Abstract
abstract: Reducing the use of fossil fuels and mitigating environmental impacts justifies the generation of electricity from renewable sources. In Brazil, sugarcane is the biomass that most generates electricity, and Mato Grosso do Sul state accounts for 10% of this electricity. Production can be traded in the spot market, long-term contracts regulated by the Federal Government, or free contracts between companies. Despite these options, only half of the sugarcane industries in Mato Grosso do Sul commercialize electricity. Based on Transaction cost economics, the objective of this work is to identify the most suitable governance structures used in the commercialization of electricity produced by the sugarcane plants in the state of Mato Grosso do Sul and to evaluate the institutional environment impact on these structures. A questionnaire was applied to all sugarcane companies in the state, and interviews were conducted with specialists and regulatory agencies. The results indicate that the widespread use of plural forms of governance for the commercialization of energy reduces the risks linked to a weak institutional environment and judicialization of the spot market. The preference for free contracts and a large number of short-term transactions indicate a lack of trust in the existing institutions, with the need to strengthen independent regulatory agencies.
Highlights
Global energy security is one of the priorities of developed countries and has been gaining a prominent role in the international debate
The analysis describes the characteristics of the institutional arrangements in the commercialization of electricity by sugarcane mills in Mato Grosso do Sul, and the impact of institutions on the uncertainty in the sector
The commercial electricity delivered by the sugar and alcohol industry of Mato Grosso do Sul in the 2016/17 harvest was 2,718 GWh, more than 10% of the electricity produced with sugarcane biomass in the same period in Brazil (Associação dos Produtores de Bioenergia de Mato Grosso do Sul, 2019; União da Industria de Cana de Açúcar, 2017)
Summary
Global energy security is one of the priorities of developed countries and has been gaining a prominent role in the international debate. The International Energy Agency (2013) predicts a growth of 56% in the world energy consumption by 2040. Still, according to the same source, most of this increase will come from countries such as China, India, Brazil, and South Africa, which have energy needs stimulated by economic growth. Despite the growth projections in the world consumption, the Brazilian Ministry of Mines and Energy (Brasil, 2016) calculated a decrease of 1.3% in the Brazilian electric energy supply between 2014 and 2015, mainly because of the recession, in addition to the drought in the Southeast region of the country. In 2015, the domestic electricity supply was 615.9 TWh. In that year, the sugar and alcohol sector as a whole generated 34.2 TWh, 13.7 TWh for own consumption, and 20.5 TWh for commercialization. The remaining 30% came mainly from black liquor, a waste generated by the pulp and paper industry (Brasil, 2016)
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