The regional electricity generation mix in Scotland: A portfolio selection approach incorporating marine technologies
Abstract
Standalone 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 Info
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Bibliographic Info
Article provided by Elsevier in its journal Energy Policy.
Volume (Year): 39 (2011)
Issue (Month): 1 (January)
Pages: 6-22
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Web page: http://www.elsevier.com/locate/enpol
Related research
Keywords: Electricity generation mix Portfolio theory Regional energy policy;References
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Citations
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.Cited by:
- 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.
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