The study assessed the optimal generation sizing to reach 60%, 80% and 95% renewables penetration by 2040. Two different climate years (2015 and 2016) have been assessed in a dispatch model, optimising the OPEX of a system with a fixed installed base combined with an economic model. The OPEX has been modelled and combined in an economic model with CAPEX calculations for several installed bases to find the optimal LCOE of the new assets and the entire Madeira energy system.
The study has found that average generation costs can be reduced by adding pumped hydro storage with the Ribeira da Janela Reversible Hydroelectric Power Station (CHR-RJ) combined with new solar PV and onshore wind. Dimensioning for an 80% renewable system shows the least costs per MWh generated for the entire Madeira system. The costs for additional investments for an 80% renewable system compared to a 60% renewable system are lower than the savings on fuel costs. The 95% renewable system struggles to effectively supply residual load, especially capturing renewable oversupply. The extra investments in CHR-RJ storage volume, primary renewable generation, and high curtailment increase the average generation costs per MWh.
Renewables penetration above 95% is considered infeasible within the fixed demand profile, fixed generation profile of renewables (including existing hydro) and with the given expansion options of pumped hydro storage, solar PV, and wind.