Investment decisions in the industrial firm's generation expansion problem
Matthias Ondra  1@  , Thomas Dangl  1@  
1 : Vienna University of Technology

This paper presents an extension of a probabilistic modeling approach to the generation expansion problem including renewable energy sources, where a probabilistic constraint on the supply-demand constraint is imposed. In this setting, the energy manager decides upon installed capacities and does not consider the worst case scenarios which are not in the scope of the probabilistic bound. We extend this model, by penalizing the worst case scenarios in which a power shortfall occurs. These additional payments, which come as the expected costs of a short power supply can be interpreted using techniques of risk management via the conditional value-at-risk and effect the energy manager's investment decision who evaluates riskiness of power supply.This corresponds to the situation, where the energy manager balances supply and demand in the worst scenarios at the electricity wholesale market. We investigate the energy manager's investment policy in renewable energy technologies in a deterministic price scenario, corresponding to consuming balancing energy via a fixed-price contract and a stochastic price scenario, corresponding to procuring residual power at the spot market. The application to a use case without a feed-in-tariff quantifies the threshold energy price of a fixed-price contract below which the energy manager is reluctant to invest in renewable energy technologies. Energy managers who purchase power at the spot market, where the spot price and the energy park's power output are independent, increase investment in renewable technologies with increasing spot price uncertainty to hedge against spot price volatility.


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