The Regional Electricity Generation Mix in Scotland : a Portfolio Selection Approach
Allan, Grant and Eromenko, Igor and McGregor, Peter and Swales, Kim (2010) The Regional Electricity Generation Mix in Scotland : a Portfolio Selection Approach. Discussion paper. University of Strathclyde, Glasgow.
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Abstract
Standalone levelised cost assessments of electricity supply options miss an important contribution that renewable and non-fossil fuel technologies can make to the electricity portfolio: that of reducing the variability of electricity costs, and their potentially damaging impact upon economic activity. Portfolio theory applications to the electricity generation mix have shown that renewable technologies, their costs being largely uncorrelated with non-renewable technologies, can offer such benefits. We look at the existing Scottish generation mix and examine drivers of changes out to 2020. We assess recent scenarios for the Scottish generation mix in 2020 against mean-variance efficient portfolios of electricity-generating technologies. Each of the scenarios studied implies a portfolio cost of electricity that is between 22% and 38% higher than the portfolio cost of electricity in 2007. These scenarios prove to be “inefficient” in the sense that, for example, lower variance portfolios can be obtained without increasing portfolio costs, typically by expanding the share of renewables. As part of extensive sensitivity analysis, we find that Wave and Tidal technologies can contribute to lower risk electricity portfolios, while not increasing portfolio cost.
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Item type: Monograph(Discussion paper) ID code: 67835 Dates: DateEvent2010PublishedNotes: Published as a paper within the Discussion Papers in Economics, No. 10-10 (2010) Subjects: Social Sciences > Communities. Classes. Races > Regional economics. Space in economics
TechnologyDepartment: Strathclyde Business School > Economics Depositing user: Pure Administrator Date deposited: 14 May 2019 14:15 Last modified: 08 Aug 2024 00:41 URI: https://strathprints.strath.ac.uk/id/eprint/67835