Measuring Performance of Long-Term Power Generating Portfolios - Green Energy and Efficiency: An Economic Perspective - page 412

Mean-variance analysis of scenarios

60

55

SP

GG

AG

50

45

40

35

CB

30

4.0 4.2 4.4 4.6 4.8 5.0 5.2 5.4 5.6 5.8 6.0

Standard deviation (€/MWh)

Fig. 16 Mean electricity price and volatility of GB generation portfolios over 2012 - 2032 without
a oor carbon price

CO2 emissions (yearly average)

140

120

100

80

60

40

20

0

GONE GREEN SLOW

PROGRESSION

ACCELERATED
GROWTH

CONTRACTED
BACKGROUND

Scenario

Fig. 17 Yearly average carbon emissions from each GB generation mix over 2012 2032 without

-

a oor carbon price

Considering each portfolio in isolation, yearly average carbon emissions under GG
rise by 8.7 MtCO 2 , those under SP by 4.7 MtCO 2 , those under AG by 8.1 MtCO 2 ,
and

nally those under CB by 2.1 MtCO 2 .

4 Conclusions

MVP analysis has been increasingly adopted over the last decades to assess the
performance of power generating portfolios in a number of countries. This is
consistent with the notion that, in liberalized electricity markets, investors and
utilities are concerned not only with the average or expected return on their
investments but also with their risk. This basic tradeoff is suitably represented in a
diagram with a measure of performance on the vertical axis (e.g. expected elec-
tricity cost or power per monetary unit) and a measure of risk on the horizontal axis
(e.g. the standard deviation of the variable involved).