The Technological and environmental efficiency of the EU-27 power mix: An evaluation based on MPT

• Type: Article in International Scientific Journal
• Date: 2014

Authors

Fernando de llano paz (Author) Other; Susana Iglesias Antelo (Author) Other; Anxo Calvo Silvosa (Author) Other; Isabel Soares (Author) FEP

Journal

Title: Energy

Vol. 69 No. 1

Pages: 67-81

ISSN: 0360-5442

Publisher: Elsevier

Indexing

ISI Web of Knowledge - 21 Citations

ISI Web of Science

Scopus - 24 Citations

Scientific classification

FOS: Social sciences > Economics and Business

CORDIS: Social sciences > Economics

Other information

Authenticus ID: P-009-GQ9

DOI: 10.1016/j.energy.2014.02.036

Abstract (EN): Portfolio Theory can result in a valid and contrasted methodology for evaluating real assets and electricity production portfolios within the construct of energy planning. It results in a more complete alternative to the least-cost perspective. In the proposed model the production costs of all technologies are considered, including the different components of externalities (not only CO2 costs). This tries to correct for possible market failure, due to imperfect cost allocation. Furthermore, the model measurement of technological risk is based on the non-weighted addition of variances. This proposal can be a more robust calculation to obtain risk values. The model presents a risk minimisation objective function and a cost-risk efficient frontier. Two different cases are proposed: "Pure Markowitz" (with only simple portfolio approach constraints) and "Technological Limitation" (considering the participation portfolio limits for technologies). It makes it possible to analyse the efficiency of IEA.EU-27 portfolios for year 2010 and 2020 and 2030 horizons from a Portfolio Theory perspective. The results are shown in terms of proximity to the Efficient Frontier and demonstrate how the "efficient minimum risk path" (economical and environmental) for EU-27 is essentially based on an increasing share of renewable sources in the power generation portfolio.

Language: English

Type (Professor's evaluation): Scientific