UNIVERSIDADE FEDERAL DA BAHIA – UFBA ESCOLA POLITÉCNICA PROGRAMA DE PÓS-GRADUAÇÃO EM ENGENHARIA INDUSTRIAL – PEI Pieter de Jong. Forecasting, integration, and storage of renewable energy generation in the Northeast of Brazil SALVADOR – 2017 i Pieter de Jong. Forecasting, integration, and storage of renewable energy generation in the Northeast of Brazil Thesis submitted to the Postgraduate Program in Industrial Engineering (PEI), Polytechnic School, Federal University of Bahia, as a requirement to obtain a Doctorate of Industrial Engineering. Supervisors: Prof. Dr. Ednildo Andrade Torres Prof. Dr. Asher Kiperstok. Co-supervisor: Dr. Roger Dargaville. Tese apresentada ao Programa de Pós-Graduação em Engenharia Industrial (PEI), Escola Politécnica, Universidade Federal da Bahia, como um requisito para obtenção do grau de Doutor em Engenharia Industrial. Orientadores: Prof. Dr. Ednildo Andrade Torres Prof. Dr. Asher Kiperstok. Coorientador: Dr. Roger Dargaville. SALVADOR – 2017 ii de Jong, Pieter Forecasting, integration, and storage of renewable energy generation in the Northeast of Brazil / Pieter de Jong. – Salvador, 2017. 190 f. : il. color. Orientadores: Prof. Dr. Ednildo Andrade Torres, Prof. Dr. Asher Kiperstok. Coorientador: Dr. Roger Dargaville. Tese (Doutorado - Programa de Pós-Graduação em Engenharia Industrial) – Universidade Federal da Bahia, Escola Politécnica, 2017. 1. Renewable energy. 2. Wind power. 3. Solar power. 4. Hydroelectricity. 5. Integration. 6. Forecasting. I. Torres, Ednildo Andrade. II. Kiperstok, Asher. III. Dargaville, Roger. IV. Título. iii iv Acknowledgments: I wish to thank the following persons and institutions: My supervisors Prof. Dr. Ednildo Andrade Torres and Prof. Dr. Asher Kiperstok for their guidance along the project. My co-supervisor Dr. Roger Dargaville for providing valuable feedback. Dr. Jeremy Silver and Dr. Steven Utembe for their assistance. Tatiane Woytysiak, Robinson Carvalho, Prof. Dr. Cristiano Fontes, Prof. Dr. Marcio Luis Ferreira Nascimento, Prof. Dr. Emerson Andrade Sales and all the other staff and professors at the Programa de Pós-Graduação em Engenharia Industrial – PEI and at the Laboratório de Energia e Gás – LEN for their support. Thanks to the Coordination for the Improvement of Higher Education Personnel – CAPES and the Foundation for Research Support of the State of Bahia – FAPESB for their financial support for this research. COELBA - Grupo Neoenergia, for providing data. ONS – Brazilian National Electricity System Operator, INPE – National Institute of Space Research and CPTEC – Centre for Weather Forecasting and Climate Studies for providing data. Lucy Oliveira de Andrade, for her assistance with correcting Portuguese text and her sound advice. My colleagues, Eduardo Teixeira da Silva, Antonio Sanchez, Maria Cândida, Csaba Sulyok, Diego Medeiros, José Alexandre Santos, Raimundo Andrade, Alessandra Bitencourt and Airton Carneiro. My parents, Eva and Henri de Jong. v "When the last tree is cut, the last fish is caught, and the last river is polluted; when to breathe the air is sickening, you will realize, too late, that wealth is not in bank accounts and that you can’t eat money." Native American saying attributed to Alanis Obomsawin. vi DE JONG, Pieter. Forecasting, integration, and storage of renewable energy generation in the Northeast of Brazil. 190 pp. 2017. Doctoral Thesis. Postgraduate Program in Industrial Engineering (PEI), Polytechnic School - Federal University of Bahia, Salvador, 2017. ABSTRACT As a result of global climate change, during the coming decades less rainfall and higher temperatures are projected for the Brazilian Northeast (NE). Consequently these regional climatic changes could severely impact hydroelectric generation in the NE as well as influence solar and wind power potential. The ongoing drought in the Brazilian NE region has caused hydroelectric generation to decline substantially during the last 5 years and in 2016 hydroelectricity only supplied 25% of the NE’s total demand. In contrast, wind power supplied 30% of demand and is expected to generate 55-60% of the NE’s electricity supply by 2020. Therefore, this paper is focused on both short term forecasting and long-term projections of renewable energy generation and resource availability. It also explores the economic, environmental and technical feasibility of renewable energy integration in the NE region of Brazil. First, the long-term impacts of climate change on the NE region’s hydroelectric and wind energy production are analysed. Particular attention is paid to the long-term projections of annual rainfall and streamflow in the São Francisco basin which could decline by approximately 47% and 80%, respectively, by 2050. On the other hand, wind energy potential