Perspectives under uncertainties and risk in wind farms investments based on Omega-LCOE approach: An analysis in São Paulo state, Brazil

Giancarlo Aquila, Wilson Toshiro Nakamura, Paulo Rotella Junior, Luiz Celio Souza Rocha and Edson de Oliveira Pamplona

Renewable and Sustainable Energy Reviews, 2021, vol. 141, issue C

Abstract: This present study proposes the stochastic approach Omega-LCOE to compare a Levelized Costa of Electricity (LCOE) between different locations. To validate the proposed approach, an investigation to compare the wind energy LCOE of 63 main cities in São Paulo state (Brazil) in relation to world LCOE average. Therefore, the Omega value estimated by a ratio of potential gains (costs reductions) and losses (costs inflations) in relation to a benchmarking (world LCOE average) is calculated for each city, based on 10,000 values of LCOE obtained by Simulation of Monte Carlo. Omega-LCOE results shows significant differences from results obtained by deterministic LCOE. Eight cities that presented LCOE below the world average from a deterministic approach, prove to be superior to the world average through the Omega-LCOE approach. Jundiaí, Franco da Rocha and Guarulhos present a deterministic LCOE higher than several cities, however when analyzing the uncertainties and risks these cities appear among those with the best LCOE performance in São Paulo state. In addition, it is observed that most cities in North and Northeast of São Paulo present LCOE performance better than world LCOE average, proving that these regions have the best wind potential in state. In turn, the South of São Paulo and the region called Vale do Paraíba present the worst results, being considered the highest cost places to install wind farms in São Paulo.

Keywords: Wind energy; Renewable investments; Levelized cost of electricity; Omega; Financial risk (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (2)

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DOI: 10.1016/j.rser.2021.110805

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