Policy making for generation expansion planning by means of portfolio theory; case study of Iran

Adabi, F ; Sharif University of Technology | 2017

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  1. Type of Document: Article
  2. Publisher: International Journal of Renewable Energy Research , 2017
  3. Abstract:
  4. The complex structure of the power system and the pivotal role of electrical energy in determining the socio-economic indicators of any countries lead the policy makers of power industry to take into account the expansion planning of generation system with high priority. Considering the intense fluctuations of costs in electrical energy generation (particularly due to variation of fuel prices within the recent years in the Middle East), finding an optimal generation portfolio, regardless of the costs variations risk looks impossible. The portfolio theory, as an efficient tool for risk management, provides a proper solution to materialize the optimal generation portfolios with the following properties: maximizing the expected return for any given level of risk, while minimizing risk for every given level of expected return. Determining an optimal generation technologies portfolio in Iran by the above-mentioned theory is the main aim of this study. To do so, two scenarios have been conducted and optimal generation portfolios have been determined considering the past 10 years recorded data and 10 upcoming years predicted data. Meanwhile, in each scenario the effect of renewable energy resources on optimal generation mix will be studied. According to the results, in both scenarios, presence of renewable energy generation is attractive and portfolio risk can be reduced significantly through diversification with a key role for renewables. Also for every given level of expected return and for each scenario, the natural gas and the oil have the maximum and minimum share in optimal portfolio, respectively. The studied problem is a non-linear optimization problem, and the GAMS and MATLAB software have been implemented to extract the final results
  5. Keywords:
  6. Portfolio theory ; Power industry policy-making ; Renewable energy resources ; Risk management
  7. Source: International Journal of Renewable Energy Research ; Volume 7, Issue 3 , 2017 , Pages 1426-1435 ; 13090127 (ISSN)
  8. URL: http://www.ijrer.org/ijrer/index.php/ijrer/article/view/5851