IDEAS home Printed from https://ideas.repec.org/a/eee/proeco/v140y2012i2p622-629.html
   My bibliography  Save this article

Investment planning in electricity production under CO2 price uncertainty

Author

Listed:
  • Rentizelas, Athanasios A.
  • Tolis, Athanasios I.
  • Tatsiopoulos, Ilias P.

Abstract

The scope of this work is to investigate the effect that various scenarios for emission allowance price evolution may have on the future electricity generation mix of Greece. The renewable energy generation targets are taken into consideration as a constraint of the system, and the learning rates of the various technologies are included in the calculations.

Suggested Citation

  • Rentizelas, Athanasios A. & Tolis, Athanasios I. & Tatsiopoulos, Ilias P., 2012. "Investment planning in electricity production under CO2 price uncertainty," International Journal of Production Economics, Elsevier, vol. 140(2), pages 622-629.
    • Handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:622-629
    DOI: 10.1016/j.ijpe.2010.11.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0925527310004317
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ijpe.2010.11.002?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Madlener, Reinhard & Kumbaroglu, Gurkan & Ediger, Volkan S., 2005. "Modeling technology adoption as an irreversible investment under uncertainty: the case of the Turkish electricity supply industry," Energy Economics, Elsevier, vol. 27(1), pages 139-163, January.
    2. Huisman, Ronald & Mahieu, Ronald & Schlichter, Felix, 2009. "Electricity portfolio management: Optimal peak/off-peak allocations," Energy Economics, Elsevier, vol. 31(1), pages 169-174, January.
    3. Roques, Fabien A. & Newbery, David M. & Nuttall, William J., 2008. "Fuel mix diversification incentives in liberalized electricity markets: A Mean-Variance Portfolio theory approach," Energy Economics, Elsevier, vol. 30(4), pages 1831-1849, July.
    4. Porat, Yigal & Irith, Rotlevi & Turvey, Ralph, 1997. "Long-run marginal electricity generation costs in Israel," Energy Policy, Elsevier, vol. 25(4), pages 401-411, March.
    5. Kumbaroglu, Gürkan & Madlener, Reinhard & Demirel, Mustafa, 2008. "A real options evaluation model for the diffusion prospects of new renewable power generation technologies," Energy Economics, Elsevier, vol. 30(4), pages 1882-1908, July.
    6. Heinrich, G. & Howells, M. & Basson, L. & Petrie, J., 2007. "Electricity supply industry modelling for multiple objectives under demand growth uncertainty," Energy, Elsevier, vol. 32(11), pages 2210-2229.
    7. Svensson, Elin & Berntsson, Thore & Strömberg, Ann-Brith & Patriksson, Michael, 2009. "An optimization methodology for identifying robust process integration investments under uncertainty," Energy Policy, Elsevier, vol. 37(2), pages 680-685, February.
    8. Bar-Lev, Dan & Katz, Steven, 1976. "A Portfolio Approach to Fossil Fuel Procurement in the Electric Utility Industry," Journal of Finance, American Finance Association, vol. 31(3), pages 933-947, June.
    9. Tolis, Athanasios I. & Rentizelas, Athanasios A. & Tatsiopoulos, Ilias P., 2010. "Time-dependent opportunities in energy business: A comparative study of locally available renewable and conventional fuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 384-393, January.
    10. Shimon Awerbuch, 2006. "Portfolio-Based Electricity Generation Planning: Policy Implications For Renewables And Energy Security," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 11(3), pages 693-710, May.
    11. Jaber, J. O. & Al-Sarkhi, A. & Akash, B. A. & Mohsen, M. S., 2004. "Medium-range planning economics of future electrical-power generation options," Energy Policy, Elsevier, vol. 32(3), pages 357-366, February.
