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Time Span does Matter for Offshore Wind Plant Allocation with Modern Portfolio Theory

Author

Listed:
  • Lana V. L. Costa-Silva

    (Federal University of Rio Grande do Norte, Brazil,)

  • Vinicio S. Almeida

    (Federal University of Rio Grande do Norte, Graduate School of Management, UFRN-PPGA, Salgado Filho Av., 3000, Lagoa Nova, Natal-RN, 59078-900, Brazil,)

  • Felipe M. Pimenta

    (Federal University of Santa Catarina, Brazil,)

  • Giovanna T. Segantini

    (Federal University of Rio Grande do Norte, Brazil.)

Abstract

Allocating wind farms across different locations may reduce the problematic intermittency of wind. The objective of this research was to analyze the optimal allocation of offshore wind farms in the U.S. East Coast through modern portfolio theory. The research was conducted with 25.934 secondary observations of offshore wind energy produced by 11 hypothetical offshore wind farms. We calculated six minimum variance portfolios, each referring to a distinct time period. Four rebalancing strategies were settled in order to assess the performance of the portfolios we estimated. The results indicate that MPT can be used to calculate the diversification of offshore wind farms locations, which may reduce the individual variability of hourly wind power changes.

Suggested Citation

  • Lana V. L. Costa-Silva & Vinicio S. Almeida & Felipe M. Pimenta & Giovanna T. Segantini, 2017. "Time Span does Matter for Offshore Wind Plant Allocation with Modern Portfolio Theory," International Journal of Energy Economics and Policy, Econjournals, vol. 7(3), pages 188-193.
    • Handle: RePEc:eco:journ2:2017-03-22
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    References listed on IDEAS

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    More about this item

    Keywords

    Modern Portfolio Theory; Optimal Allocation; Offshore Wind Power;
    All these keywords.

    JEL classification:

    • C61 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Optimization Techniques; Programming Models; Dynamic Analysis
    • C53 - Mathematical and Quantitative Methods - - Econometric Modeling - - - Forecasting and Prediction Models; Simulation Methods
    • L94 - Industrial Organization - - Industry Studies: Transportation and Utilities - - - Electric Utilities
    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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