Effect of generation capacity factors on carbon emission intensity of electricity of Latin America & the Caribbean, a temporal IDA-LMDI analysis

Logarithmic mean Divisia for index decomposition analysis (IDA-LMDI) has been applied to evaluate the aggregate carbon emission intensity of electricity (ACI) evolution considering explaining factors as fuel mix, thermal efficiency, fossil share and geographical effects. However, the capacity factor of the generation system has not been duly considered in previous LMDI formulations. The capacity factor provides a perception of the time of use of the generation infrastructure. Despite LMDI analysis have been widely applied to explain the electricity-related CO2 emissions changes in many countries and regions of the world, Latin America & the Caribbean (LAC) power sector has not been analyzed yet. Since 1990 the global ACI declined around 5% whereas the ACI of LAC is just going in the opposite direction with a significant increase of 10%. To fill the research gap, this paper presents a new and general temporal IDA-LMDI formulation in order to expressly include the effect of capacity factors and analyze the evolution of LAC's ACI between 1990 and 2015. Results reveal the increase of the ACI in the region is due to structural reasons, mainly in Brazil. Intensity factors as thermal efficiency and fossil mix were also substantially improved, mainly in Mexico, but not enough to cut down the regional ACI increase. As a key result, it is shown that the capacity factors of fossil-based generation-mainly in Venezuela, Mexico and Brazil-are a relevant driving force behind the ACI increase. As Brazil is the largest producer and its capacity factor is relatively low compared to other LAC countries, the increasingly dispatch of fuel-fired power plants to cover base-load may boost the ACI of the region in the future jeopardizing the compliance of the climate goals.