Distributed Generation in Brazil

Energy Integration

Installed Capacity
Total: 110.203 MW

Evolution of Generation in 2008, 2009

and 2010

Alternative Sources

SHPs: Small Hydroelectric Plants

Total: 11.415 MW

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 Eletrobrs, 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
(Cmara
de
Comercializao de Energia Eltrica 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

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 Environment

Contracting 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

Traded quantities

Existing
New wind power

New hydraulic

New thermal

Participation of Alternative Sources in New

Ventures Auctions
andparticipation
Energy Reserve
So far, there is a small
of Small Hydroelectric Plants
the energy auctions.

Total Traded:
22.719 [MW Average]

in

Ancillary Services Pricing of Distributed

Generators

Distributed
Generation
Wind Turbines.

Depend on the variations of

the primary energy source
(wind, sun)
Do not depend on the
variations of the primary
energy source

Photovoltaics.

Small Hydroelectric Plants.

Biomass Systems.
Combined Cooling Heating and Power
(CCHP).
Storage systems.

Ancillary
Services

Frequency control.
Active power reserve for frequency control.
Ancillary service
Reactive power support.
initially studied
Black-start.

Technological Capacities of Distributed

Generators to Deliver
Ancillary Services

WTG: Wind Turbine Generator

Ph: 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.

Flow chart of the proposed multiobjective algorithm:

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.

Reactive Power Support Pricing for DGs With

Uncertainties in the Primary Energy Source
Distribution Systems
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

Scheme of the Proposal

Example
of
transition
probabiliti
es
from
state 2 to
other
states.

Discretization of the DGs power

output for the Markov Chains
formulation.
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

Support
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:
The problem is formed by an allocation sub-problem and an operating subproblem:
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 Approach
Assumptions:
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 dayahead 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).

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
international experience.

considering

brazilian

cases

and

LaPSEE - Laboratrio de Planejamento de Sistemas de

Energia Eltrica
Departamento de Engenharia Eltrica
Faculdade de Engenharia de Ilha Solteira
Universidade Estadual Paulista Jlio de Mesquita
Filho

Antonio Padilha Feltrin

padilha@dee.feis.unesp.br