Implementing Streamflow Linkages in MacroEnergy: A Test Case of the Brazilian Power Sector.

Abstract

As energy systems across the world push towards decarbonization, hydropower will play an increasingly prominent role as a flexibility-provider to offset the variability of renewable energy resources. Despite its importance, most capacity expansion models overly simplify the formulation of hydropower’s network, operational, and environmental constraints, aggregating individual units into large energy-equivalent resources. This aggregate approach can misrepresent the true dynamics of hydropower, obscuring its value and flexibility in macro energy systems. Recognizing the growing need for multi-sector decarbonization analysis, this study extends the base formulation of MacroEnergy.jl, implementing streamflow linkages, and disaggregating operational limits to the reservoir-level. A test case of the Brazilian power sector is proposed to understand the impact of the proposed model on system costs, hydropower dispatch, and broader capacity expansion decisions. An Aggregated and a Streamflow model are thus presented and tested on two scenarios, using 2019 as the reference weather-year: 1) one year of operations without expansion or retirement and 2) a 10-year capacity expansion period with a 15% increase in system demand. The study finds that disaggregating hydropower into cascading reservoirs and run-of-river units yields higher costs, with more generation during the wet season but restricted output during the dry spell relative to the aggregated representation. The second scenario further finds that disaggregated hydropower leads to prioritizing firm capacity, while aggregated representations over-invest in renewable energy.