Due to its interconnected and predominantly hydroelectric matrix, the Brazilian electricity sector has a low emission factor. While other countries seek to increase the share of renewable sources and reduce fossil fuel generation, especially coal, Brazil achieved a renewable participation in electricity generation factor of 87.9% in 2022. However, due to emissions from other sectors, Brazil remains one of the largest emitters of greenhouse gases contributing to global warming.
This is one of the reasons that justifies the evaluation, as observed in other countries, of an emissions pricing mechanism, either through a specific tax burdening emitting activities or a permit market. In this context, as an important sector of the Brazilian economy, the electricity sector may also be subject to such pricing, and it is crucial to analyze its impacts on generation and transmission. Using data from the Decennial Energy Expansion Plan 2031 (PDE 2031) and the Investment Decision Model (MDI) , the study aims to assess the impacts on sector operation and expansion under three carbon price scenarios. Despite the significant difference in evaluated carbon prices, there was only a minor impact on system expansion, despite the total cost impact found in the modeling.
The results show a strong influence of GHG pricing on renewables energy expansion, such as wind and solar, which increased up to 100% in some years when compared to the PDE reference scenario. The policy also reduces up to 20% of gas-fired power plants expansion, but the impact reduces at the end of the analysis interval. The increase of expansion costs is almost a linear equation, with an 17% increase at 100 US$/tCO2eq scenario. The GHG emission reduction was analyzed considering each hydrological scenario which is the most important variable identified to brazilian power system. The mean of the hydrological scenarios estimates the yearly cost GHG reduction to the system operation, also the data presented shows that the GHG reduction rate is not constant in relation to the price, reducing the influence of the price in the emissions as the price increases. The assessment of quantitative results available from the expansion and operation of the Brazilian electric sector in the context of carbon pricing provides intriguing insights and discussions about the impacts of such mechanisms on the sector’s dynamics.
Complete tool for submission, evaluation and publication of proceedings for scientific events.
