Storage capacity plan and transition of heterogeneous energy at regional strategic level: A financial derivative perspective

Yuqun Dong, Yaming Zhuang and Zhilei Pan

Energy, 2024, vol. 308, issue C

Abstract: Energy storage plays a key role in harvesting energy among heterogeneous energy sources. To transform heterogeneous energy and plan storage capacity at the regional strategic level, this study simulates storage capacity settings for heterogeneous energy in a certain region (Jiangsu Province in China) from the perspective of investment portfolio. This study then implements adjustments between the generation side and storage side during operations under a hedging ideology. Lastly, this study uses thermal energy on the generation side as an example to apply the switching real option method in decision-making for transitioning from thermal energy to renewable energy during disposal. The conclusion indicates that, from a financial derivative perspective, planning of heterogeneous energy storage capacity proves to be more efficient than existing regional plans and decision-making for transformation achieves investment triggers with higher energy values. Thus, this study aids the power system in planning energy storage and managing heterogeneous energy more economically and comprehensively at the regional strategic level.

Keywords: Storage capacity; Energy portfolio management; Financial derivative; Real option approach (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:308:y:2024:i:c:s0360544224027397

DOI: 10.1016/j.energy.2024.132965

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