Study on Determinant Factors of Economic Feasibility in Generating Wind Power in Northeast Brazil

Abstract

Wind energy is an additional source of renewable energy, those energies that do not harm the environment and fits in the group of alternative energies. Brazil has one of the cleanest energy matrices in the world, mainly a matrix based on hydro power. The country is considered the most promising market for wind energy in Latin America, with an estimated wind potential of 300 GW. The research aimed to identify and define variables that most strongly impact the economic viability of operating equipment and wind farms in Northeast Brazil, identifying the key performance factors for the economic analysis performed, such as technologies, equipment size and productive efficiency. The study focused on wind turbines with installed capacity above 1MW, capable of generating power at more competitive costs. Deterministic models were used in the analysis of investment projects, which included the elaboration of the Discounted Cash Flow (DCF) and the adoption of indicators such as Net Present Value, Internal Rate of Return and Pay-back, complemented with a sensitivity analysis of the main variables impacting the economic viability of wind investments in Northeast Brazil. The cash flow analysis allowed the calculation of the break-even for the different variables analyzed, equipment load factor, wind turbine investment and effective hours available for wind generation, among others. Although for the situation analyzed, wind generation projects in the Northeast of Brazil are economically viable, the profitability of these projects for the assumptions of the calculation assumed is still low, considering they generate a 15 year Pay-back and a return rate of 9.22% as opposed to an assumed financing cost of 7,3% p.a. Proceedings of the International Conference on Industrial Engineering and Operations Management Sao Paulo, Brazil, April 5 8, 2021 © IEOM Society International 466