Coal-fired electricity generation in Brazil under public regulation: security-of-supply assessment

Purpose This study aims to propose an approach to assess the security of supply (SS) in a coal-fired electricity generation supply chain subject to public price regulation in Brazil. This study characterizes the Brazilian scenario of coal-fired electricity generation, which represents less than 3.5% of the energy sources. Design/methodology/approach Data from six mining companies that supply a coal plant were analyzed in a case study. The risks were characterized and objectively estimated through a synthetic multidimensional index. Structural changes in the earnings before interest, taxes, depreciation, amortization and exploration indicator time series of coal companies (CC) were statistically detected. Findings Empirical evidence demonstrates that the supply chain has a low disruption risk (SS index equal to 0.74). However, when suppliers are individually analyzed, 48.64% of all coal shows moderated disruption risk, and 2.51% is under high risk. In addition, this study finds a drop in the financial results of CC related to public regulation of coal prices. This impacts the security of coal supply. Research limitations/implications This study discusses the influence of legal and regulatory policy risks in a coal power generation supply chain and the implications of the SS index as a management tool. Originality/value A novel SS index is presented and empirically operationalized, and its dimensions – environmental, occupational, operational, economic-financial and supply capacity – are analyzed.