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This paper addresses the effect of the increasing wind penetration on the operating performance of a diversified electricity system comprising wind, thermal, hydro and other renewable power plants. A short term optimization model is used to run the exploration planning under different wind power scenarios. The seasonality of the hydro and wind regimes and the hourly variations of supply and demand are acknowledged in the model. Simulations for the Portuguese electricity system are presented in order to establish the use of the proposed model on supporting more informed decision making for future energy strategies. The cost savings and CO2 abatement potential of wind power are estimated along with the effects on the operating performance and costs of thermal power plants. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

Portugal has been demonstrating over the years a high dependence of imported fossil fuels, especially with regard to the transportation and electricity production sectors. The urgent need to balance supply and demand as well as the growing concern about environmental issues and reduction of external energy dependency justified an increasing interest in the exploitation of renewable energy sources (RES) looking for more efficient strategies in terms of economic and social or environmental dimensions. The electricity sector represented a clear example of this RES trend with European and Portuguese policies focused on strategies promoting renewable resources and energy efficiency. Following different studies already conducted in other countries, this paper presents an approach to a possible 100% renewable electricity scenario in Portugal, supported by the application of the model EnergyPLAN. The importance of the interconnection as stabilization measure for a system highly dependent on renewable energy sources of variable output is put in evidence. The results also established that the cost structure of each scenario is mainly driven by the low marginal cost of renewable technologies along with their high investment costs. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

Due to the increasing concern with sustainable development, renewable energy sources (RES) emerge as an important alternative for electricity production. In this context, for countries like Portugal, hydropower plants assume an important role and several incentives have been granted by the government to promote hydroelectric production. However, due to the deep economic and financial crisis of the last years, a change in the energy paradigm is taking place increasing the perceived risk factors for RES electricity producers. Therefore, this paper focus on identifying and assessing the impact of those risks associated with an investment in a small hydropower (SHP). Although the independent analysis of each risk variable showed that the project is worthwhile, the possibility of having a negative outcome was evident for the investment costs, discount rate and feed-in-tariffs variables. On the other hand, the results of the combined analysis are much less optimistic demonstrating that even under regulated tariffs the probability of having a negative NPV largely surpasses the probability of obtaining a positive ...

Biomass based power plants are one of the few renewable energy sources (RES) units that may be used as base load technologies, contributing also to the reduction of external energy dependency and of the greenhouse gas (GHG) emissions. The availability, heterogeneity and cost of the resource are however important barriers to the effective development and spread of these technologies. This paper aims to make a contribution to the evaluation of biomass power plants based on dedicated energy crops. The particular case of Portugal is analyzed and the strategic, environmental and economic interest of the project is evaluated under the present RES support schemes. The results suggest that the value of the assumed Feed-in Tariff (FIT) may not be enough to attract private investors' interest for these projects. The need for the creation of a specific FIT for this kind of biomass is highlighted and may be justified both by the perceived project risk and by the expected strategic and environmental value of these investments. ; This workwas financed by: the QREN e Operational Programme for Competitiveness Factors, the European Union e European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01- 0124-FEDER-011377 and Project ...

Biomass is a renewable energy source attracting increasing attention. At the EU level in the last years a set of activities and programs were implemented in order to support and promote the use of this source of energy. This study addresses the issue of biomass costs for electricity production and the importance of incentives schemes such as feed-in tariff for the economic development of the sector. An economic evaluation of the electricity production from biomass is presented, based on a survey of both financial and social costs applied to the Portuguese case. Economic assessment was carried out by taking into account three types of biomass: energy crops (miscanthus), forestry residues and municipal solid waste. Four set of costs were considered and included: cost of capital, cost of maintenance and operation, fuel costs and external costs. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01- 0124-FEDER-011377 and Project ...

