Impact of the New Electricity Remuneration Scheme on the Waste-to-Energy Recovery Activity in Portugal

Mário Silva, João Lagarto, Jorge Sousa, Feliz Mil-Homens, Carla Viveiros and Filipe Barata ()
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Mário Silva: Electrical Engineering Energy and Automation Department (DEEEA), Instituto Superior de Engenharia de Lisboa (ISEL), Instituto Politécnico de Lisboa (IPL), Rua Conselheiro Emídio Navarro, 1, 1959-007 Lisboa, Portugal
João Lagarto: Electrical Engineering Energy and Automation Department (DEEEA), Instituto Superior de Engenharia de Lisboa (ISEL), Instituto Politécnico de Lisboa (IPL), Rua Conselheiro Emídio Navarro, 1, 1959-007 Lisboa, Portugal
Jorge Sousa: Electrical Engineering Energy and Automation Department (DEEEA), Instituto Superior de Engenharia de Lisboa (ISEL), Instituto Politécnico de Lisboa (IPL), Rua Conselheiro Emídio Navarro, 1, 1959-007 Lisboa, Portugal
Feliz Mil-Homens: Electrical Engineering Energy and Automation Department (DEEEA), Instituto Superior de Engenharia de Lisboa (ISEL), Instituto Politécnico de Lisboa (IPL), Rua Conselheiro Emídio Navarro, 1, 1959-007 Lisboa, Portugal
Carla Viveiros: Electrical Engineering Energy and Automation Department (DEEEA), Instituto Superior de Engenharia de Lisboa (ISEL), Instituto Politécnico de Lisboa (IPL), Rua Conselheiro Emídio Navarro, 1, 1959-007 Lisboa, Portugal
Filipe Barata: Electrical Engineering Energy and Automation Department (DEEEA), Instituto Superior de Engenharia de Lisboa (ISEL), Instituto Politécnico de Lisboa (IPL), Rua Conselheiro Emídio Navarro, 1, 1959-007 Lisboa, Portugal

Energies, 2023, vol. 16, issue 18, 1-18

Abstract: The remuneration scheme for the electricity produced by Waste-to-Energy (WtE) recovery plants has changed recently in Portugal according to 2020 legislation. The new model, linking the electricity remuneration from WtE plants to the spot electricity prices, is expected to bring greater uncertainty in the waste activity, which is a novelty for the sector. In Portugal, Valorsul is the municipal waste treatment entity responsible for the recovery and treatment of municipal solid waste (MSW) produced in 19 municipalities in the Lisbon area. This paper highlights the impact of the new Portuguese electricity remuneration scheme for electricity from waste on Valorsul’s WtE plant. For this purpose, the new remuneration scheme is modeled and simulated based on electricity spot market price scenarios, which are compared with the base case scenario of the former remuneration scheme. Considering different electricity prices for the electricity produced by the WtE plant, the present study anticipates the consequences of the gate-fee of such regulatory changes. Results show that any price changes in the electricity remuneration scheme are offset by equivalent changes in the waste gate-fee. Consequently, the change in the remuneration of the electricity from the WtE plant is, in fact, neutral for the Valorsul accounts and lower revenues from the electricity generation activity of the WtE will negatively impact the gate-fee prices paid by the waste users.

Keywords: waste-to-energy recovery plant; remuneration scheme; gate-fee; waste and energy regulation; electricity market (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2023
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