 MW

Evolution of Generation in 2008, 2009 and 2010

Alternative SourcesTotal: 11.415 MW

SHPs: Small Hydroelectric Plants

Incentives for Renewable Energy

• Incentive Program for Alternative Sources (Programa de Incentivo a las Fuentes Alternativas PROINFA): It ensures to the producers of electrical energy the sale of energy to Eletrobrás, for a pre-set price.

• Tariff reduction: Reduction of more than 50% in tariffs for use of the system for projects whose power injected to the system is ≤ 30 MW.

• Sale alternatives:

• Most buyers of energy regarded to conventional generators because of the special consumers.

• Exclusive auction in the Regulated Contracting Environment (RCE) for wind power, biomass and other alternative sources.

Renewable Energy Sale Alternatives

• Regulated Market: Sale to distribution companies in auctions with prices regulated in the RCE (exclusive auction for alternative sources).

• Electric Power Commercialization Chamber (Câmara de Comercialização de Energia Elétrica CCEE): Sale to the CCEE in reserve auction (exclusive auction for wind power in 2009 and for biomass in 2008).

• Local distribution company: Sale to the local distribution company to limited prices according to a reference value established in the case of distributed generation (generator connected directly to the distribution company ).

• Free market (Free Contracting Environment - FCE): Sale to generators, trading companies, free consumers and special consumers in the FCE.

PROINFA - Exchange of Energy and Financial Resources

TUDS: Tariff of Use of Distribution Systems.TUTS: Tariff of Use of Transmission Systems.

PROINFA - Units in Operation

PROINFA - Generation in 2007, 2008, 2009 and 2010

Free Contracting Environment – Evolution of the demand

26,5% of the energy was traded in the Free Market in June of 2010

Free Contracting EnvironmentContracting of Incentivated Energy

Evolution of Purchasing of Free and Special Consumers

Energy Auctions

• Distribution Agents purchase energy, mainly, through auctions in the FCE:

• Auctions of existing ventures.

• Auctions of new ventures.

• Auctions of alternative sources.

• Setting Auctions.

• Distributors and free consumers must acquire energy reserves through auctions.

Total Traded in Auctions

Values updated to July 2010

Evolution of the Results of the Energy Auctions

ExistingNew wind power

New hydraulic New thermal

Traded quantities

Participation of Alternative Sources in New Ventures Auctionsand Energy Reserve

So far, there is a small participation of Small Hydroelectric Plants in the energy auctions.

Total Traded:

22.719 [MW Average]

Ancillary Services Pricing of Distributed Generators

Distributed Generation• Wind Turbines.• Photovoltaics.

• Small Hydroelectric Plants.• Biomass Systems.• Combined Cooling Heating and Power (CCHP).• Storage systems.

Depend on the variations of the primary energy source (wind, sun)

Do not depend on the variations of the primary energy source

Ancillary Services

• Frequency control.

• Active power reserve for frequency control.

• Reactive power support.

• Black-start.

Ancillary service initially studied

Technological Capacities of Distributed Generators to DeliverAncillary Services

WTG: Wind Turbine GeneratorPh: Photovoltaics.SHP: Small Hydroelectric Plants.CCHP: Combined Cooling Heating and Power (thermal or electrical).

GInv: Generator with power electronic inverter.SG: Synchronous Generator.DFIG: Double Feed Induction Generator.IG: Induction Generator.

Problem Definition

With smart grids being promoted, technological advances, rising global fuel prices, and concerns relating to climate change, it appears reasonable to assume that ancillary services could also be provided by DGs in an economical and efficient way.

Costs of Reactive Power Support of Distributed Generators

• Additional investment costs.

• Over-sizing to increase capacity: In the case of the DGs that are not operating at full load all the time, the reactive power capability is available with some probability without additional investment.

• Additional operating costs.

• Losses costs: Costs for internal losses in the DGs. In this study, they are considered insignificant.

• Opportunity costs: If the DG has to reduce its active power generation to meet any additional reactive power requirement, then the DG must be paid to cover costs for lost sales opportunity of active power.

Considered in this study as the most important elements for the pricing of reactive power support provided by DGs.

Reactive Power Support Pricing for DGs Without Uncertainties in the Primary Energy Source – Distribution Systems

Assumptions:

• The study is done from the standpoint of the Distribution System Operator.

