Thermopower generation investment in Brazil—economic conditions

One of the main questions in electricity market deregulation is the aptitude of private capital for investments in power generation. This is especially important in Brazil, whose load has a strong growth trend (≈6% per year). Thermopower is an attractive alternative for expanding generation, as it is complementary in many aspects to hydropower, which supplies most Brazilʹs power at a very low price most of the time, but makes the system vulnerable to seasonal water variations. This paper studies the competitiveness of thermopower generation in Brazil under current regulations; assesses under the real options theory approach the conditions for investments in thermopower generation, and finally presents and discusses a hydropower generation schedule model.