Title :
Electricity generation portfolio evaluation for highly uncertain and carbon constrained future electricity industries
Author :
Vithayasrichareon, P. ; MacGill, I.F. ; Wen, F.S.
Author_Institution :
Centre for Energy & Environ. Markets, Univ. of New South Wales, Sydney, NSW, Australia
Abstract :
This paper proposes a stochastic model based on Monte-Carlo simulation to assess the expected costs and risks of different generation portfolios for electricity industries in an increasingly uncertain and carbon constrained world. The approach can incorporate uncertain carbon and fossil-fuel prices of virtually any probability distributions, as well as possible correlations between them. The tool provides expected overall costs and their associated probability distribution for any possible generation portfolio mix. The model is applied to a case study of an electricity industry with coal, CCGT and OCGT generation options that faces uncertain future carbon and fuel prices. Lognormal distributions are used to model fuel and carbon prices uncertainty. Results from the case study highlight some important issues including the potentially significant interactions between carbon and gas prices on portfolio performance. The proposed model enables the tradeoffs between expected system generation cost, associated cost uncertainty and CO2 emissions among generation portfolios to be identified.
Keywords :
Monte Carlo methods; electricity supply industry; power generation economics; Lognormal distributions; Monte-Carlo simulation; electricity generation portfolio evaluation; electricity industries; Monte Carlo simulation; electricity generation portfolio; generation investment under uncertainty;
Conference_Titel :
Power and Energy Society General Meeting, 2010 IEEE
Conference_Location :
Minneapolis, MN
Print_ISBN :
978-1-4244-6549-1
Electronic_ISBN :
1944-9925
DOI :
10.1109/PES.2010.5589354