Misreporting in the Deployment of Wind Power: Evidence from Brazil

This research paper analyzes the PROINFA feed-in tariff scheme in Brazil, finding that its nonlinear pricing structure incentivized wind farm operators to misreport capacity factors. This led to a 14% shortfall in expected energy production and 12% over-payments in the first year of operation. The authors demonstrate through modeling that while a linear price would increase over-reporting, an interest rate penalty of 1% on overpayments would effectively eliminate the incentive to misreport.

• The Incentive Program for Alternative Sources of Energy (PROINFA) in Brazil utilized a nonlinear payment schedule that incentivized wind farms to misreport their capacity factors (CFs). Wind farms reporting CFs below 32.4% received a high price of R$204.3 per MWh, while those above 41.9% received a lower price of R$180.2 per MWh.
• Systematic misreporting of capacity factors led to significant discrepancies between expected and actual energy production and created financial losses. Wind farms contracted under PROINFA produced 14% less energy than expected, and 12% of total payments in the first year of operation were over-payments for energy that was never delivered.
• The average estimated capacity factor for the 41 operational wind farms in the study was 35.4%, whereas the average realized capacity factor was 31.1%.
• A counterfactual simulation suggests that a linear price schedule (a constant unit price) would have increased the gap between expected and actual energy output from 14% to 28.5%, as it would remove the higher unit price incentive for low-CF farms to report accurately.
• The authors find that introducing a 1% annual interest rate penalty on overpayments would effectively eliminate the incentives for wind farms to misreport their capacity factors.

APA

Assunção, J., Chiavari, J., & Szerman, D. (2014). Misreporting in the Deployment of Wind Power: Evidence from Brazil. Climate Policy Initiative. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Technical-Paper.pdf

Chicago

Assunção, Juliano, Joana Chiavari, and Dimitri Szerman. Misreporting in the Deployment of Wind Power: Evidence from Brazil. Climate Policy Initiative, 2014. https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Technical-Paper.pdf.

Wikipedia

{{cite report |last1=Assunção |first1=Juliano |last2=Chiavari |first2=Joana |last3=Szerman |first3=Dimitri |title=Misreporting in the Deployment of Wind Power: Evidence from Brazil |publisher=Climate Policy Initiative |date=May 2014 |url=https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Technical-Paper.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 the Deployment of Wind Power: Evidence from Brazil}}, institution = {Climate Policy Initiative}, year = {2014}, month = may, url = {https://www.climatepolicyinitiative.org/wp-content/uploads/2014/05/Misreporting-in-Wind-Power-Contracts-Technical-Paper.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }