Assessing Renewable Energy Projects

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As aforediscussed, many authors agree that capital utilization play an important role in defining business viability; however there is a lack of assessment methodologies for making such assessment possible on the context of assessing Renewable Energy Projects. In view of that, and in order to tackle this difficulty, a generic assessment model has been presented on Chapter three Within the context of studying Renewable Energy Projects, this section provides an application of the generic model as to provide a glance on the insights, or gains in knowledge that can be achieved from the exploration of capital. 4.1 Case-Study Motivations As we have previously discussed in Chapter one, the global demand for biofuels is expected to continue its growth at high rates in the foreseeable future, driven mainly by environmental pressure, and by the recent rise in oil prices. Accordingly, Brazil - the current world leader in ethanol production and exports (see Figure 12 “World Largest Ethanol Producers”, page 72) - is expected to continue to experience a fast expansion of its sugarcane-based renewable energy sector (for possible scenarios of expansion for Brazil, see Milanez, Favaret Filho, & Barros, 2008). It is a straightforward process. The current spike in oil prices pushed demand for ethanol by many nations looking for alternatives. As “Brazil has the lowest cost of production of ethanol and is so far the only country where biofuels are strictly competitive vis-à-vis oil derivatives” (Walter et al., 2008), it has become an important ethanol supplier (see Figure 13 “Brazilian Ethanol Exports”, page 73). Moreover, Brazil’s successful renewable energy program has been attracting considerable interest in the international market. Many countr... ... middle of paper ... ...of light-vehicles)”, page 76. By the beginning of 2009, there was around 35,000 filling stations throughout Brazil, all presenting, at least, one ethanol pump (Brazil, 2009c). The rapid adoption and commercial success of these vehicles, together with the mandatory blend of alcohol with gasoline (E25) sky rocketed ethanol production and consumption to levels that had not been reached since the peak of the Proálcool Program (see Figure 14, “Brazilian Ethanol Production by Type”, page 74. In July, 2009, the licensing of flex-fuel vehicles accounted for 88% of total light vehicles licensed in the country (Brazil, 2009f, p. 6). Today, it is estimated that between 1979 and 2008 Brazil successfully reduced the number of vehicles running exclusively on gasoline by 14.5 million, with 5.7 million ethanol-only and 8.4 million flex-fuel vehicles (ANFAVEA, 2008; Brazil, 2009f).

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