Energy scenarios for the Minas Gerais State in Brazil: an integrated modeling exercise using System Dynamics: Doc 48

Developing medium- to long-term energy scenarios is a key to achieve goals of energy security and greenhouse gas emission reduction through the implementation of effective public policies. Despite the availability of many tools and methods that focus on energy planning from an engineering perspective, only a few approaches have the methodological capabilities to build energy scenarios and quantify their impacts across social and environment indicators in a dynamic and flexible way. To fill this gap, we have created a System Dynamics model customized for the state of Minas Gerais in Brazil to simulate possible trajectories of energy demand and supply. Two scenarios were developed: a business-as-usual case (BAU), with no major changes in the energy profile of the state; the other is an alternative scenario, where the reduction of carbon intensity (RIC) is a key goal. To summarize the results, the scenario RIC has lower greenhouse gas emissions and greater energy generation and employment, but has a total cumulative cost higher than BAU as the final indicators estimated. We can see important opportunities to contribute to global climate change mitigation while fostering a low-carbon energy sector and a green economy in the state. By investing in the renewable energy sources, energy efficiency, technological improvements, and the targets analyzed in this study, Minas Gerais State could reduce political and financial risks originating from the reliance on fossil fuels while generating more income in the energy sector and the state economy as a whole and reducing medium- and longer-term costs. [PUBLICATION ABSTRACT]