Multicriteria Analysis of the Opportunity Cost of the Sale of Paraguayan Energy from Itaipu to Brazilian Market

Abstract

Paraguay has a great availability of hydroelectric energy based on its participation in the binational power plants Itaipu and Yacyreta. However, today, it only consumes a small portion of the energy that corresponds to it, and the surpluses are transferred to the condominium countries according to the regulatory frameworks established by the constitutive treaties. In the specific case of Itaipu, it is not possible to export hydroelectric surpluses to third countries, however, as a result of intense negotiations between the governments of Paraguay and Brazil in 2009, the possibility of commercializing the hydroelectric surpluses of Paraguay was opened directly only to the Brazilian market. Consequently, it is important to compare the benefits of the different strategies, in terms of the use of hydroelectric surpluses, which affect the socio-economic sectors of the country, i.e. social, economic, environmental dimension, etc .; This makes it necessary not only to define the price levels that make the option of exporting electricity to the Brazilian electricity market cover the opportunity costs of other strategies from the economic point of view, but also to analyze the variations in these opportunity costs with consideration of multiple criteria. Therefore, a methodology based on an AHP model is proposed to determine the opportunity cost of the sale of Paraguayan energy from Itaipu to the Brazilian market as a problem in which several possible strategies for the utilization of hydropower surpluses from Paraguay are addressed.