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Alternative depreciation policies for promoting combined heat and power (CHP) development in Brazil

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  • Soares, Jeferson Borghetti
  • Szklo, Alexandre Salem
  • Tolmasquim, Maurício Tiomno

Abstract

This paper assessed the economic impact of alternative depreciation methods on the development of combined heat-and-power (CHP) systems in the Brazilian industrial sector. Alternative depreciation methods were proposed and the case study of a Brazilian chemical plant showed that the most effective depreciation method for the promotion of CHP plants in Brazil was the Matheson method with an accelerated depreciation schedule of 7 years. This alternative method was then applied to the Brazilian chemical industry as a whole, increasing its installed capacity in CHP systems by 24%. Therefore, fiscal incentives can be an interesting tool for promoting energy efficiency in the Brazilian industrial sector, promoting the expansion of CHP plants. It reduces government fiscal revenues, but it also induces the technological reposition and improves the feasibility of ventures that are not installed without this kind of incentive.

Suggested Citation

  • Soares, Jeferson Borghetti & Szklo, Alexandre Salem & Tolmasquim, Maurício Tiomno, 2006. "Alternative depreciation policies for promoting combined heat and power (CHP) development in Brazil," Energy, Elsevier, vol. 31(8), pages 1151-1166.
    • Handle: RePEc:eee:energy:v:31:y:2006:i:8:p:1151-1166
    DOI: 10.1016/j.energy.2005.05.004
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    References listed on IDEAS

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    1. Soares, J. B. & Szklo, A. S. & Tolmasquim, M. T., 2001. "Incentive policies for natural gas-fired cogeneration in Brazil's industrial sector -- case studies: chemical plant and pulp mill," Energy Policy, Elsevier, vol. 29(3), pages 205-215, February.
    2. Szklo, Alexandre Salem & Soares, Jeferson Borghetti & Tolmasquim, Mauricio Tiomno, 2004. "Economic potential of natural gas-fired cogeneration--analysis of Brazil's chemical industry," Energy Policy, Elsevier, vol. 32(12), pages 1415-1428, August.
    3. Salem Szklo, Alexandre & Borghetti Soares, Jeferson & Tiomno Tolmasquim, Maurício, 2000. "Economic potential of natural gas-fired cogeneration in Brazil: two case studies," Applied Energy, Elsevier, vol. 67(3), pages 245-263, November.
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    Cited by:

    1. Proenza Pérez, Nestor & Titosse Sadamitsu, Marlene & Luz Silveira, Jose & Santana Antunes, Julio & Eduardo Tuna, Celso & Erazo Valle, Atilio & Faria Silva, Natalia, 2015. "Energetic and exergetic analysis of a new compact trigeneration system run with liquefied petroleum gas," Energy, Elsevier, vol. 90(P2), pages 1411-1419.
    2. Zhang, Jian & Cho, Heejin & Knizley, Alta, 2016. "Evaluation of financial incentives for combined heat and power (CHP) systems in U.S. regions," Renewable and Sustainable Energy Reviews, Elsevier, vol. 59(C), pages 738-762.

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