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Impacts of Uncertainty and Increasing Returns on Sustainable Energy Development and Climate Change: A Stochastic Optimization Approach

A. Gritsevskyi and H. -H. Rogner
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A. Gritsevskyi: International Atomic Energy Agency
H. -H. Rogner: International Atomic Energy Agency

A chapter in Coping with Uncertainty, 2006, pp 195-216 from Springer

Abstract: Abstract In this article we discuss a stochastic optimization model used for evaluation of long-term energy development. The model includes the following features: 1. Increasing returns to scale for the costs of new technologies with uncertain learning rates; 2. Uncertain costs of all technologies and cost/quantities for energy sources, both renewable and depletable; 3. Uncertainties in future energy demands and their volatilities; 4. Uncertain environmental constrains; 5. Clusters of linked technologies that induced technological advances. In particular, this allows us to identify robust dynamic technology portfolios, which supply (in a sense) potential energy demand, while minimizing adjusted to risks expected costs together with investment and environmental risks. Formally, the discussed problem involves a non-convex, large-scale stochastic optimization model requiring special global optimization technique which takes advantage of the specific structure of the problem. This article primarily concentrated with main motivations, critical importance of non-convexity (increasing returns) and explicit treatment of uncertainty by using stochastic optimization approach.

Keywords: Energy System; Stochastic Optimization; Linear Optimization Problem; Cumulative Output; Apply System Analysis (search for similar items in EconPapers)
Date: 2006
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Persistent link: https://EconPapers.repec.org/RePEc:spr:lnechp:978-3-540-35262-4_12

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DOI: 10.1007/3-540-35262-7_12

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