Implications of capacity expansion under uncertainty and value of information: The near-term energy planning of Japan

Pongsak Krukanont and Tetsuo Tezuka

Energy, 2007, vol. 32, issue 10, 1809-1824

Abstract: In this paper, we present the near-term analysis of capacity expansion under various uncertainties from the viewpoints of the decision-making process on the optimal allocation of investment and the value of information. An optimization model based on two-stage stochastic programming was developed using real data to describe the Japanese energy system as a case study. Different uncertainty parameters were taken into consideration by a disaggregate analysis of a bottom-up energy modeling approach, including end-use energy demands, plant operating availability and carbon tax rate. Four policy regimes represented as energy planning or policy options were also studied, covering business as usual, renewable energy target, carbon taxation and nuclear phase-out regimes. In addition, we investigated the role of various energy technologies and the behavior of the value of information with respect to the probability function of the worst-case scenario. This value of information provides decision makers with a quantitative analysis for the cost to obtain perfect information about the future. The developed model could be regarded as an applicable tool for decision support to provide a better understanding in energy planning and policy analyses.

Keywords: Energy planning; Energy policy; Decision making; Stochastic programming; Uncertainty (search for similar items in EconPapers)
Date: 2007
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (17)

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0360544207000333
Full text for ScienceDirect subscribers only

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:energy:v:32:y:2007:i:10:p:1809-1824

DOI: 10.1016/j.energy.2007.02.003

Access Statistics for this article

Energy is currently edited by Henrik Lund and Mark J. Kaiser

More articles in Energy from Elsevier
Bibliographic data for series maintained by Catherine Liu ().