Rafael Kelman and Tarcisio Castro attended the seminar “Water Use Pricing and Pricing for the Electricity Sector” where the launching of the study on water pricing for the Electricity Sector in a scenario of scarcity was launched

Event – 05.12.2019

Instituto Escolhas and PSR have launched a study on water pricing for the Electricity Sector in a scenario of scarcity. A debate for the launch of the study was held in the auditorium of the newspaper Folha de São Paulo on Thursday (11/28).

In a context where climate change and increased water consumption - mainly because of irrigation - will make water resources increasingly contested, the debate pointed to ways for the country, with a strong recommendation to strengthen inter-institutional governance and make effective a national water management system. One of the great contributions of the work, according to Sergio Leitão, executive director of the Instituto Escolhas, is exactly to overturn some paradigms. “The notion that the country is abundant in water is one of the most dangerous myths.”

Three case studies were evaluated:

(1) Comparing the value of water in the São Francisco River basin for agricultural production with the vBalue of water for electricity production and implications of loss of thermal generation in a scenario of deep scarcity;

(2) Ceará drought and implications for thermal generation that captures water in the Castanhão reservoir. In this case a methodology (adhering to the previous study developed by PSR for the Instituto escolhas, which compared attributes of the various energy sources) was developed to internalize the variable cost unit (CVU) of the thermal plants of the water cost. This should consider the level of water criticality on the one hand and the cooling system (which affects water consumption) on the other.

(3) A debate on water use conflict for the Belo Monte plant. The impact of a possible increase in the environmental flow in the Xingu River - a recommendation of the Altamira Public Prosecution Service - on energy and economic aspects was shown.

See the presentation of the study “Electric Sector: how to price water in a scarcity scenario” at the link: http://bit.ly/33RwW2C

Read the Executive Summary here: http://bit.ly/2Lmf2yI