    12. McGovern, T. & Hicks, C., 2004. "Deregulation and restructuring of the global electricity supply industry and its impact upon power plant suppliers," International Journal of Production Economics, Elsevier, vol. 89(3), pages 321-337, June.
    13. Krey, Volker & Martinsen, Dag & Wagner, Hermann-Josef, 2007. "Effects of stochastic energy prices on long-term energy-economic scenarios," Energy, Elsevier, vol. 32(12), pages 2340-2349.
    14. Dobos, Imre, 2005. "The effects of emission trading on production and inventories in the Arrow-Karlin model," International Journal of Production Economics, Elsevier, vol. 93(1), pages 301-308, January.
    15. Gökçek, Murat & Genç, Mustafa Serdar, 2009. "Evaluation of electricity generation and energy cost of wind energy conversion systems (WECSs) in Central Turkey," Applied Energy, Elsevier, vol. 86(12), pages 2731-2739, December.
    16. Rentizelas, Athanasios A. & Tatsiopoulos, Ilias P., 2010. "Locating a bioenergy facility using a hybrid optimization method," International Journal of Production Economics, Elsevier, vol. 123(1), pages 196-209, January.
    17. Weigt, Hannes, 2009. "Germany's wind energy: The potential for fossil capacity replacement and cost saving," Applied Energy, Elsevier, vol. 86(10), pages 1857-1863, October.
    18. Turton, Hal, 2008. "ECLIPSE: An integrated energy-economy model for climate policy and scenario analysis," Energy, Elsevier, vol. 33(12), pages 1754-1769.
    19. Ali Akkemik, K., 2009. "Cost function estimates, scale economies and technological progress in the Turkish electricity generation sector," Energy Policy, Elsevier, vol. 37(1), pages 204-213, January.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kantapich Preedakorn & David Butler & Jörn Mehnen, 2023. "Challenges for the Adoption of Electric Vehicles in Thailand: Potential Impacts, Barriers, and Public Policy Recommendations," Sustainability, MDPI, vol. 15(12), pages 1-21, June.
    2. Federica Cucchiella & Idiano D Adamo & Massimo Gastaldi, 2015. "Profitability Analysis for Biomethane: A Strategic Role in the Italian Transport Sector," International Journal of Energy Economics and Policy, Econjournals, vol. 5(2), pages 440-449.
    3. Irawan, Chandra Ade & Jones, Dylan & Hofman, Peter S. & Zhang, Lina, 2023. "Integrated strategic energy mix and energy generation planning with multiple sustainability criteria and hierarchical stakeholders," European Journal of Operational Research, Elsevier, vol. 308(2), pages 864-883.
    4. repec:eco:journ2:2017-04-08 is not listed on IDEAS
    5. Hiromasa Ijuin & Satoshi Yamada & Tetsuo Yamada & Masato Takanokura & Masayuki Matsui, 2022. "Solar Energy Demand-to-Supply Management by the On-Demand Cumulative-Control Method: Case of a Childcare Facility in Tokyo," Energies, MDPI, vol. 15(13), pages 1-23, June.
    6. Romano, Teresa & Fumagalli, Elena, 2018. "Greening the power generation sector: Understanding the role of uncertainty," Renewable and Sustainable Energy Reviews, Elsevier, vol. 91(C), pages 272-286.
    7. Petr Cermak & Jarmila Zimmermannova & Jan Lavrincik & Miroslav Pokorny & Jiri Martinu, 2015. "The Broker Simulation Model in the Emission Allowances Trading Area," International Journal of Energy Economics and Policy, Econjournals, vol. 5(1), pages 80-95.
    8. Vincent Bertrand & Elodie Le Cadre, 2015. "Simulating the use of biomass in electricity with the green electricity simulate model: An application to the French power generation," Working Papers 1503, Chaire Economie du climat.
    9. Rentizelas, Athanasios & Georgakellos, Dimitrios, 2014. "Incorporating life cycle external cost in optimization of the electricity generation mix," Energy Policy, Elsevier, vol. 65(C), pages 134-149.
