Integration of solar and wind power generation in the BRICS countries: An analysis of investment parameters and challenges

Abstract

Subject. This article explores the technological and economic barriers to the integration of solar and wind-driven electric power stations into the electric power system, and it analyzes the options for choosing the optimal investment project when comparing parameters in the format of the BRICS countries. Objectives. The article aims to define and systematize the parameters of investment efficiency of solar and wind power generation construction projects in the BRICS countries. Methods. To assess investment indicators, we used well-established measures in international practice: Net Present Value (NPV), Internal Rate of Return (IRR), Payback Period (PbP), and Aggregate Capital Expenditures (CAPEX). Results. The article identifies and systematizes the fundamental barriers in the implementation of projects in the field of renewable energy sources (RES), among which there are political and institutional, informational, market, and cognitive ones. The article also considers options for overcoming these barriers through improving the institutional environment and State support. Conclusions and Relevance. Means to achieve economic efficiency and reliability of energy supply of the electric power system are getting transformed as the share of renewable energy sources increases and the transition to a new stage of the energy market's development gets actualized. The materials of the article can be used as a tool to determine the level of investment efficiency of renewable energy projects, taking into account the macroeconomic context.