The Brazilian electricity market : small hydropower strategic planning

In 2013, Brazil had the 9th largest electricity generation in the planet, while having the 3rd largest hydroelectric generation (BP Global, 2015). Having more than 70% of its installed capacity coming from hydropower puts Brazil in a great position in terms of reduced environmental impact on electricity generation. However, it also creates a large supply dependency on weather, water flows and reservoirs. In the last 2-3 years, the country has been undergoing an intense drought - the largest since the early 1950's. Such drought caused hydropower plants to deliver significantly less energy than expected, which led to a sudden and lasting surge on the price of the Megawatt-hour. With a unified electricity system with a single national operator, Brazil has been able to maintain the supply in sufficient levels. However, as it would be expected in a free market, the drought has drawn attention of a large number of investors. This thesis analyzes the current electricity market situation, showing from basic concepts to a landscape overview. Furthermore, it also explores Small Hydropower investments, including the different portfolio choices that investors may make and have recently made. Such analyses provide a good understanding of the impact of different variables and levers on the present value of revenues generated by such plants, as well as on the risk profile of the investment.

Department dc:contributor.department

Sloan School of Management.

Grantor dc:publisher

Massachusetts Institute of Technology

Year dc:date.issued

2015

Author dc:creator

• Rodriguez Gonzalez Cortes, Thomaz

Advisor dc:contributor.advisor

• Robert Pindyck.

• Sloan School of Management.

Statement dc:rights

• M.I.T. theses are protected by copyright. They may be viewed from this source for any purpose, but reproduction or distribution in any format is prohibited without written permission. See provided URL for inquiries about permission.

Licence dc:rights.uri

• http://dspace.mit.edu/handle/1721.1/7582

Language dc:language.iso

eng

Handle dc:identifier.uri

http://hdl.handle.net/1721.1/99043

OAI identifier oai:identifier

oai:dspace.mit.edu:1721.1/99043