In Brazil’s long-term energy planning, the dispatch of thermal plants usually varies along a year. Such variation is essentially due to the predominance of the hydraulic mix in the system electric energy supply. For this reason, without preventive measures, a highly irregular cash flow occurs for natural gas (NG) providers, who supply gas for electric energy generators. In order to achieve more regularity for NG providers’ cash flows, supply contracts of this resource for electric energy generation usually contain special clauses, called take-or-pay – ToP. Such clauses force electric generators to pay each month a minimal financial amount, even if the effective use of NG in this period is smaller than the paid amount of resource. Without representing explicitly ToP clauses, the Brazilian model is currently forced to dispatch NG-fueled thermal plants in a compulsory minimal amount, corresponding to the financial lower bound required by the contract. The explicit consideration of ToP clauses in hydrothermal dispatch models yields a better application of NG and a smaller expected operation cost for the whole power system, because it introduces some flexibility in the decision of NG purchase and its use. As shown by our numerical experience, this flexibility may result in reduced water spillages in periods with favorable hydrology. The methodology presented in this work takes into account the characteristics of the ToP contracts in the Brazilian long-term energy planning and differs from other models found in the literature by the fact of aiming at a smaller expected operation cost of the whole system – National Interconnected System, because it treats the contracts from the operator point of view. This work presents the process of inclusion of the NG contracts in Brazil’s long-term energy planning model NEWAVE, developed by the Electric Energy Research Centre (CEPEL), with its mathematical formulation, impacts, and results obtained from real case studies with the NIS.
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