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Assessment of Regulatory and Market Challenges in the Economic Feasibility of a Nanogrid: A Brazilian Case

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  • Fernando A. Assis

    (Electrical Engineering Department, IATI—Advanced Institute of Technology and Innovation, Recife 50751-310, Brazil
    Electrical Engineering Department, UFSJ—Federal University of São João del-Rei, São João del-Rei 36307-352, Brazil)

  • Francisco C. R. Coelho

    (Electrical Engineering Department, IATI—Advanced Institute of Technology and Innovation, Recife 50751-310, Brazil
    Electrical Engineering Department, UFSJ—Federal University of São João del-Rei, São João del-Rei 36307-352, Brazil)

  • José Filho C. Castro

    (Electrical Engineering Department, IATI—Advanced Institute of Technology and Innovation, Recife 50751-310, Brazil
    Electrical Engineering Department, UFPE—Federal University of Pernambuco, Recife 50670-901, Brazil)

  • Antonio R. Donadon

    (Electrical Engineering Department, IATI—Advanced Institute of Technology and Innovation, Recife 50751-310, Brazil)

  • Ronaldo A. Roncolatto

    (Electrical Engineering Department, IATI—Advanced Institute of Technology and Innovation, Recife 50751-310, Brazil)

  • Pedro A. C. Rosas

    (Electrical Engineering Department, IATI—Advanced Institute of Technology and Innovation, Recife 50751-310, Brazil
    Electrical Engineering Department, UFPE—Federal University of Pernambuco, Recife 50670-901, Brazil)

  • Vittoria E. M. S. Andrade

    (Electrical Engineering Department, IATI—Advanced Institute of Technology and Innovation, Recife 50751-310, Brazil
    Electrical Engineering Department, UFPE—Federal University of Pernambuco, Recife 50670-901, Brazil)

  • Rafael G. Bento

    (CPFL Energy, Campinas 13088-900, Brazil)

  • Luiz C. P. Silva

    (Electrical Engineering Department, UNICAMP—Campinas State University, Campinas 13083-970, Brazil)

  • João G. I. Cypriano

    (Electrical Engineering Department, UNICAMP—Campinas State University, Campinas 13083-970, Brazil)

  • Osvaldo R. Saavedra

    (Instituto de Energia Elétrica, UFMA—Federal Univerisity of Maranhão, Av. dos Portugueses s/n, Bacanga, São Luís 65080-040, Brazil)

Abstract

Microgrids have emerged as a popular solution for electric energy distribution due to their reliability, sustainability, and growing accessibility. However, their implementation can be challenging, particularly due to regulatory and market issues. Building smaller-scale microgrids, also known as nanogrids, can present additional challenges, such as high investment costs that need to be justified by local demands. To address these challenges, this work proposes an economic feasibility assessment model that is applied to a real nanogrid under construction in the Brazilian electrical system, with electric vehicle charging stations as its main load. The model, which takes into account uncertainties, evaluates the economic viability of constructing a nanogrid using economic indicators estimated by the Monte Carlo simulation method, with the system operation represented by the OpenDSS software. The model also considers aspects of energy transactions within the net-metering paradigm, with energy compensation between the nanogrid and the main distribution network, and investigates how incentives can impact the viability of these microgrids.

Suggested Citation

  • Fernando A. Assis & Francisco C. R. Coelho & José Filho C. Castro & Antonio R. Donadon & Ronaldo A. Roncolatto & Pedro A. C. Rosas & Vittoria E. M. S. Andrade & Rafael G. Bento & Luiz C. P. Silva & Jo, 2024. "Assessment of Regulatory and Market Challenges in the Economic Feasibility of a Nanogrid: A Brazilian Case," Energies, MDPI, vol. 17(2), pages 1-18, January.
    • Handle: RePEc:gam:jeners:v:17:y:2024:i:2:p:341-:d:1316070
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    References listed on IDEAS

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    1. Yu, Hang & Shang, Yitong & Niu, Songyan & Cheng, Chong & Shao, Ziyun & Jian, Linni, 2022. "Towards energy-efficient and cost-effective DC nanaogrid: A novel pseudo hierarchical architecture incorporating V2G technology for both autonomous coordination and regulated power dispatching," Applied Energy, Elsevier, vol. 313(C).
    2. Jinwoo Bae & Soojung Lee & Heetae Kim, 2021. "Comparative study on the economic feasibility of nanogrid and microgrid electrification: The case of Jeju Island, South Korea," Energy & Environment, , vol. 32(1), pages 168-188, February.
    3. Aree Wangsupphaphol & Surachai Chaitusaney & Mohamed Salem, 2023. "A Techno-Economic Assessment of a Second-Life Battery and Photovoltaics Hybrid Power Source for Sustainable Electric Vehicle Home Charging," Sustainability, MDPI, vol. 15(7), pages 1-19, March.
    4. Di Florio, Giuseppe & Macchi, Edoardo Gino & Mongibello, Luigi & Baratto, Maria Camilla & Basosi, Riccardo & Busi, Elena & Caliano, Martina & Cigolotti, Viviana & Testi, Matteo & Trini, Martina, 2021. "Comparative life cycle assessment of two different SOFC-based cogeneration systems with thermal energy storage integrated into a single-family house nanogrid," Applied Energy, Elsevier, vol. 285(C).
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