How accurate are forecasts of costs of energy? A methodological contribution
Siddons, Craig and Allan, Grant and McIntyre, Stuart (2015) How accurate are forecasts of costs of energy? A methodological contribution. Energy Policy, 87. pp. 224-228. ISSN 1873-6777 (https://doi.org/10.1016/j.enpol.2015.09.015)
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Abstract
Forecasts of the cost of energy are typically presented as point estimates; however forecasts are seldom accurate, which makes it important to understand the uncertainty around these point estimates. The scale of the differences between forecasts and outturns (i.e. contemporary estimates) of costs may have important implications for government decisions on the appropriate form (and level) of support, modelling energy scenarios or industry investment appraisal. This paper proposes a methodology to assess the accuracy of cost forecasts. We apply this to levelised costs of energy for different generation technologies due to the availability of comparable forecasts and contemporary estimates, however the same methodology could be applied to the components of levelised costs, such as capital costs. The estimated “forecast errors” capture the accuracy of previous forecasts and can provide objective bounds to the range around current forecasts for such costs. The results from applying this method are illustrated using publicly available data for on- and off-shore wind, Nuclear and CCGT technologies, revealing the possible scale of “forecast errors” for these technologies.
ORCID iDs
Siddons, Craig ORCID: https://orcid.org/0000-0003-3189-1208, Allan, Grant ORCID: https://orcid.org/0000-0002-1404-2768 and McIntyre, Stuart ORCID: https://orcid.org/0000-0002-0640-7544;-
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Item type: Article ID code: 54367 Dates: DateEventDecember 2015Published25 September 2015Published Online12 September 2015AcceptedSubjects: Technology > Electrical engineering. Electronics Nuclear engineering
Technology > Engineering (General). Civil engineering (General) > Environmental engineering
Social Sciences > CommerceDepartment: Faculty of Engineering > Electronic and Electrical Engineering
Strathclyde Business School > Economics
Strathclyde Business School > Fraser of Allander InstituteDepositing user: Pure Administrator Date deposited: 30 Sep 2015 09:21 Last modified: 30 Sep 2024 00:21 Related URLs: URI: https://strathprints.strath.ac.uk/id/eprint/54367