Microgrid storage project financing options in Brazil 2030

How can microgrids reduce investment costs in Brazil?

In Brazil, the development of financial mechanisms for DG, the Green Fund and some sectorial funds can leverage the creation of mechanisms that could reduce the high investment costs for microgrids. Market challenges include the participation of microgrids in the market so they are able to sell their products and services.

Why is microgrid development a problem in Brazil?

The lack of financial models, the long way to go before renewable DG and storage are viable, and the lack of national industry in related equipment manufacturing, create obstacles to microgrid development, and make their investment even more risky and unattractive in Brazil.

Does Brazil have a microgrid financing model?

In Brazil, there is still no discussion on microgrid financing models; however, the financing support that some federal banks have recently implemented for DG, shown in Table 1, could be adapted for microgrids in the future.

What is microgrid financing?

Microgrid financing often covers generation, storage, energy efficiency retrofits, the distribution system, and energy control and management systems. It is difficult to assign value to a microgrid, monetizing its potential value streams, due to a set of economic and regulatory issues.

How to promote DG and microgrids in Brazil?

Besides, issues such as tariff structure and distribution planning could promote DG and microgrids in Brazil. The microgrid could be subject to a flat buying and selling electricity rate or to a varying rate with time (Time-of-Use - ToU) for buying and selling electricity. In order to stimulate microgrids, the ToU tariff could be important.

Should the UFRJ invest in a microgrid?

The UFRJ would directly buy its energy from generators in high voltage, and would lower and distribute it, having a positive impact on its energy bills. However, it requires high investments (UFRJ, 2017). Major issues of the microgrid industry are its high investment costs and the lack of capitalization (EEM, 2014).