Risk-conscious approach to optimizing bioenergy investments in the Brazilian sugarcane industry

Author(s)

Mutran, Victoria M. ; Ribeiro, Celma O. ; Nascimento, Claudio O. A. ; Chachuat, Benoit ; Kiss, AA ; Zondervan, E ; Lakerveld, R ; Ozkan, L

• Document type: Journal article
• Source: 29TH EUROPEAN SYMPOSIUM ON COMPUTER AIDED PROCESS ENGINEERING, PT A; v. 46, p. 6-pg., 2019-01-01.

Abstract

Deciding price policies in order to attract new investments on renewable energy generation remains a challenge to many public policy-makers. This is particularly relevant to the Brazilian sugarcane industry, which has experienced a significant reduction in new bioenergy projects in recent years. Since investment costs thereof are expressive, a producer's willingness to increase energy generation is highly dependent on market conditions. Herein, we propose an optimization model based on portfolio theory to assess different price policies for attracting investment, where historical variations in sugar, ethanol and spot-market electricity prices are accounted for. Results obtained on a representative case study highlight the significant role played by regulated market prices in mitigating financial risks in the sugarcane business. The analysis enables a better understanding of investors' behavior according to their aversion to risk. It could support policy-makers with more effective pricing in the regulated market to keep promoting bioenergy generation. (AU)

• FAPESP's process: 18/08255-1 - Production planning in sugarcane mills: new biogas technologies and optimal decisions
• Grantee: Victoria Morgado Mutran
• Support Opportunities: Scholarships abroad - Research Internship - Doctorate (Direct)
• FAPESP's process: 15/50684-9 - Sustainable gas pathways for Brazil: from microcosm to macrocosm
• Grantee: Reinaldo Giudici
• Support Opportunities: Research Projects - Thematic Grants
• FAPESP's process: 17/17530-3 - Production planning in sugarcane mills: new biogas technologies and optimal decisions
• Grantee: Victoria Morgado Mutran
• Support Opportunities: Scholarships in Brazil - Doctorate (Direct)