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Efficient power generating portfolio in Brazil: Conciliating cost, emissions and risk

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  • Losekann, Luciano
  • Marrero, Gustavo A.
  • Ramos-Real, Francisco J.
  • de Almeida, Edmar Luiz Fagundes

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.

Suggested Citation

  • Losekann, Luciano & Marrero, Gustavo A. & Ramos-Real, Francisco J. & de Almeida, Edmar Luiz Fagundes, 2013. "Efficient power generating portfolio in Brazil: Conciliating cost, emissions and risk," Energy Policy, Elsevier, vol. 62(C), pages 301-314.
    • Handle: RePEc:eee:enepol:v:62:y:2013:i:c:p:301-314
    DOI: 10.1016/j.enpol.2013.07.049
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    3. David Juárez-Luna, 2021. "Power generation portfolios: A parametric formulation of the efficient frontier," Remef - Revista Mexicana de Economía y Finanzas Nueva Época REMEF (The Mexican Journal of Economics and Finance), Instituto Mexicano de Ejecutivos de Finanzas, IMEF, vol. 16(1), pages 1-29, Enero - M.
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    12. de Moraes Dutenkefer, Raphael & de Oliveira Ribeiro, Celma & Morgado Mutran, Victoria & Eduardo Rego, Erik, 2018. "The insertion of biogas in the sugarcane mill product portfolio: A study using the robust optimization approach," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 729-740.
    13. Feil, Alex Sandro & Antunes, Carlos Henggeler & da Silva, Patrícia Pereira & de Castro, Nivalde, 2024. "The critical drivers of the Brazilian electricity sector's transition through 2050: A Delphi study," Utilities Policy, Elsevier, vol. 87(C).
    14. Riesz, Jenny & Vithayasrichareon, Peerapat & MacGill, Iain, 2015. "Assessing “gas transition” pathways to low carbon electricity – An Australian case study," Applied Energy, Elsevier, vol. 154(C), pages 794-804.
    15. Vithayasrichareon, Peerapat & Riesz, Jenny & MacGill, Iain F., 2015. "Using renewables to hedge against future electricity industry uncertainties—An Australian case study," Energy Policy, Elsevier, vol. 76(C), pages 43-56.
    16. Pérez Odeh, Rodrigo & Watts, David & Flores, Yarela, 2018. "Planning in a changing environment: Applications of portfolio optimisation to deal with risk in the electricity sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3808-3823.
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