Cost Uncertainties in Energy System Optimization Models: A Quadratic Programming Approach for Avoiding Penny Switching Effects

Peter Lopion, Peter Markewitz, Detlef Stolten and Martin Robinius
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Peter Lopion: Institute of Electrochemical Process Engineering (IEK-3), Forschungszentrum Jülich GmbH, Wilhelm-Johnen-Str., 52428 Jülich, Germany
Peter Markewitz: Institute of Electrochemical Process Engineering (IEK-3), Forschungszentrum Jülich GmbH, Wilhelm-Johnen-Str., 52428 Jülich, Germany
Detlef Stolten: Institute of Electrochemical Process Engineering (IEK-3), Forschungszentrum Jülich GmbH, Wilhelm-Johnen-Str., 52428 Jülich, Germany
Martin Robinius: Institute of Electrochemical Process Engineering (IEK-3), Forschungszentrum Jülich GmbH, Wilhelm-Johnen-Str., 52428 Jülich, Germany

Energies, 2019, vol. 12, issue 20, 1-12

Abstract: Designing the future energy supply in accordance with ambitious climate change mitigation goals is a challenging issue. Common tools for planning and calculating future investments in renewable and sustainable technologies are often linear energy system models based on cost optimization. However, input data and the underlying assumptions of future developments are subject to uncertainties that negatively affect the robustness of results. This paper introduces a quadratic programming approach to modifying linear, bottom-up energy system optimization models to take cost uncertainties into account. This is accomplished by implementing specific investment costs as a function of the installed capacity of each technology. In contrast to established approaches such as stochastic programming or Monte Carlo simulation, the computation time of the quadratic programming approach is only slightly higher than that of linear programming. The model’s outcomes were found to show a wider range as well as a more robust allocation of the considered technologies than the linear model equivalent.

Keywords: energy system modeling; uncertainties; robustness; penny switching effect (search for similar items in EconPapers)
JEL-codes: Q Q0 Q4 Q40 Q41 Q42 Q43 Q47 Q48 Q49 (search for similar items in EconPapers)
Date: 2019
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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