The stochastic effects on the Brazilian Electrical Sector

Pedro Guilherme Costa Ferreira, Fernando Luiz Cyrino Oliveira and Reinaldo Castro Souza

Energy Economics, 2015, vol. 49, issue C, 328-335

Abstract: The size and characteristics of the Brazilian Electrical Sector (BES) are unique. The system includes a large-scale hydrothermal power system with many hydroelectric plants and multiple owners. Due to the historical harnessing of natural resources, the National Interconnected System (NIS) was developed outside of the economic scale of the BES. The central components of the NIS enable energy generated in any part of Brazil to be consumed in distant regions, considering certain technical configurations. This interconnection results in a large-scale complex system and is controlled by robust computational models, used to support the planning and operation of the NIS. This study presents a different vision of the SEB, demonstrating the intrinsic relationship between hydrological stochasticity and the activities executed by the system, which is an important sector of the infrastructure in Brazil. The simulation of energy scenarios is crucial to the optimal manner to operate the sector and to supporting decisions about whether expansion is necessary, thus, avoiding unnecessary costs and/or losses. These scenarios are an imposing factor in the determination of the spot cost of electrical energy, given that the simulated quantities of water in the reservoirs are one of the determinants for the short-term energy price.

Keywords: Brazilian Electrical Sector; Expansion planning; Operational planning; Spot price (search for similar items in EconPapers)
JEL-codes: C59 O13 O54 Q25 Q28 Q47 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (18)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:eneeco:v:49:y:2015:i:c:p:328-335

DOI: 10.1016/j.eneco.2015.03.004

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