The surprising role of risk in utility integrated resource planning

Awerbuch, Shimon

doi:10.1016/1040-6190(93)90048-p

Cited by 58 publications

(35 citation statements)

References 2 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…These analyses build -to some degree -off of recent analytic work by others (see, e.g., Elliot and Shipley 2005;Wiser and Bolinger 2006;Bolinger et al 2006;Awerbuch 1993Awerbuch , 2003, and often find that the risk-mitigation benefits of renewable energy are sizable. For example, the results of these analyses demonstrate that the value of renewable energy is especially great under scenarios of unexpectedly high natural gas and wholesale electricity prices.…”

Section: Repp 2001; Kammen Et Al 2004)mentioning

confidence: 99%

Weighing the costs and benefits of state renewables portfolio standards in the United States: A comparative analysis of state-level policy impact projections

Chen

Wiser

Mills

et al. 2009

Renewable and Sustainable Energy Reviews

View full text Add to dashboard Cite

Abstract:State renewables portfolio standards (RPS) have emerged as one of the most important policy drivers of renewable energy capacity expansion in the U.S. As RPS policies have been proposed or adopted in an increasing number of states, a growing number of studies have attempted to quantify the potential impacts of these policies, focusing primarily on cost impacts, but sometimes also estimating macroeconomic, risk reduction, and environmental effects. This article synthesizes and analyzes the results and methodologies of 31 distinct state or utility-level RPS cost-impact analyses completed since 1998. Together, these studies model proposed or adopted RPS policies in 20 different states. We highlight the key findings of these studies on the projected costs of state RPS policies, examine the sensitivity of projected costs to model assumptions, evaluate the reasonableness of key input assumptions, and suggest possible areas of improvement for future RPS analyses. We conclude that while there is considerable uncertainty in the study results, the majority of the studies project modest cost impacts. Seventy percent of the state RPS cost studies project retail electricity rate increases of no greater than one percent. Nonetheless, there is considerable room for improving the analytic methods, and therefore accuracy, of these estimates. IntroductionState renewables portfolio standards (RPS) have emerged as one of the most important policy drivers of renewable energy expansion in the United States (Wiser et al. 2007). Collectively, these state policies now apply to roughly 50% of U.S. electricity load, and hold the prospect of having substantial impacts on electricity markets, ratepayers, and local economies.Renewables portfolio standards require that a minimum amount of renewable energy is included in each retail electricity supplier's portfolio of electricity resources. They do so by establishing numeric targets for renewable energy supply, which generally increase over time. To date, 24 states in the U.S., along with the District of Columbia, have adopted such standards ( Figure 1).Often, the adoption of new RPS policies hinges on expected costs and benefits.As RPS policies have been proposed or adopted in an increasing number of states, a growing number of studies have attempted to quantify the potential impacts of these policies, focusing primarily on projecting cost impacts, but sometimes also estimating macroeconomic, risk reduction, and environmental effects.Given the role of these studies in motivating the adoption of state RPS policies, in this article we review 31 previous state RPS cost-benefit projections to compare forecasted impacts across studies. We summarize, in as consistent a fashion as possible, the results of these 31 cost-impact analyses, primarily focusing on the projected costs of state-and utility-level RPS programs. In so doing, we hope to illustrate the expected bounds of likely impacts. We also highlight and, in some cases, critique certain key assumptions used by these studies, with a ...

show abstract

Section: Repp 2001; Kammen Et Al 2004)mentioning

confidence: 99%

Weighing the costs and benefits of state renewables portfolio standards in the United States: A comparative analysis of state-level policy impact projections

Chen

Wiser

Mills

et al. 2009

Renewable and Sustainable Energy Reviews

View full text Add to dashboard Cite

show abstract

“…Portfolio theory is sometimes referred to as modern portfolio theory (model), Markowitz model (theory), mean-variance model (theory), and portfolio optimisation theory (model) (Skarica & Lukac, 2012). PT has been used in other countries to evaluate electricity-generation portfolios and this is discussed in Bar-Levy and Katz (1976), Awerbuch (1993), (Awerbuch & Berger (2003), Beltran (2009), Krey and Zweifel (2006), Zhu and Fan (2010), and Cunha and Ferreira (2014). Markowitz (1959) defined a good financial portfolio as more than just a long list of financial securities and bonds, a balanced whole that provides the investor with protection and opportunities with respect to a wide range of contingencies.…”

Section: Portfolio Theorymentioning

confidence: 99%

Assessing the Costs and Risks of the South African Electricity Portfolio: A Portfolio Theory Approach

Bashe

Shuma-Iwisi

Wyk

2016

J. energy South. Afr.

View full text Add to dashboard Cite

show abstract

“…A brief review of prior approaches to account for the price stability benefit of renewable energy Awerbuch (1994Awerbuch ( , 1993 proposed the use of risk-adjusted discount rates to inflate less-predictable expensese.g., natural gas fuel costs-within discounted cash flow models. This practice requires use of the Capital Asset Pricing Model ("CAPM")-borrowed from the financial sector-to adjust the risk-free discount rate based on the "beta," or correlation, of the expense in question with other costs.…”

mentioning

confidence: 99%

Using Probability of Exceedance to Compare the Resource Risk of Renewable and Gas-Fired Generation

Bolinger

2017

View full text Add to dashboard Cite

The surprising role of risk in utility integrated resource planning

Cited by 58 publications

References 2 publications

Weighing the costs and benefits of state renewables portfolio standards in the United States: A comparative analysis of state-level policy impact projections

Weighing the costs and benefits of state renewables portfolio standards in the United States: A comparative analysis of state-level policy impact projections

Assessing the Costs and Risks of the South African Electricity Portfolio: A Portfolio Theory Approach

Using Probability of Exceedance to Compare the Resource Risk of Renewable and Gas-Fired Generation

Contact Info

Product

Resources

About