A Complementary Economic Incentive for Profitable Renewable Energy Production

Abstract

Renewable generation has gained relevance worldwide in the production of electricity. Mechanisms such as feed-in tariffs have made investment viable in this type of technology. However, in the medium term these technologies will be competitive, and these promotion mechanisms will gradually be phase out. On the other hand, reducing the intermittency of these plants requires economic incentives. This paper proposes a complementary economic incentive for Renewable Energy Resources (RER) production, aimed at increasing their production in the electricity market taking into account their probability of meeting the dispatched energy requirements. This methodology was tested for solar and wind plants that actually operate in the electric power system of Peru, considering three different demand scenarios. The proposed economic incentive constitutes an alternative to promote the investments to increase the reliability in the production of renewable energy sources especially, for the technologies who have reached competitive market conditions.