As part of the research series, conducted by Enel Foundation in cooperation with the leading consulting company CESI, looking at different scenarios for the development of Variable Renewable Energy Sources (VRES), particularly solar and wind in South America, the second cluster covers Argentina, Brazil and Uruguay.
The Reference scenario has been built starting from the available public domain information. The three main building blocks are: the yearly energy demand, the generation fleet and the structure of the transmission grid in Argentina, Brazil and Uruguay. The optimal VRES capacity was calculated by adjusting the generation expansion pattern with the amount of new VRES generation (PV and wind), taking into account their potential across the territory, their costs and performances. In the optimization process, the system operational constraints in terms of reserve to be warranted in each hour of the year, the limits in the power transfer capacity, the requirements on inertia and system stability were taken into account. In addition, a development of VRES technologies and the introduction of storage plants have been assumed, in order to consider that in 2030 they will be able to provide auxiliary services, such as frequency and voltage regulation, hence avoiding the need for additional upward and downward reserve. In this context, VRES will contribute to the smooth operation of the power system, supporting with their resources and not requiring external ones, allowing a higher penetration, while keeping proper security of supply.
In Argentina, PV and wind are equally competitive from the economic point of view: the expected LCOE of the two technologies is similar in the range 43.7-45.4 USD/MWh. In parallel, PV results slightly more competitive than wind (44.7 vs 49.6 USD/MWh) in Brazil, whereas in Uruguay the expected LCOE for PV and wind are around 58 and 60 USD/MWh and therefore VRES results a little bit less competitive than in the other neighbor countries.
In the simulated scenario:
· In Argentina, the installation of more than 10 GW of PV and nearly 14 GW wind power plants, plus about 2 GW of storage systems represents the optimal economic amount of VRES in 2030. The calculated amount of VRES plants is able to cover nearly 35% of the Argentinean load in the target year (82 TWh per year).
· In Brazil, the optimal installed capacity in 2030 corresponds to 20.5 GW of PV and 38.6 GW of wind. An amount of 3.4 GW of storage has been also introduced, even if, due to the particular generation mix in the Brazilian system, strongly dependent on hydropower plants, the need of electric storage might be reduced by a proper coordination, exploiting the storage capacity of the hydro plants to mitigate the variability of VRES plants. The calculated amount of VRES plants can cover about 18% of the Brazilian load (185 TWh per year).
· In Uruguay, the optimal installed capacity corresponds to 200 MW of PV and around 2 GW of wind in 2030. This capacity can cover more than 32% of the Uruguayan load in the target year (4.6 TWh per year). Nonetheless, there is no advantage when new VRES plants are added due to the small dimension of the country and the presence of an already significant amount of hydropower plants, wind farms and a new CCGT just entered in operation.
With optimized grid interconnections between Argentina, Brazil and Uruguay, there are several benefits:
· an increase of the overall security of supply;
· a reduction of VRES curtailments risk;
· a reduction of the overall generation cost;
· an additional amount of 4500 MW VRES capacity can be integrated (3 GW in Brazil, 1 GW in Argentina and 500 MW in Uruguay).