Perspectives under uncertainties and risk in wind farms investments based on Omega-LCOE approach: An analysis in Sao Paulo state, Brazil

This present study proposes the stochastic approach Omega-LCOE to compare a Levelized Costa of Electricity (LCOE) between different locations. To validate the proposed approach, an investigation to compare the wind energy LCOE of 63 main cities in Sao Paulo state (Brazil) in relation to world LCOE average. Therefore, the Omega value estimated by a ratio of potential gains (costs reductions) and losses (costs inflations) in relation to a benchmarking (world LCOE average) is calculated for each city, based on 10,000 values of LCOE obtained by Simulation of Monte Carlo. Omega-LCOE results shows significant differences from results obtained by deterministic LCOE. Eight cities that presented LCOE below the world average from a deterministic approach, prove to be superior to the world average through the Omega-LCOE approach. Jundiai, Franco da Rocha and Guarulhos present a deterministic LCOE higher than several cities, however when analyzing the uncertainties and risks these cities appear among those with the best LCOE performance in Sao Paulo state. In addition, it is observed that most cities in North and Northeast of Sao Paulo present LCOE performance better than world LCOE average, proving that these regions have the best wind potential in state. In turn, the South of Sao Paulo and the region called Vale do Paraiba present the worst results, being considered the highest cost places to install wind farms in Sao Paulo.