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Optimal Wind Portfolios in Illinois

Author

Listed:
  • B. Andrew Chupp

    (Department of Economics, Illinois State University)

  • Emily Hickey
  • David Loomis

    (Department of Economics, Illinois State University)

Abstract

Current renewable portfolio standards in Illinois call for 25% of the state’s energy to be met through renewable means by 2025, with 75% of this requirement to come from wind. The problematic intermittency of wind might be overcome by a geographically disperse portfolio of wind farms. Using wind speeds and projected power measurements for 79 potential Illinois wind farms from 2004-2006, we use mean variance portfolio theory to calculate the optimal distribution of new wind installations.

Suggested Citation

  • B. Andrew Chupp & Emily Hickey & David Loomis, 2011. "Optimal Wind Portfolios in Illinois," Working Paper Series 20110401, Illinois State University, Department of Economics.
    • Handle: RePEc:ils:wpaper:20110401
    as

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    File URL: http://economics.illinoisstate.edu/RePec/Papers/20110401.pdf
    File Function: First version, 2011
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    References listed on IDEAS

    as
    1. 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.
    2. Drake, Ben & Hubacek, Klaus, 2007. "What to expect from a greater geographic dispersion of wind farms?--A risk portfolio approach," Energy Policy, Elsevier, vol. 35(8), pages 3999-4008, August.
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    Cited by:

    1. Gabriel Malta Castro & Claude Klockl & Peter Regner & Johannes Schmidt & Amaro Olimpio Pereira Jr, 2021. "Improvements to Modern Portfolio Theory based models applied to electricity systems," Papers 2105.08182, arXiv.org.
    2. 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.

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    Keywords

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    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • G11 - Financial Economics - - General Financial Markets - - - Portfolio Choice; Investment Decisions

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