• DGs that are not highly dependent on primary source variability are considered.

• Additional investment costs are not considered.

• Costs of internal losses in DGs are not included for payment for the service.

Solution methodology:

• Multi-objective optimization problem:• Minimization of active power losses in the lines of the system.• Minimization of costs of active power generation of the DGs.• Maximization of the static voltage stability margin of the system.

• Power flow modeling the system with compensation for PV-busses type (DGs).

AlgorithmFlow chart of the proposed multi-objective algorithm:

The solution with the best static voltage stability margin between all the solutions of the Pareto optimal front is chosen.

With the chosen solution, and a reference solution (a solution in an initial operating point), the opportunity costs are calculated.

Assumptions:

• The study is done from the standpoint of the Distribution System Operator.• DGs that are highly dependent on primary source variability are considered.• Additional investment costs are not considered.• Costs of internal losses in DGs are not included for payment for the service.

Solution methodology:

• Power flows in multiple probabilistic scenarios (Monte Carlo Simulations).• Description of time series related to the active power generation of DGs through Markov Chains.• Multi-objective optimization problem:

• Minimization of active power losses in the lines of the system.• Minimization of costs of active power generation of the DGs.• Maximization of the static voltage stability margin of the system.

• Power flow modeling the system with compensation for PV-busses type (DGs).

Reactive Power Support Pricing for DGs With Uncertainties in the Primary Energy Source – Distribution Systems

Scheme of the Proposal

Discretization of the DGs power output for the Markov Chains formulation.

Example of transition probabilities from state 2 to other states.

After performing simulations on multiple probabilistic scenarios an enough number of times, several Pareto optimal fronts are obtained, of which the solution with the best static voltage stability margin is chosen to calculate the opportunity costs.

Optimal Allocation of GDs Providing Reactive Power SupportAssumptions:

• The study is done from the standpoint of the Distribution System Operator.• DGs that are highly dependent on primary source variability are considered.• Additional investment costs are not considered.• Costs of internal losses in DGs are not included for payment for the service.

Solution methodology:

• The problem is formed by an allocation sub-problem and an operating sub-problem:• Operating sub-problem: Solved using the Tabu Search algorithm.• Allocation sub-problem: Power flows in multiple probabilistic scenarios (Monte Carlo Simulations). Description of time series related to the active power generation of DGs through Markov Chains.

• Multi-objective optimization problem:• Minimization of active power losses in the lines of the system.• Minimization of costs of active power generation of the DGs.• Maximization of the static voltage stability margin of the system.

• Power flow modeling the system with compensation for PV-busses type (DGs).

Scheme of the Proposal

After performing simulations on multiple scenarios, multiple Pareto optimal fronts are obtained (each one of these solutions is associated with a set of allocation places for the DGs).

Using the criterion that is most convenient for the Distribution System Operator (costs, losses or voltage stability), a solution is chosen to calculate the opportunity costs.

Reactive Power Support Pricing for DGs – A Market ApproachAssumptions:

• The market has a monopsony structure: There is only one buyer → The System Operator.• The active power market has been solved and the active power generation has been decided. This allows the determination of the opportunity costs.• The requirement of reactive power in the short term is determined in a day-ahead basis.• The DGs have great influence on the transmission system.

Solution methodology:

• Initially, all participating DGs submit offers to the System Operator.• After receiving the offers, the System Operator settles the reactive power market.• With the results of the market settlement process, the System Operator establishes uniform market prices for all DGs.• Multi-objective optimization problem:

• Minimization of the System Operator payment burden.• Minimization of the deviation from contracted transactions of active power (ensuring compliance with contracts).• Minimization of active power losses in the lines of the system.

Scheme of the Proposal

All the selected providers receive uniform prices according to the highest offer accepted. This provides sufficient incentives for participants to offer based on their real costs.

To Do…

• Development of algorithms for the pricing of another ancillary services that could be delivered by DGs in distribution and transmission systems:

• Frequency control.• Active power reserve for frequency control.• Black-start.

• Analysis of results considering brazilian cases and international experience.

Antonio Padilha Feltrinpadilha@dee.feis.unesp.br

LaPSEE - Laboratório de Planejamento de Sistemas de Energia ElétricaDepartamento de Engenharia Elétrica

Faculdade de Engenharia de Ilha SolteiraUniversidade Estadual Paulista “Júlio de Mesquita Filho”