Economic objectives, uncertainties and decision making in the energy sector

Martin Bischoff () and Johannes Jahn ()
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Martin Bischoff: Siemens AG, Corporate Technology
Johannes Jahn: Universität Erlangen-Nürnberg

Journal of Business Economics, 2016, vol. 86, issue 1, No 6, 85-102

Abstract: Abstract The German Energiewende has led to serious changes on the energy market. Technological innovations, growing technical and economical maturity and ongoing optimizations make renewable energies increasingly competitive. After describing appropriate economic objectives in the energy sector, the present paper highlights the difficulties arising in decision making in the area of renewable energies. Since decisions in the field of wind and solar energy depend on good weather forecasts, this paper focuses on the treatment of risks and uncertainties. For a wind power station convex combinations of Weibull distributions are presented as a general model for the description of the distributions of wind speeds. For the investigation of deterministic uncertainties a method is proposed, which has been recently developed for a specific case (Bischoff et al., Hard uncertainties in multiobjective layout optimization of photovoltaic power plants, 2015) and which is now formulated for the standard case of non-dynamic uncertainty sets. Finally, a new approach of error propagation is presented, which describes the propagation of errors in wind speeds to the resulting Weibull probability density functions.

Keywords: Renewable energy economics; Energy forecasting; Decision making under risk and uncertainty (search for similar items in EconPapers)
JEL-codes: D81 G11 Q47 (search for similar items in EconPapers)
Date: 2016
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Citations: View citations in EconPapers (3)

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DOI: 10.1007/s11573-015-0785-1

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