The need for the inclusion of sustainable development issues in regulatory decision making highlights the importance to expand or modify traditional regulation models frequently used in some segments of the energy sector. These models have indeed been criticised on grounds of their emphasis on cost and financial efficiency. Aspects like the security of supply and climate change are major concerns of policy makers and must be properly assessed and integrated in the regulatory environment. The European Energy Regulators are already aware of the need to expand traditional regulation, beyond pure financial analysis. However, the sustainability concept is still strongly related to the environmental dimension alone and with the internalization of these externalities on the cost functions to be used. This paper presents a comparative study of different regulatory models in three European countries (UK, Portugal and Spain), focusing on the inclusion of sustainable development concerns on these models. This review indicates that regulatory authorities recognize the importance of the integration of the social and environmental dimension along with the economic one, but the formal design of such an integrated model is still emerging. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

Shaping a secure and sustainable energy future may require a set of transformations in the global energy sector. Although several studies have recognized the importance of Electric Vehicles (EVs) for power systems, no large-scale studies have been performed to assess the impact of this technology in energy systems combining a diverse set of renewable energies for electricity production and biofuels in the transportation sector such as the case of Brazil. This research makes several noteworthy contributions to the current literature, including not only the evaluation of the main impacts of EVs' penetration in a renewable electricity system but also a Life-Cycle Assessment (LCA) that estimates the overall level of CO 2 emissions resulted from the EVs integration. Findings of this study indicated a clear positive effect of increasing the share of EVs on reducing the overall level of CO 2 emissions. This is, however, highly dependent on the share of Renewable Energy Sources (RES) in the power system and the use of biofuels in the transport sector but also on the credits resulting from the battery recycling materials credit and battery reuse credit. Our conclusions underline the importance of such studies in providing support for the governmental discussions regarding potential synergies in the use of bioresources between transport and electricity sectors. ; The researchers further like to acknowledge the financial support by the National Council for Scientific and Technological Development (CNPq), Brazil. This work has been also supported by FCT e Fundaçao para a Ciência e Tecnologia within the R&D Units Project Scope: ...

Wrong investment decisions today can lead to situations in the future that will be unsustainable and lead eventually to the bankruptcy of enterprises. Therefore, good financial management combined with good capital investment decision-making are critical to survival and long-term success of the firms. Traditionally, the net present value (NPV) and discounted cash flow (DCF) methods are worldwide used to evaluate project investments. These techniques have been classified in two major groups: sophisticated and non-sophisticated. In the former group, techniques like the DCF methods (e.g. NPV and IRR) can be found. In the latter group, techniques like the Payback Period and the Accounting Rate of Return have been included. However given that, today investments are characterized by high risks and uncertainty, DCF methodologies are inadequate to deal with these issues. Some authors argue that only the techniques that can appropriately address the problem of uncertainty (like the Real Options theory) should be applied. In this paper, the major differences between DCF methods and Real Options (RO) theory will be analyzed. Using an example, the advantages of the RO theory, compared with other methods, such as the DCF methods, in the search of better decisions will be shown. This work is expected to contribute to an increase of application of the RO Theory, by showing this technique potential. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01- 0124-FEDER-011377 and Project ...

Renewable energy sources (RES) emerge as a necessary condition to achieve sustainable development. Traditional evaluation models relying mainly on discounted cash-flows fail to assess the strategic dimension of the investments in RES and do not allow for properly dealing with the risk and uncertainty of these particular projects. The diffusion of the renewable energy technologies are also affected by this features, so, the way investors evaluate their investments call for the use of more sophisticated evaluation techniques. Real options theory (ROT), gives the investor the ability to account for the value inherent in the flexibility to delay an irreversible investment into the future. This paper presents an application of the ROT to a photovoltaic investment project for the particular case of the Portuguese electricity market conditions. Special attention is given to the combination of learning curves and ROT aiming to provide a new approach to the sustainable development and diffusion possibilities of renewable energy technologies. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

Energy shortage, global warming, and climate change led to an increase in the use of alternative sources of energy, with renewable energy sources (RES) playing a fundamental role in this new energetic paradigm. However, the investment costs often constitute a major barrier to their spread use. Moreover, the overall benefits of renewable energy technologies are often not well understood and consequently they are often evaluated to be not as cost effective as traditional technologies. From the moment that the energy sector started a deregulation process, with a high level of competitiveness and associated increased market uncertainty, traditional project evaluation techniques alone became insufficient to properly deal with these additional risk and uncertainty factors. The diffusion of the renewable energy technologies is also affected by this feature. The way investors evaluate their investments call now for the use of more sophisticated evaluation techniques. Real options approach can deal with these issues and, as so, began to be considered and applied for the energy sector decision aid. This approach it is now extensively widespread in evaluating investment projects in the energy sector. A large set of applications in almost all fields of energy decision making, from electricity generation technologies appraisal to policy evaluation is available in the literature. However the use of this technique in the field of RES is still limited and worth to be analysed. This paper addresses this issue. A review of the current state of the art in the application of real options approach to investments in non-renewable energy sources and RES is presented, giving perspectives for further research in this field. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

