IDEAS home Printed from https://ideas.repec.org/p/ehl/lserod/114292.html
   My bibliography  Save this paper

Comparing district heating options under uncertainty using stochastic ordering

Author

Listed:
  • Volodina, Victoria
  • Wheatcroft, Edward
  • Wynn, Henry

Abstract

District heating is expected to play an important role in the decarbonisation of the energy sector in the coming years since low carbon sources such as waste heat and biomass are increasingly being used to generate heat. The design of district heating often has competing objectives: the need for inexpensive energy and meeting low carbon targets. In addition, the planning of district heating schemes is subject to multiple sources of uncertainty, such as variability in heat demand and energy prices. This paper proposes a decision support tool to analyse and compare system designs for district heating under uncertainty using stochastic ordering (dominance) so that decision-makers can make robust decisions. The uncertainty in input parameters of the energy system model together with general scenarios are introduced to generate distributions of net present costs and emissions for each design. To perform inference about the induced distributions of outputs, we apply the orderings in the mean and dispersion. The proposed approach is demonstrated in an application to the waste heat recovery problem in district heating in Brunswick, Germany. The results obtained show that heat pump, a low carbon design option, is more robust in comparison to combined heat and power (CHP) and a mix of CHP and heat pump under all three scenarios, highlighting that robustness is an attractive feature of low-temperature waste heat recovery.

Suggested Citation

  • Volodina, Victoria & Wheatcroft, Edward & Wynn, Henry, 2022. "Comparing district heating options under uncertainty using stochastic ordering," LSE Research Online Documents on Economics 114292, London School of Economics and Political Science, LSE Library.
  • Handle: RePEc:ehl:lserod:114292
    as

    Download full text from publisher

    File URL: http://eprints.lse.ac.uk/114292/
    File Function: Open access version.
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Annaert, Jan & Osselaer, Sofieke Van & Verstraete, Bert, 2009. "Performance evaluation of portfolio insurance strategies using stochastic dominance criteria," Journal of Banking & Finance, Elsevier, vol. 33(2), pages 272-280, February.
    2. Bhattacharya, Anindya & Kojima, Satoshi, 2012. "Power sector investment risk and renewable energy: A Japanese case study using portfolio risk optimization method," Energy Policy, Elsevier, vol. 40(C), pages 69-80.
    3. Lygnerud, Kristina & Wheatcroft, Edward & Wynn, Henry, 2019. "Contracts, business models and barriers to investing in low temperature district heating projects," LSE Research Online Documents on Economics 101286, London School of Economics and Political Science, LSE Library.
    4. Garry F. Barrett & Stephen G. Donald, 2003. "Consistent Tests for Stochastic Dominance," Econometrica, Econometric Society, vol. 71(1), pages 71-104, January.
    5. Pronzato, Luc & Wynn, Henry P. & Zhigljavsky, Anatoly A., 2018. "Simplicial variances, potentials and Mahalanobis distances," Journal of Multivariate Analysis, Elsevier, vol. 168(C), pages 276-289.
    6. Oja, Hannu, 1983. "Descriptive statistics for multivariate distributions," Statistics & Probability Letters, Elsevier, vol. 1(6), pages 327-332, October.
    7. Giovagnoli, Alessandra & Wynn, H. P., 1995. "Multivariate dispersion orderings," Statistics & Probability Letters, Elsevier, vol. 22(4), pages 325-332, March.
    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. Olena Borysiak & Łukasz Skowron & Vasyl Brych & Volodymyr Manzhula & Oleksandr Dluhopolskyi & Monika Sak-Skowron & Tomasz Wołowiec, 2022. "Towards Climate Management of District Heating Enterprises’ Innovative Resources," Energies, MDPI, vol. 15(21), pages 1-16, October.