is projected to increase substantially during the same period. This thesis also estimates the economic, social, and environmental viability of renewable and non- renewable generation technologies in Brazil. The Levelised Cost of Electricity (LCOE) including externalities is calculated for several different case study power plants, the majority of which are located in the Brazilian NE. It was found that wind power becomes the cheapest generation technology in the NE region, once all externality and transmission line costs are taken into consideration. The LCOE for the entire Northeast’s generation matrix is calculated for various configurations, including scenarios in which hydroelectric generation is restricted due to drought conditions. It was concluded that a generation mix in which wind power replaces all fossil fuel generation by 2020, could feasibly reduce the overall LCOE in the region by approximately 46% and substantially decrease CO2eq emissions. Two different methods are used to examine the limits of integrating high penetrations of variable renewable generation technologies into a power system with a large proportion of hydroelectric capacity. In the first method existing wind generation data from 16 wind farms is extrapolated in time and space, while the second method uses a numerical weather prediction model to simulate future wind energy generation in the NE region. Considering the minimum generation requirements of the São Francisco’s hydroelectric dams, the maximum wind energy penetration in the NE region is estimated to be approximately 50% before significant amounts of energy would need to be curtailed or exported to other Brazilian regions. Finally, this thesis reviews additional literature on energy storage and the impact of large scale variable renewable energy integration on grid stability and power quality. It was found that there are several existing technologies such as power factor and voltage regulation devices that can resolve these issues. Keywords: Renewable Energy; Wind Power; Solar Power; Hydroelectricity; Integration; Forecasting. vii DE JONG, Pieter. Previsão, integração e armazenamento de geração de energia renovável no Nordeste do Brasil. 190 f. il. 2017. Tese (Doutorado). Programa de Pós- Graduação em Engenharia Industrial (PEI), Escola Politécnica - Universidade Federal da Bahia, Salvador, 2017. RESUMO Como consequência da mudança climática global, nas próximas décadas menos precipitação e temperaturas mais altas são projetados para Nordeste (NE) do Brasil. Consequentemente, essas mudanças climáticas regionais podem afetar severamente a geração hidrelétrica no NE, bem como influenciar o potencial de energia solar e eólica. A seca atual nessa região do Brasil fez com que a geração hidrelétrica caísse substancialmente durante os últimos 5 anos e em 2016, as usinas hidrelétricas apenas forneceram 25% da demanda total do NE. Em contraste, a energia eólica forneceu 30% da demanda e deverá gerar 55-60% do fornecimento de energia elétrica do NE até 2020. Portanto, este trabalho está focado tanto na previsão a curto quanto projeções a longo prazo da geração de energia renovável e disponibilidade de recursos. Ele também explora a viabilidade econômica, ambiental e técnica da integração de energias renováveis na região NE. Primeiramente, os impactos de longo prazo das mudanças climáticas na produção hidrelétrica e eólica da região NE são analisados. Especial atenção é dada às projeções de longo prazo de precipitação anual e fluxo na bacia do São Francisco, que podem diminuir em aproximadamente 47% e 80%, respectivamente, até 2050. Por outro lado, prevê-se que o potencial da energia eólica aumente substancialmente durante o mesmo período. Esta tese também estima a viabilidade econômica, social e ambiental das tecnologias de geração renováveis e não-renováveis no Brasil. O custo nivelado de energia elétrica (LCOE), incluindo externalidades, é calculado para diversas usinas de estudo de caso, a maioria localizada no NE. Verificou-se que, a energia eólica se torna a tecnologia de geração mais barata na região NE, uma vez que todos os custos de externalidades e de linhas de transmissão são levados em consideração. O LCOE para a matriz de geração do Nordeste é calculado para várias configurações, incluindo cenários em que a geração hidrelétrica é restrita devido às condições de seca. Concluiu-se que, uma mistura de geração em que a energia eólica substitui toda a geração de combustíveis fósseis até 2020, poderia reduzir o LCOE na região em aproximadamente 46% e diminuir substancialmente as emissões de CO2eq. Dois métodos diferentes são usados para examinar os limites da integração de altas penetrações de tecnologias de geração renovável variáveis em um sistema de energia com uma grande