Hybrid power plants as an alternative to fit pumped-storage hydro in Brazilian electricity sector regulatory framework

Alternative sources of electricity have been growing recently despite their intermittence, which makes it impossible for these sources to guarantee constant and uninterrupted supply of electricity. Energy storage systems, such as pumped-storage (PS) power plants, can help to mitigate the intermittence of these sources. In Brazil, intense growth of intermittent sources has led the generation sector to high exposure to the spot market. Thus, Brazilian electricity sector has recently turned its attention to energy storage methods as a way of diminishing such exposure. However, Brazilian electricity-sector regulatory framework is not prepared for energy storage systems remuneration. This paper proposes a regulatory framework to insert hybrid electric generation units composed of PS and intermittent sources in Brazilian energy market. A linear optimization model exemplifies the operation of such system by minimizing costs for 1 day. The model was tested in three different scenarios, allowing comparison of operational costs and other aspects of the operation. The results demonstrate how a PS can help covering peak demand by storing energy to be used at moments when generation from intermittent sources is not sufficient. In the proposed regulatory framework for hybrid plants, expenses with spot market purchases can be diminished either by completely avoiding it or by purchasing only during lower demand level periods.