Environmental Engineering Reference
In-Depth Information
Mean-variance analysis of scenarios
61
GG&SP
59
AG
57
55
53
51
49
47
45
43
41
39
CB
1.50
1.70
1.90
2.10
2.30
2.50
Standard deviation (€/MWh)
Fig. 11 Mean electricity price and volatility of GB generation portfolios over 2012 - 2032
table at such low prices? 14 Would utilities change the way they bid in the
power market?
Each of the 750 simulations delivers whole paths of a number of variables. For
example, we have 750 levels of the electricity price from 2013 to 2032. Figure 12
shows the frequency distributions under each of the generation portfolios as
envisaged in ETYS 2012. Most cases (and the probability mass) are concentrated
around the average price. But they are skewed right: the electricity price becomes
very high in a few cases.
It is possible to derive an average electricity price as a by-product of the model:
in each optimization the operating technology with the highest cost sets the mar-
ginal price. So there are as many electricity prices as optimization problems. Each
portfolio delivers an average price.
Following de Neufville and Scholtes [ 13 ], we examine the cumulative distri-
bution functions (or CDFs, sometimes referred to as
be pro
), which present
a lot of information in a compact form and thus provide an effective way to compare
alternative generation portfolios; see Fig. 13 . The target curve under the CB stays
always above those of the other portfolios, that is, it stochastically dominates them.
Thus the CB portfolio entails a lower probability of surpassing any given level of
electricity price (the vertical distance from the target curve to 1.00).
target curves
3.6 Environmental Goals: Carbon Emissions
Needless to say, from a social planner
s perspective the generating cost is the
relevant measure [ 4 , 6 ]. In a carbon constrained environment, this cost re
'
ects the
14 Lynch et al. [ 24 ] calculate (hourly) electricity prices from the (hourly) marginal cost of elec-
tricity provision and determine the return of each power technology under least-cost dispatch and
marginal-cost pricing.
 
Search WWH ::




Custom Search