    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. Averous, Jean & Meste, Michel, 1997. "Median Balls: An Extension of the Interquantile Intervals to Multivariate Distributions," Journal of Multivariate Analysis, Elsevier, vol. 63(2), pages 222-241, November.
    2. Ayala, Guillermo & López-Díaz, Miguel, 2009. "The simplex dispersion ordering and its application to the evaluation of human corneal endothelia," Journal of Multivariate Analysis, Elsevier, vol. 100(7), pages 1447-1464, August.
    3. Belzunce, Félix & Ruiz, José M. & Suárez-Llorens, Alfonso, 2008. "On multivariate dispersion orderings based on the standard construction," Statistics & Probability Letters, Elsevier, vol. 78(3), pages 271-281, February.
    4. Ulysse Lawogni, 2019. "Measures of Inequality In Vectors Distributions," Working Papers hal-02377802, HAL.
    5. Fernández-Ponce, J.M. & Rodríguez-Griñolo, R., 2006. "Preserving multivariate dispersion: An application to the Wishart distribution," Journal of Multivariate Analysis, Elsevier, vol. 97(5), pages 1208-1220, May.
    6. Zagst, Rudi & Kraus, Julia & Bertrand, Philippe, 2019. "Option-Based performance participation," Journal of Banking & Finance, Elsevier, vol. 105(C), pages 44-61.
    7. Romanazzi, Mario, 2009. "Data depth, random simplices and multivariate dispersion," Statistics & Probability Letters, Elsevier, vol. 79(12), pages 1473-1479, June.
    8. Fernandez-Ponce, J. M. & Suarez-Llorens, A., 2003. "A multivariate dispersion ordering based on quantiles more widely separated," Journal of Multivariate Analysis, Elsevier, vol. 85(1), pages 40-53, April.
    9. José Pablo Arias‐Nicolás & Félix Belzunce & Olga Núñez‐Barrera & Alfonso Suárez‐Llorens, 2009. "A multivariate IFR notion based on the multivariate dispersive ordering," Applied Stochastic Models in Business and Industry, John Wiley & Sons, vol. 25(3), pages 339-358, May.
    10. Oliver Linton & Esfandiar Maasoumi & Yoon-Jae Wang, 2002. "Consistent testing for stochastic dominance: a subsampling approach," CeMMAP working papers 03/02, Institute for Fiscal Studies.
    11. Kwame Addae‐Dapaah & Wilfred Tan Yong Hwee, 2009. "The unsung impact of currency risk on the performance of international real property investment," Review of Financial Economics, John Wiley & Sons, vol. 18(1), pages 56-65, January.
    12. G. Zioutas & C. Chatzinakos & T. D. Nguyen & L. Pitsoulis, 2017. "Optimization techniques for multivariate least trimmed absolute deviation estimation," Journal of Combinatorial Optimization, Springer, vol. 34(3), pages 781-797, October.
    13. Hooi Hooi Lean & Michael McAleer & Wing-Keung Wong, 2013. "Risk-averse and Risk-seeking Investor Preferences for Oil Spot and Futures," Documentos de Trabajo del ICAE 2013-31, Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales, Instituto Complutense de Análisis Económico, revised Aug 2013.
    14. Duangkamon Chotikapanich & William E. Griffiths, 2008. "Estimating Income Distributions Using a Mixture of Gamma Densities," Economic Studies in Inequality, Social Exclusion, and Well-Being, in: Duangkamon Chotikapanich (ed.), Modeling Income Distributions and Lorenz Curves, chapter 16, pages 285-302, Springer.
    15. Härdle, Wolfgang Karl & Schulz, Rainer & Xie, Taojun, 2019. "Cooling Measures and Housing Wealth: Evidence from Singapore," IRTG 1792 Discussion Papers 2019-001, Humboldt University of Berlin, International Research Training Group 1792 "High Dimensional Nonstationary Time Series".
    16. Matthias Parey & Jens Ruhose & Fabian Waldinger & Nicolai Netz, 2017. "The Selection of High-Skilled Emigrants," The Review of Economics and Statistics, MIT Press, vol. 99(5), pages 776-792, December.
    17. Victor Chernozhukov & Iván Fernández‐Val & Blaise Melly, 2013. "Inference on Counterfactual Distributions," Econometrica, Econometric Society, vol. 81(6), pages 2205-2268, November.
    18. Frank A. Wolak, 2016. "Level versus Variability Trade-offs in Wind and Solar Generation Investments: The Case of California," NBER Working Papers 22494, National Bureau of Economic Research, Inc.
    19. Jesus Gonzalo & Jose Olmo, 2014. "Conditional Stochastic Dominance Tests In Dynamic Settings," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 55(3), pages 819-838, August.
    20. Görlitz, Katja & Penny, Merlin & Tamm, Marcus, 2022. "The long-term effect of age at school entry on cognitive competencies in adulthood," Journal of Economic Behavior & Organization, Elsevier, vol. 194(C), pages 91-104.

    More about this item

    Keywords

    district heating; local sensitivity; scenarios; stochastic orderings; waste heat recovery; uropean Union’s Horizon 2020 research and innovation programme under grant agreement No 767429; project ReUseHeat.; H2020; esearch project Managing Uncertainty in Government Modelling (MUGM) funded by the Alan Turing Institute;
    All these keywords.

    JEL classification:

    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    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:ehl:lserod:114292. 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: LSERO Manager (email available below). General contact details of provider: https://edirc.repec.org/data/lsepsuk.html .

    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.