    10. Chandra Ade Irawan & Peter S. Hofman & Hing Kai Chan & Antony Paulraj, 2022. "A stochastic programming model for an energy planning problem: formulation, solution method and application," Annals of Operations Research, Springer, vol. 311(2), pages 695-730, April.
    11. Bordin, Chiara & Mishra, Sambeet & Palu, Ivo, 2021. "A multihorizon approach for the reliability oriented network restructuring problem, considering learning effects, construction time, and cables maintenance costs," Renewable Energy, Elsevier, vol. 168(C), pages 878-895.
    12. Li, Ying & Lukszo, Zofia & Weijnen, Margot, 2015. "The implications of CO2 price for China’s power sector decarbonization," Applied Energy, Elsevier, vol. 146(C), pages 53-64.
    13. Vincent Bertrand, 2019. "Co-firing Coal with Biomass under Mandatory Obligation for Renewable Electricity: Implication for the Electricity Mix," The Energy Journal, International Association for Energy Economics, vol. 0(Number 4).
    14. Ursavas, Evrim, 2017. "A benders decomposition approach for solving the offshore wind farm installation planning at the North Sea," European Journal of Operational Research, Elsevier, vol. 258(2), pages 703-714.
    15. Akihiko Takada & Hiromasa Ijuin & Masayuki Matsui & Tetsuo Yamada, 2023. "Seasonal Analysis and Capacity Planning of Solar Energy Demand-to-Supply Management: Case Study of a Logistics Distribution Center," Energies, MDPI, vol. 17(1), pages 1-23, December.
    16. Wang, Yong & Li, Lin, 2014. "Time-of-use based electricity cost of manufacturing systems: Modeling and monotonicity analysis," International Journal of Production Economics, Elsevier, vol. 156(C), pages 246-259.
    17. Waldemarsson, Martin & Lidestam, Helene & Karlsson, Magnus, 2017. "How energy price changes can affect production- and supply chain planning – A case study at a pulp company," Applied Energy, Elsevier, vol. 203(C), pages 333-347.
    18. Koltsaklis, Nikolaos E. & Dagoumas, Athanasios S. & Kopanos, Georgios M. & Pistikopoulos, Efstratios N. & Georgiadis, Michael C., 2014. "A spatial multi-period long-term energy planning model: A case study of the Greek power system," Applied Energy, Elsevier, vol. 115(C), pages 456-482.
    19. Chen, Hao & Tang, Bao-Jun & Liao, Hua & Wei, Yi-Ming, 2016. "A multi-period power generation planning model incorporating the non-carbon external costs: A case study of China," Applied Energy, Elsevier, vol. 183(C), pages 1333-1345.
    20. Bigerna, Simona & D'Errico, Maria Chiara & Polinori, Paolo & Simshauer, Paul, 2022. "Renewable energy and portfolio volatility spillover effects of GCC oil exporting countries," MPRA Paper 114164, University Library of Munich, Germany.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Rentizelas, Athanasios & Georgakellos, Dimitrios, 2014. "Incorporating life cycle external cost in optimization of the electricity generation mix," Energy Policy, Elsevier, vol. 65(C), pages 134-149.
    2. Tolis, Athanasios I. & Rentizelas, Athanasios A., 2011. "An impact assessment of electricity and emission allowances pricing in optimised expansion planning of power sector portfolios," Applied Energy, Elsevier, vol. 88(11), pages 3791-3806.
    3. Ioannou, Anastasia & Angus, Andrew & Brennan, Feargal, 2017. "Risk-based methods for sustainable energy system planning: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 74(C), pages 602-615.
    4. Chen, Hao & Tang, Bao-Jun & Liao, Hua & Wei, Yi-Ming, 2016. "A multi-period power generation planning model incorporating the non-carbon external costs: A case study of China," Applied Energy, Elsevier, vol. 183(C), pages 1333-1345.
