Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil
Autor(a) principal: | |
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Data de Publicação: | 2021 |
Outros Autores: | , , |
Tipo de documento: | Artigo |
Idioma: | eng |
Título da fonte: | Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
Texto Completo: | http://hdl.handle.net/1822/74024 |
Resumo: | The electricity market in Brazil is basically organized under two parts: the regulated market, where energy is traded through auctions, and the free market, where market participants freely negotiate the price and quantity of electricity. Although revenues obtained in the regulated market tend to be lower than in the free market, the auctions’ results show that investors still value the lesser degree of uncertainty associated with the regulated market. However, a growing interest in the free market by investors is recognized since the price of electricity tends to be higher. Therefore, this study investigates four free market price scenarios to assess the expected return for investors, using the traditional discounted cash flow approach complemented with Monte Carlo simulation to address market uncertainty. The study breaks new ground by capturing the weekly price fluctuations and including the price elasticity of demand of the free market. The results seem to indicate that the disclosure of the ceiling and floor price limits for the spot price can signal important information about the agents’ price expectation in the free market and can be used for investment project evaluation. |
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Economic evaluation of wind power projects in a mix of free and regulated market environments in BrazilRenewable energyWind energyProject evaluationBrazilian electrical systemScience & TechnologyThe electricity market in Brazil is basically organized under two parts: the regulated market, where energy is traded through auctions, and the free market, where market participants freely negotiate the price and quantity of electricity. Although revenues obtained in the regulated market tend to be lower than in the free market, the auctions’ results show that investors still value the lesser degree of uncertainty associated with the regulated market. However, a growing interest in the free market by investors is recognized since the price of electricity tends to be higher. Therefore, this study investigates four free market price scenarios to assess the expected return for investors, using the traditional discounted cash flow approach complemented with Monte Carlo simulation to address market uncertainty. The study breaks new ground by capturing the weekly price fluctuations and including the price elasticity of demand of the free market. The results seem to indicate that the disclosure of the ceiling and floor price limits for the spot price can signal important information about the agents’ price expectation in the free market and can be used for investment project evaluation.Multidisciplinary Digital Publishing Institute (MDPI)Universidade do MinhoDelapedra-Silva, Vanderson AparecidoFerreira, Paula VarandasCunha, JorgeKimura, Herbert2021-06-052021-06-05T00:00:00Zinfo:eu-repo/semantics/publishedVersioninfo:eu-repo/semantics/articleapplication/pdfhttp://hdl.handle.net/1822/74024engDelapedra-Silva, V.A.; Ferreira, P.; Cunha, J.; Kimura, H. Economic Evaluation of Wind Power Projects in a Mix of Free and Regulated Market Environments in Brazil. Energies 2021, 14, 3325. https://doi.org/10.3390/en141133251996-107310.3390/en14113325https://www.mdpi.com/1996-1073/14/11/3325info:eu-repo/semantics/openAccessreponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos)instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãoinstacron:RCAAP2023-07-21T12:21:18Zoai:repositorium.sdum.uminho.pt:1822/74024Portal AgregadorONGhttps://www.rcaap.pt/oai/openaireopendoar:71602024-03-19T19:14:32.091368Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informaçãofalse |
dc.title.none.fl_str_mv |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil |
title |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil |
spellingShingle |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil Delapedra-Silva, Vanderson Aparecido Renewable energy Wind energy Project evaluation Brazilian electrical system Science & Technology |
title_short |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil |
title_full |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil |
title_fullStr |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil |
title_full_unstemmed |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil |
title_sort |
Economic evaluation of wind power projects in a mix of free and regulated market environments in Brazil |
author |
Delapedra-Silva, Vanderson Aparecido |
author_facet |
Delapedra-Silva, Vanderson Aparecido Ferreira, Paula Varandas Cunha, Jorge Kimura, Herbert |
author_role |
author |
author2 |
Ferreira, Paula Varandas Cunha, Jorge Kimura, Herbert |
author2_role |
author author author |
dc.contributor.none.fl_str_mv |
Universidade do Minho |
dc.contributor.author.fl_str_mv |
Delapedra-Silva, Vanderson Aparecido Ferreira, Paula Varandas Cunha, Jorge Kimura, Herbert |
dc.subject.por.fl_str_mv |
Renewable energy Wind energy Project evaluation Brazilian electrical system Science & Technology |
topic |
Renewable energy Wind energy Project evaluation Brazilian electrical system Science & Technology |
description |
The electricity market in Brazil is basically organized under two parts: the regulated market, where energy is traded through auctions, and the free market, where market participants freely negotiate the price and quantity of electricity. Although revenues obtained in the regulated market tend to be lower than in the free market, the auctions’ results show that investors still value the lesser degree of uncertainty associated with the regulated market. However, a growing interest in the free market by investors is recognized since the price of electricity tends to be higher. Therefore, this study investigates four free market price scenarios to assess the expected return for investors, using the traditional discounted cash flow approach complemented with Monte Carlo simulation to address market uncertainty. The study breaks new ground by capturing the weekly price fluctuations and including the price elasticity of demand of the free market. The results seem to indicate that the disclosure of the ceiling and floor price limits for the spot price can signal important information about the agents’ price expectation in the free market and can be used for investment project evaluation. |
publishDate |
2021 |
dc.date.none.fl_str_mv |
2021-06-05 2021-06-05T00:00:00Z |
dc.type.status.fl_str_mv |
info:eu-repo/semantics/publishedVersion |
dc.type.driver.fl_str_mv |
info:eu-repo/semantics/article |
format |
article |
status_str |
publishedVersion |
dc.identifier.uri.fl_str_mv |
http://hdl.handle.net/1822/74024 |
url |
http://hdl.handle.net/1822/74024 |
dc.language.iso.fl_str_mv |
eng |
language |
eng |
dc.relation.none.fl_str_mv |
Delapedra-Silva, V.A.; Ferreira, P.; Cunha, J.; Kimura, H. Economic Evaluation of Wind Power Projects in a Mix of Free and Regulated Market Environments in Brazil. Energies 2021, 14, 3325. https://doi.org/10.3390/en14113325 1996-1073 10.3390/en14113325 https://www.mdpi.com/1996-1073/14/11/3325 |
dc.rights.driver.fl_str_mv |
info:eu-repo/semantics/openAccess |
eu_rights_str_mv |
openAccess |
dc.format.none.fl_str_mv |
application/pdf |
dc.publisher.none.fl_str_mv |
Multidisciplinary Digital Publishing Institute (MDPI) |
publisher.none.fl_str_mv |
Multidisciplinary Digital Publishing Institute (MDPI) |
dc.source.none.fl_str_mv |
reponame:Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) instname:Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação instacron:RCAAP |
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Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
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RCAAP |
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RCAAP |
reponame_str |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
collection |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) |
repository.name.fl_str_mv |
Repositório Científico de Acesso Aberto de Portugal (Repositórios Cientìficos) - Agência para a Sociedade do Conhecimento (UMIC) - FCT - Sociedade da Informação |
repository.mail.fl_str_mv |
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1799132588017713152 |