Moritoshi Kato and Yicheng Zhou
Power system planning, generation mix, portfolio theory, CO2 emission
This paper presents a novel method to analyse the optimal gener- ation mix in Japan with consideration of risks and environmental measures. The proposed method is based on the portfolio theory which relates the expected portfolio return to the total portfolio risk defined as the standard deviation of the return. The portfolio theory is integrated with the screening curve analysis in order that electricity generation matches with a load curve. Besides, we define a rate of return as net cash flow per capital investment of a power generation plant to easily calculate the generation capacity mix. Environmental measures are evaluated through restrictions of CO2 emissions, which are indicated by CO2 price. Finally, we obtain the following results through numerical analysis. Nuclear power is partly replaced by coal thermal power if the variance of its generation is large. Integrated coal gasification combined cycle (IGCC) precedes ultra supercritical pulverized coal-fired power (USC) owing to its better thermal efficiency. However, if CO2 price is high, IGCC is replaced by carbon dioxide capture and storage unit (CCS). Renew- able energy (RE) is more likely to be selected, if its construction cost is reduced, owing to its advantage of neither fuel price risk nor CO2 price risk.
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