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Efficient Power Generating Portfolio Inbrazil: Conciliating Cost, Emissions And Risk

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  • EDMAR LUIZ FAGUNDES DE ALMEIDA
  • LUCIANO LOSEKANN
  • GUSTAVO MARREIRO
  • FRANCISCO JAVIER RAMOS-REAL

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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  • Edmar Luiz Fagundes De Almeida & Luciano Losekann & Gustavo Marreiro & Francisco Javier Ramos-Real, 2014. "Efficient Power Generating Portfolio Inbrazil: Conciliating Cost, Emissions And Risk," Anais do XL Encontro Nacional de Economia [Proceedings of the 40th Brazilian Economics Meeting] 134, ANPEC - Associação Nacional dos Centros de Pós-Graduação em Economia [Brazilian Association of Graduate Programs in Economics].
    • Handle: RePEc:anp:en2012:134
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    4. 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.
    5. 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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    10. Costa, Oswaldo L.V. & de Oliveira Ribeiro, Celma & Rego, Erik Eduardo & Stern, Julio Michael & Parente, Virginia & Kileber, Solange, 2017. "Robust portfolio optimization for electricity planning: An application based on the Brazilian electricity mix," Energy Economics, Elsevier, vol. 64(C), pages 158-169.
    11. 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).
    12. 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.
    13. 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.
    14. Hellinton H. Takada & Celma O. Ribeiro & Oswaldo L. V. Costa & Julio M. Stern, 2020. "Gini and Entropy-Based Spread Indexes for Primary Energy Consumption Efficiency and CO 2 Emission," Energies, MDPI, vol. 13(18), pages 1-17, September.
    15. 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.
    16. Romeiro, Diogo Lisbona & Almeida, Edmar Luiz Fagundes de & Losekann, Luciano, 2020. "Systemic value of electricity sources – What we can learn from the Brazilian experience?," Energy Policy, Elsevier, vol. 138(C).
    17. Forouli, Aikaterini & Gkonis, Nikolaos & Nikas, Alexandros & Siskos, Eleftherios & Doukas, Haris & Tourkolias, Christos, 2019. "Energy efficiency promotion in Greece in light of risk: Evaluating policies as portfolio assets," Energy, Elsevier, vol. 170(C), pages 818-831.

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