    5. Dornan, Matthew & Jotzo, Frank, 2015. "Renewable technologies and risk mitigation in small island developing states: Fiji’s electricity sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 35-48.
    6. Delarue, Erik & De Jonghe, Cedric & Belmans, Ronnie & D'haeseleer, William, 2011. "Applying portfolio theory to the electricity sector: Energy versus power," Energy Economics, Elsevier, vol. 33(1), pages 12-23, January.
    7. Pérez Odeh, Rodrigo & Watts, David & Flores, Yarela, 2018. "Planning in a changing environment: Applications of portfolio optimisation to deal with risk in the electricity sector," Renewable and Sustainable Energy Reviews, Elsevier, vol. 82(P3), pages 3808-3823.
    8. Fuss, Sabine & Szolgayová, Jana & Khabarov, Nikolay & Obersteiner, Michael, 2012. "Renewables and climate change mitigation: Irreversible energy investment under uncertainty and portfolio effects," Energy Policy, Elsevier, vol. 40(C), pages 59-68.
    9. Arash Farnoosh, 2016. "On the economic optimization of national power generation mix in Iran: A Markowitz' portfolio-based approach," Working Papers hal-02475534, HAL.
    10. Zhu, Lei & Fan, Ying, 2010. "Optimization of China's generating portfolio and policy implications based on portfolio theory," Energy, Elsevier, vol. 35(3), pages 1391-1402.
    11. Madlener, Reinhard & Wenk, Christioph, 2008. "Efficient Investment Portfolios for the Swiss Electricity Supply Sector," FCN Working Papers 2/2008, E.ON Energy Research Center, Future Energy Consumer Needs and Behavior (FCN).
    12. Inzunza, Andrés & Moreno, Rodrigo & Bernales, Alejandro & Rudnick, Hugh, 2016. "CVaR constrained planning of renewable generation with consideration of system inertial response, reserve services and demand participation," Energy Economics, Elsevier, vol. 59(C), pages 104-117.
    13. Locatelli, Giorgio & Mancini, Mauro, 2011. "Large and small baseload power plants: Drivers to define the optimal portfolios," Energy Policy, Elsevier, vol. 39(12), pages 7762-7775.
    14. Sunderkötter, Malte & Weber, Christoph, 2012. "Valuing fuel diversification in power generation capacity planning," Energy Economics, Elsevier, vol. 34(5), pages 1664-1674.
    15. Yang, Yingkui & Solgaard, Hans Stubbe & Haider, Wolfgang, 2016. "Wind, hydro or mixed renewable energy source: Preference for electricity products when the share of renewable energy increases," Energy Policy, Elsevier, vol. 97(C), pages 521-531.
    16. Suzuki, Kengo & Uchiyama, Yohji, 2010. "Quantifying the risk of an increase in the prices of non-energy products by combining the portfolio and input-output approaches," Energy Policy, Elsevier, vol. 38(10), pages 5867-5877, October.
    17. Zhang, Mingming & Tang, Yamei & Liu, Liyun & Zhou, Dequn, 2022. "Optimal investment portfolio strategies for power enterprises under multi-policy scenarios of renewable energy," Renewable and Sustainable Energy Reviews, Elsevier, vol. 154(C).
    18. Jano-Ito, Marco A. & Crawford-Brown, Douglas, 2017. "Investment decisions considering economic, environmental and social factors: An actors' perspective for the electricity sector of Mexico," Energy, Elsevier, vol. 121(C), pages 92-106.
    19. Rowan Adams & Tooraj Jamasb, 2016. "Optimal Power Generation Portfolios with Renewables: An Application to the UK," Working Papers EPRG 1620, Energy Policy Research Group, Cambridge Judge Business School, University of Cambridge.
    20. Kim, Yeong Jae & Cho, Seong-Hoon & Sharma, Bijay P., 2021. "Constructing efficient portfolios of low-carbon technologies," Renewable and Sustainable Energy Reviews, Elsevier, vol. 150(C).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:proeco:v:140:y:2012:i:2:p:622-629. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ijpe .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.