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Cointegration Relationships to Estimate the Marginal Cost of Deficit in Planning a Hydrothermal System: The Case of Brazil

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  • Lucio Guido Tapia Carpio

    (Federal University of Rio de Janeiro, Energy Planning Program, COPPE/UFRJ, Brazil)

Abstract

The aim of this study is to analyze the behavior of gross domestic product (GDP) compared to electricity consumption in Brazil to estimate the curve of deficit marginal cost. The deficit cost is used as exogenous parameter in the chain of models for planning the operation and expansion of a hydrothermal system as part of the total cost of operation. The results show a cointegration relationship between GDP and electricity consumption; therefore, there is a long-term equilibrium relationship between GDP and electricity consumption. This relationship is used to estimate the curve of deficit marginal cost. The possible short-term imbalance can be mitigated using the vector error correction model (VEC).

Suggested Citation

  • Lucio Guido Tapia Carpio, 2014. "Cointegration Relationships to Estimate the Marginal Cost of Deficit in Planning a Hydrothermal System: The Case of Brazil," International Journal of Energy Economics and Policy, Econjournals, vol. 4(2), pages 117-124.
    • Handle: RePEc:eco:journ2:2014-02-1
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    Citations

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    Cited by:

    1. Al Aali-Bujari & Francisco Venegas-Mart nez & Roberto J. Santill n-Salgado, 2018. "On the Stock Market-Electricity Sector Nexus in Latin America: A Dynamic Panel Data Model," International Journal of Energy Economics and Policy, Econjournals, vol. 8(6), pages 148-154.
    2. Daniel Ştefan Armeanu & Ştefan Cristian Gherghina & George Pasmangiu, 2019. "Exploring the Causal Nexus between Energy Consumption, Environmental Pollution and Economic Growth: Empirical Evidence from Central and Eastern Europe," Energies, MDPI, vol. 12(19), pages 1-27, September.
    3. Botelho, Vinícius, 2019. "Estimating the economic impacts of power supply interruptions," Energy Economics, Elsevier, vol. 80(C), pages 983-994.

    More about this item

    Keywords

    Energy deficit; Cointegration; Rationing; Energy planningJournal: International Journal of Energy Economics and Policy;
    All these keywords.

    JEL classification:

    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • O53 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Asia including Middle East
    • P28 - Political Economy and Comparative Economic Systems - - Socialist and Transition Economies - - - Natural Resources; Environment

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