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Long-term energy planning with uncertain environmental performance metrics

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  • Parkinson, Simon C.
  • Djilali, Ned

Abstract

Environmental performance (EP) uncertainties span a number of energy technology options, and pose planning risk when the energy system is subject to environmental constraints. This paper presents two approaches to integrating EP uncertainty into the long-term energy planning framework. The methodologies consider stochastic EP metrics across multiple energy technology options, and produce a development strategy that hedges against the risk of exceeding environmental targets. Both methods are compared within a case study of emission-constrained electricity generation planning in British Columbia, Canada. The analysis provides important insight into model formulation and the interactions with concurrent environmental policy uncertainties. EP risk is found to be particularly important in situations where environmental constraints become increasingly stringent. Model results indicate allocation of a modest risk premium in these situations can provide valuable hedging against EP risk.

Suggested Citation

  • Parkinson, Simon C. & Djilali, Ned, 2015. "Long-term energy planning with uncertain environmental performance metrics," Applied Energy, Elsevier, vol. 147(C), pages 402-412.
    • Handle: RePEc:eee:appene:v:147:y:2015:i:c:p:402-412
    DOI: 10.1016/j.apenergy.2015.02.006
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