To expand the renewable sources would not increase the cost or affect the competitiveness power sector in Brazil, says the study

A research launched this Friday (19) calculates for the first time the real costs and benefits of each energy generation source in the country

São Paulo, October 19th, 2018 – At the same week that Brazilian power sector was highlighted during the presidential race, Escolhas Institute launches the study What are the real costs and benefits of energy generation sources in Brazil?”

Released today (October 19), the research presents a new methodology that calculates the total cost of energy generation in Brazil throughout evaluation and valuation of attributes from five components for each generation source required in the expansion plan of 10-year Energy Plan (PDE) 2026.


The PDE 2026 required sources are natural gas thermoelectric; biomass plant; wind power station; hydroelectric plant; and solar photovoltaic plant.


The attributes assessed were: investment and operating costs; services provided by the source; besides the production of energy itself; infrastructure costs caused (or avoided) by the generator; subsidies and exemptions; environmental costs, such as greenhouse gases emissions.


“This is the first time the real costs and benefits of energy generation have been calculated in the country, which qualifies the debate on the feasibility of increasing the participation of new renewable (wind, solar and biomass) in our electric matrix and the way in which costs are allocated today among agents in the industry. We need to do this debate using the data and evidences, without demonize any source”, says Sergio Leitão, Escolhas Institute CEO.


Take a look at the main results:


  • Brazil, until 2026, can increase the share of renewable in its electric matrix without this entailing significant costs to the electric system operation, fulfilling the guidelines of the Ten-Year Energy Plan 2026. According to Empresa de Pesquisa Energética (EPE), nowadays more than 80% of the electricity used in the country comes from renewable sources, most from hydraulics (68%).


  • By 2035, the country can increase its share of wind, solar and biomass in its electric matrix by 68%, in relation to the PDE 2026 forecast, totalling 44% of the matrix. This change can happen without affecting the competitiveness and attractiveness of megawatt hours (MWh) of this sources for consumers.


  • The MWh of the new renewable is very competitive and attractive to the consumer, even in scenarios of their greater penetration in the system, which indicates that there is still enough space for these sources in the country’s energy matrix.


  • The ideal expansion plan for the system should necessarily select only the lowest cost option since not all MWh are the same economically. The research shows the real cost of each one of those to society and highlight that the best option is the complementarily between generation sources, which must operate together. Wind power energy, i.e., is clean and renewable, but its production is variable because you cannot operate when there is no wind. The thermoelectric issue greenhouse effect gas, but can be triggered at any time. In other words, not a single source has all the necessary features for a great operation. That is how they complement one another.


  • The new renewable sources are the ones presenting the lowest investment and operation costs when compared to the others.


  • Among the renewable, biomass is the one presenting the lowest infrastructure cost.


  • When evaluating the services provided by the source besides the production of energy itself, such as modulation (capacity to meet demand throughout the year) and toughness (capacity to produce energy above what was planned), the thermoelectric power plant is the source that performs better. Hydroelectric has seasonality issues and wind and solar power with variability in energy production. However, thermoelectric is also the source with the biggest environmental cost for society when related to greenhouse effect emissions.