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Perspective of uncertainty and risk from the CVaR-LCOE approach: An analysis of the case of PV microgeneration in Minas Gerais, Brazil

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  • Aquila, Giancarlo
  • Coelho, Eden de Oliveira Pinto
  • Bonatto, Benedito Donizeti
  • Pamplona, Edson de Oliveira
  • Nakamura, Wilson Toshiro

Abstract

This present study proposes to investigate whether the classification based on deterministic LCOE (Levelized Cost of Electricity) for PV microgeneration in twenty cities in Minas Gerais (Brazil) presents differences in relation to risk classification, based on a stochastic approach, namely CVaR-LCOE (Conditional Value at Risk – LCOE). In this stochastic approach, the Conditional Value at Risk (CVaR) is calculated with 99.9% confidence level for 5000 LCOE values for each city, generated by Monte Carlo Simulation. CVaR-LCOE results show a significant difference in ranking in relation to the deterministic approach. Diamantina city presented the best expected LCOE and the best CVaR-LCOE results. However, the cities located in Zona da Mata (Muriaé, Juiz de Fora and Manhuaçu) are the worst in the deterministic ranking, but in CVaR-LCOE approach, Juiz de Fora and Manhuaçu results are better than Ipatinga, Governador Valadares, and Poços de Caldas, this last one which presents the worst CVaR-LCOE. It is also clear that in the CVaR-LCOE ranking, the cities in different regions appear in more shuffle positions in the ranking, the opposite was observed in the deterministic ranking. Cities with the lowest LCOE standard deviation had the best classification changes among the two rankings.

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  • Aquila, Giancarlo & Coelho, Eden de Oliveira Pinto & Bonatto, Benedito Donizeti & Pamplona, Edson de Oliveira & Nakamura, Wilson Toshiro, 2021. "Perspective of uncertainty and risk from the CVaR-LCOE approach: An analysis of the case of PV microgeneration in Minas Gerais, Brazil," Energy, Elsevier, vol. 226(C).
    • Handle: RePEc:eee:energy:v:226:y:2021:i:c:s0360544221005764
    DOI: 10.1016/j.energy.2021.120327
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