Misreporting in wind power contracts: Evidence from a feed-in tariff in Brazil

The study analyzes the PROINFA feed-in tariff in Brazil, finding that project developers systematically misreported capacity factors (CFs) due to a tiered price schedule and a lack of penalties for overpayments. This misreporting led to a 14% gap between expected and actual energy production and resulted in 12% of first-year payments being over-payments. The authors suggest that a simple 1% interest rate penalty on overpayments would eliminate this misreporting, making the policy more cost-effective.

• Project developers in the PROINFA program systematically misreported capacity factors (CFs), with reported values consistently higher than realized values. The average reported CF was 35%, while the average realized value was 31%.
• Misreporting was driven by the design of PROINFA's tiered price schedule and the absence of interest penalties on overpayments. The price scheme incentivized underreporting to obtain a higher price per MWh, while reporting higher CFs increased the total quantity of energy contracted and total payments.
• The discrepancies between reported and realized CFs had two primary negative impacts: they reduced the actual amount of renewable energy delivered compared to plans, and they created a financial burden where 12% of first-year payments to wind farms were over-payments for energy not delivered.
• Simulations indicate that a small design change—specifically a 1% interest rate penalty on overpayments—would completely eliminate misreporting and improve policy cost-effectiveness. Conversely, replacing the tiered system with a constant unit price would actually increase the gap between expected and actual energy production from 14% to 90%.
• PROINFA succeeded in increasing Brazil's installed wind capacity from 29 MW in 2004 to 2,010 MW in 2012, though its cost-effectiveness was hampered by contract design issues.

APA

Assunção, J., Chiavari, J., & Szerman, D. (2014). Misreporting in wind power contracts: Evidence from a feed-in tariff in Brazil. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Executive-Summary.pdf

Chicago

Assunção, Juliano, Joana Chiavari, and Dimitri Szerman. Misreporting in wind power contracts: Evidence from a feed-in tariff in Brazil. Climate Policy Initiative, 2014. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Executive-Summary.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Chiavari |first2=Joana |last3=Szerman |first3=Dimitri |title=Misreporting in wind power contracts: Evidence from a feed-in tariff in Brazil |publisher=Climate Policy Initiative |date=April 2014 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Executive-Summary.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{assuno2014misreporting, author = {Assunção, Juliano and Chiavari, Joana and Szerman, Dimitri}, title = {{Misreporting in wind power contracts: Evidence from a feed-in tariff in Brazil}}, institution = {Climate Policy Initiative}, year = {2014}, month = apr, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Executive-Summary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }