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Investment in the energy sector: An optimization model that contemplates several uncertain parameters

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  • Cunico, Maria Laura
  • Flores, Julio Rolando
  • Vecchietti, Aldo

Abstract

Investments in the energy sector on the medium/long term are risky due to the uncertainties having in this sector: price volatility, unclear demands and indeterminate fossil reserve volumes, among others. Decision making tools plays an important role in order to attenuate the effect of uncertainties in the investment by including this aspect in the models. In this sense, mathematical programming models provide analytical tools to improve the decision making process. This paper presents a multi-period mathematical model for planning investments in the energy sector in a medium time horizon. The model considers several imprecise information of the energy market: uncertainty in the price of fossil resources, the trend in the growing demand and the variation in the availability of fossil reserves.

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  • Cunico, Maria Laura & Flores, Julio Rolando & Vecchietti, Aldo, 2017. "Investment in the energy sector: An optimization model that contemplates several uncertain parameters," Energy, Elsevier, vol. 138(C), pages 831-845.
    • Handle: RePEc:eee:energy:v:138:y:2017:i:c:p:831-845
    DOI: 10.1016/j.energy.2017.07.103
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    2. Izzet Alp Gul & Gülgün Kayakutlu & M. Özgür Kayalica, 2020. "Risk Analysis in Renewable Energy System (RES) Investment for a Developing Country: A Case Study in Pakistan," Arthaniti: Journal of Economic Theory and Practice, , vol. 19(2), pages 204-223, December.
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    5. Pantula, Priyanka D. & Mitra, Kishalay, 2019. "A data-driven approach towards finding closer estimates of optimal solutions under uncertainty for an energy efficient steel casting process," Energy, Elsevier, vol. 189(C).

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