Optimization of power plant investments under uncertain renewable energy development paths - A multistage stochastic programming approach

Michaela Fürsch, Stephan Nagl () and Dietmar Lindenberger ()
Additional contact information
Michaela Fürsch: Energiewirtschaftliches Institut an der Universitaet zu Koeln
Dietmar Lindenberger: Energiewirtschaftliches Institut an der Universitaet zu Koeln

No 2012-8, EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI)

Abstract: Electricity generation from renewable energy sources (RES-E) is supposed to increase signi ficantly within the coming decades. However, uncertainty about the progress of necessary infrastructure investments, public acceptance and cost developments of renewable energies renders the achievement of political plans uncertain. Implementation risks of renewable energy targets are challenging for investment planning, because di fferent RES-E shares fundamentally change the optimal mix of dispatchable power plants. Speci cally, uncertain future RES-E deployment paths induce uncertainty about the steepness of the residual load duration curve and the hourly residual load structure. In this paper, we show how uncertain future RES-E penetrations impact the electricity system and try to quantify eff ects for the Central European power market. We use a multi-stage stochastic investment and dispatch model to analyze e ffects on investment choices, electricity generation and system costs. Our main findings include that the uncertain achievement of RES-E targets signi ficantly effects optimal investment decisions. First, a higher share of technologies with a medium capital/operating cost ratio is cost-efficient. Second, the value of storage units in systems with high RES-E penetrations might decrease. Third, in the case of the Central European power market, costs induced by the implementation risk of renewable energies seem to be rather small compared to total system costs.

Keywords: Multi-Stage Stochastic Programming; Renewable Energy; Power Plant Optimization (search for similar items in EconPapers)
JEL-codes: C61 C63 Q40 (search for similar items in EconPapers)
Pages: 29 pages
Date: 2012-05-09
New Economics Papers: this item is included in nep-ene, nep-env and nep-eur
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

Downloads: (external link)
https://www.ewi.uni-koeln.de/cms/wp-content/upload ... lant-investments.pdf Full text (application/pdf)

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:ris:ewikln:2012_008

Access Statistics for this paper

More papers in EWI Working Papers from Energiewirtschaftliches Institut an der Universitaet zu Koeln (EWI) Contact information at EDIRC.
Bibliographic data for series maintained by Sabine Williams ().