Quantifying the Uncertainty of Energy Creation from Solar and Wind Farms in Different Locations

Roy Nersesian and Kenneth David Strang
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Roy Nersesian: Leon Hess School of Business, Monmouth University, West Long Branch, NJ, USA
Kenneth David Strang: School of Business and Economics, State University of New York, Queensbury, NY, USA & APPC Research Australia, Cammeray, Australia

International Journal of Risk and Contingency Management (IJRCM), 2016, vol. 5, issue 2, 13-46

Abstract: This paper illustrates how to assess the risk associated with solar and wind farm energy creation by identifying the critical operational factors and then developing multivariate models. The study reveals that a dependence on solar and wind could place consumers at risk of interrupted service given the state of contemporary battery technology. Large scale electricity storage is not currently available which places a contingency risk on electricity generating capacity. More so, maintaining system stability where solar and wind play a significant role in generating electricity is a growing challenge facing utility operators. Therefore, the authors demonstrate how to build a model that quantifies uncertainty by matching uncontrollable supply to uncontrollable demand where a gravity battery may be installed as a buffer. This novel approach generalizes to fossil fuel and nuclear plant operations because demand fluctuations could be managed by storing surplus energy into a gravity battery to meet high peak periods.

Date: 2016
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Persistent link: https://EconPapers.repec.org/RePEc:igg:jrcm00:v:5:y:2016:i:2:p:13-46

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