Assessing the feasibility of electric energy generation from agricultural waste in Brazil

Abstract

In Brazil, the alternatives for electric energy generation are getting scarce. On the other hand, the country is a large agricultural producer and the waste from the crops is not used in thermoelectric power plants. A major obstacle for such utilization are transportation costs. We propose a model that describes the value of placing multiple power plants fueled with agricultural waste in certain locations and selecting given regions to source materials for these plants. The model allows assessing the feasibility of producing electric energy from agricultural waste in given regions of the country. We model the decision about where to build the power plants as an optimization problem and apply heuristic algorithms to find its solutions. We used the proposed model and optimizer to analyze 432 scenarios involving the states of São Paulo and Paraná, in Brazil. Results indicate that generating electrical energy from agricultural waste can be economically viable with annual discount rates below 20% and producer’s fee under 7.5% of the final product price. In addition, the investor should build the power plants to cope with current levels of agricultural waste supply and Paraná offers opportunities with larger present value than São Paulo.