Portugal has seen in recent years an increased growth of wind farm's deployment in its northern region, in accordance with national legal framework and current energy policies. The majority of existing academic studies focusing on impacts (benefits or costs) resulting from deployment of this technology, mainly addressee these aspects from a global point of view. Notwithstanding wind power projects have also been associated with significant impacts directly affecting local communities where these projects were implemented. This paper aims to identify such local impacts, reflecting local community's perspective through the use of interviews. A comparative analysis of the reported impacts and the way they are being perceived by the local stakeholders, with the results from previous studies on the topic was attempted. Results demonstrated that the majority of interviewees did not point out disadvantages significantly altering their quality of life, revealing a consensual acceptance of benefits from these projects. The major importance of this sort of energy investments and of associated benefits was recognized. Revenues attributed to Communal Land Commission, in charge of managing the land destined to wind farm deployment, were perceived as highly favourable, allowing to answer local community's needs. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

The variable electricity output of the renewable energy sources (RES) power plants, such as wind and hydro power technologies, is seen as an important challenge for the electricity system managers. This paper addresses the problem of an electricity system supported mainly on hydro, thermal and wind power plants, presenting a short-term model planning. A binary mixed integer non-linear optimization model for one year planning with hourly time step is described and applied to a system close to the expected Portuguese electricity scenario for the year 2020. The main objective of this paper was to analyze the impact that different levels of installed wind power and hydropower have in the operation of thermal power units. Besides that, the analysis of results demonstrate the influence that the characteristics of the seasons of the year has on the renewable power units electricity generation and by this way on the total production cost of the system. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

Wind power projects, despite comparatively to conventional energy sources being considered cleaner alternatives, are not devoid of side effects requiring accurate assessment in order to attain a sustainably managed process. This paper presents a detailed overview of the most pertinent environmental and human effects of wind farms, encompassing Landscape and visual effect; Shadow flicker effect; Electromagnetic interferences; Noise emission; Wildlife; Land occupation and usage; Water resources; Air quality and Carbon footprint; Socio-economic; Architectural or archeological patrimony impact perceptions. Impact management schemes (IMS) are proposed in order to expose strategies to effectively reduce identified negative outcomes, throughout the different phases of implementation of wind power projects. The IMS can give an important contribute to mitigate expected negative impacts and to avoid practices that might adversely influence community's perception. ; This work was financed by: the QREN Operational Programme for Competitiveness Factors, the European Union - European Regional Development Fund and National Funds – Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...

Over the last decades, models and concepts related to sustainable electricity planning decisions have been changed according to the society, energy policy objectives and concerns. New and clean energy technologies are emerging as major contributors for the achievement of a set of imposed goals, being the energy efficiency combined with renewable energy sources (RES) a key strategy for a sustainable future. Power planning based on optimization models plays an important role for, not only electricity industry decision making process, but also for all processes where complex decision must be made. Following the idea of sustainability combined with the emergence of RES, this study aims to present an on-going research project that involves the development of a set of mathematical models to be used on the electricity planning. Assuming a time period of 10 years and through scenario analysis, the expected impacts in terms of costs and CO2 emissions were evaluated. The behaviour of system when coal and gas fuel price varies is observed. The results put evidence the significant wind power and hydro power impacts on the electricity sector performance and demonstrate importance of these technologies to achieve the European Union goals for the sector. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01- 0124-FEDER-011377 and Project ...

Sustainable electricity power planning involves trade-offs between multiple goals. The different attributes of each technology or generation portfolio in terms of the attainment of society goals must be assessed and included in the planning models. Optimization models always played an important role for supporting complex planning decision making, from which the particular case of the electricity industry stands out. This study addresses energy policy and strategic central decisions, presenting a long-term model for electricity planning. A MILP problem is described, which addresses a mixed hydro-thermal-wind power system close to the Portuguese electricity case. Through scenario analysis, the expected impacts in terms of costs, CO2 emissions and external energy dependence are evaluated for a 10 years planning period. Based on the assumed cost information and on the imposed technical restrictions, the obtained results put in evidence the importance of coal power plants combined with new hydro power investments for minimum cost scenarios. ; This work was financed by: the QREN – Operational Programme for Competitiveness Factors, the European Union – European Regional Development Fund and National Funds- Portuguese Foundation for Science and Technology, under Project FCOMP-01-0124-FEDER-011377 and Project ...