The regional electricity generation mix in Scotland: A portfolio selection approach incorporating marine technologies
AbstractStandalone levelised cost assessments of electricity supply options miss an important contribution that renewable and non-fossil fuel technologies can make to the electricity portfolio: that of reducing the variability of electricity costs, and their potentially damaging impact upon economic activity. Portfolio theory applications to the electricity generation mix have shown that renewable technologies, their costs being largely uncorrelated with non-renewable technologies, can offer such benefits. We look at the existing Scottish generation mix and examine drivers of changes out to 2020. We assess recent scenarios for the Scottish generation mix in 2020 against mean-variance efficient portfolios of electricity-generating technologies. Each of the scenarios studied implies a portfolio cost of electricity that is between 22% and 38% higher than the portfolio cost of electricity in 2007. These scenarios prove to be mean-variance "inefficient" in the sense that, for example, lower variance portfolios can be obtained without increasing portfolio costs, typically by expanding the share of renewables. As part of extensive sensitivity analysis, we find that Wave and Tidal technologies can contribute to lower risk electricity portfolios, while not increasing portfolio cost.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoArticle provided by Elsevier in its journal Energy Policy.
Volume (Year): 39 (2011)
Issue (Month): 1 (January)
Contact details of provider:
Web page: http://www.elsevier.com/locate/enpol
Electricity generation mix Portfolio theory Regional energy policy;
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Saunders, Harry D., 1984. "On the inevitable return of higher oil prices," Energy Policy, Elsevier, vol. 12(3), pages 310-320, September.
- Fabien Roques & Céline Hiroux & Marcelo Saguan, 2009.
"Optimal Wind Power Deployment in Europe - a Portfolio Approach,"
RSCAS Working Papers
2009/17, European University Institute.
- Roques, Fabien & Hiroux, Céline & Saguan, Marcelo, 2010. "Optimal wind power deployment in Europe--A portfolio approach," Energy Policy, Elsevier, vol. 38(7), pages 3245-3256, July.
- Allan, Grant & Gilmartin, Michelle & McGregor, Peter & Swales, Kim, 2011. "Levelised costs of Wave and Tidal energy in the UK: Cost competitiveness and the importance of "banded" Renewables Obligation Certificates," Energy Policy, Elsevier, vol. 39(1), pages 23-39, January.
- Siddharth Chandra, 2002. "A Test of the Regional Growth-Instability Frontier Using State Data," Land Economics, University of Wisconsin Press, vol. 78(3), pages 442-462.
- H. Brett Humphreys & Katherine T. McClain, 1998. "Reducing the Impacts of Energy Price Volatility Through Dynamic Portfolio Selection," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3), pages 107-131.
- de Almeida, Pedro & Silva, Pedro D., 2009. "The peak of oil production--Timings and market recognition," Energy Policy, Elsevier, vol. 37(4), pages 1267-1276, April.
- Harry Markowitz, 1952. "Portfolio Selection," Journal of Finance, American Finance Association, vol. 7(1), pages 77-91, 03.
- 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 933-47, June.
- Matthew Dornan & Frank Jotzo, 2012.
"Renewable Technologies and Risk Mitigation in Small Island Developing States (SIDS): Fiji's Electricity Sector,"
Crawford School Research Papers
1201, Crawford School of Public Policy, The Australian National University.
- Matthew Dornan & Frank Jotzo, 2012. "Renewable Technologies and Risk Mitigation in Small Island Developing States (SIDS): Fiji’s Electricity Sector," Development Policy Centre Discussion Papers 1213, Development Policy Centre, Crawford School of Public Policy, The Australian National University.
- Chuang, Ming Chih & Ma, Hwong Wen, 2013. "Energy security and improvements in the function of diversity indices—Taiwan energy supply structure case study," Renewable and Sustainable Energy Reviews, Elsevier, vol. 24(C), pages 9-20.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei).
If references are entirely missing, you can add them using this form.