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| Srl | Item |
| 1 |
ID:
125720
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| Publication |
2013.
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| Summary/Abstract |
The main purpose of this paper is to assess efficiency of the Brazilian electricity generation mix proposed in the 2020 Decennial Plan for Energy Expansion (DPEE 2020). It evaluates estimated costs, risks and CO2 emissions following the mean-variance portfolio theory. The efficiency frontier is estimated for three CO2 prices scenarios: no CO2 prices, low CO2 price and high CO2 price. The planned portfolio in Brazil presented in the DPEE 2020 is relatively close to the efficient frontier, however there is still room for risk mitigation by diversifying the energy portfolio. As there is currently no CO2 price in Brazil, the tendency is that diversification increases fossil fuel share in the energy mix, but the introduction of a CO2 price can be an option to promote renewables. This type of large general market framework can contribute to reduce market uncertainties by reducing the level of government's discretionary activism.
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| 2 |
ID:
171479
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| Summary/Abstract |
The competitiveness of electricity sources is traditionally estimated by levelized cost of electricity (LCOE) compared to the average electricity price. However, the introduction of variable renewable energy sources (VREs) in power systems has evidenced that time, location and availability, are essential to set the marginal value of electricity sources. Overcoming the narrow view of costs for a broad value approach, the literature recognizes that the source comparison must consider the expected marginal value of each alternative, which evolves over time due to sources penetration and system development, changing static and dynamic integration costs. The paper presents the Brazilian experience as forerunner case study for the literature on systemic value, as the country has established a pioneering benefit-cost index (BCI) to compare different sources in centralized expansion auctions, which contracted 100 GW of installed capacity. The BCI analysis is based on hydro predominance, recognizing only static integration costs (backward-looking approach). Nevertheless, the Brazilian system is evolving towards higher short-term variability due to the loss of regularization of hydro reservoirs, limitations to hydropower expansion and VREs penetration. The expansion and operation of the power system are not sensitive to ongoing changes, neglecting dynamic integration costs, which must be incorporated in a forward-looking perspective.
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