Electricity demand in the iron ore industry: Evidence from Brazil

Electricity demand in the iron ore industry: Evidence from Brazil

Resende, Max Cardoso de; Leal, Juliano Augusto; Simoni, João Marcos De

Artigo completo:

Este artigo avalia a demanda de eletricidade na indústria brasileira de minério de ferro com ênfase nos preços da eletricidade e na cadeia de valor da produção, a fim de abordar padrões de comportamento específicos do setor, usando dados diários de dezembro de 2018 a abril de 2020. Empregando funções de impulso-resposta e análise de decomposição de variância nota-se que a demanda de eletricidade é determinada, principalmente, por fatores internos à produção de minério e, não, por variáveis exógenas, como preço da eletricidade e condições climáticas. Também, as elasticidades preço da demanda por eletricidade de curto e longo prazo foram estimadas, indicando que o preço é inelástico em ambos os períodos de tempo, sugerindo que uma política pública energética que utilize preços (impostos) tem efeito reduzido, devido, principalmente, ao fatode que a maioria dos contratos realizados entre produtores e compradores envolve fornecimento da commoditie no longo prazo.

Electricity planning is a key strategic business in the mining industry. Thus, this paper assesses the electricity demand in the Brazilian iron ore industry with an emphasis on electricity prices and the production value chain to address the sector-specific behavioral patterns, using daily data from December 2018 to April 2020. By employing impulse response functions and variance decomposition analysis, the paper shows that electricity demand is primarily determined by internal factors of the ore production rather than exogenous variables, such as the electricity price and weather conditions. Moreover, short and long-run electricity price elasticities are computed, providing further insights into the dynamics of the sector, and indicating that price is inelastic with similar values for both time frames. This suggests from an energy policy perspective that any price movements (taxes) are bound to have a fairly limited effect as they may cause financial turmoil given the long-term characteristic of purchase contracts in the sector.

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DOI: 10.5151/v-enei-623

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Como citar:

Resende, Max Cardoso de; Leal, Juliano Augusto; Simoni, João Marcos De; "Electricity demand in the iron ore industry: Evidence from Brazil", p-162-172. In: Anais do V Encontro Nacional de Economia Industrial e Inovação (ENEI): “Inovação, Sustentabilidade e Pandemia”. São Paulo: Blucher, 2021.
ISSN 23577592, DOI 10.5151/v-enei-623