Risks, revenues and investment in electricity generation: Why policy needs to look beyond costs

Groß, Robert; Blyth, William; Heptonstall, Philip

doi:10.1016/j.eneco.2009.09.017

Cited by 147 publications

(73 citation statements)

References 10 publications

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“…This technology accounting approach has been used by policymakers to determine the relative investment options available for different technologies. As outlined in this paper, the LCOE considers the lifetime generated energy and costs to determine the price of electricity per unit energy generated (£/MWh).The assessment of the levelised cost of electricity (LCOE) for any given technologies is framed by a set of assumptions on a wide range of variables, such as capital cost, construction times, the expected plant life, operational and maintenance costs, fuel costs, plant availability, load factor and discount rate [23]. For the LCOE analysis adopted in this study, the stream of future costs and generation outputs are discounted by 10% to the present value taking into account the time value of money.…”

Section: Levelised Cost Of Energymentioning

confidence: 99%

Developing an optimal electricity generation mix for the UK 2050 future

Sithole

Cockerill

Hughes

et al. 2016

Energy

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The UK electricity sector is undergoing a transition driven by Climate Change policies and envir onmental policies from Europe. Aging electricity generating infrastructure is set to affect capacity margins after 2015.These developments, coupled with the increased proportion of inflexible and variable generation technologies will impact on the security of electricity supply. Investment in low-carbon technologies is central to UK meeting its energy policy objectives. The complexity of these challenges over the future development of the UK electricity sector has motivated this study which aims to develop a policy-informed electricity generation scenario to assess the sector's transition to 2050. The study analyses the level of deployment of electricity generating technologies in line with the 80% by 2050 emission target. This is achieved by using an excel-based "Energy Optimisation Calculator" which captures the interaction of various inputs to produce a least cost generation mix. The key results focus on the least cost electricity generation portfolio, emission intensity, and total investment required to assemble a sustainable electricity generation mix. A carbon neutral electricity sector is feasible if low-carbon technologies are deployed on a large scale. This requires a robust policy framework that supports the development and deployment of mature and emerging technologies.

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Section: Levelised Cost Of Energymentioning

confidence: 99%

Developing an optimal electricity generation mix for the UK 2050 future

Sithole

Cockerill

Hughes

et al. 2016

Energy

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“…Fleten et al, 2007;Kangas et al, 2011) and who make their investment decisions based on comparisons between different electricity production plants (cf. Awerbuch, 2000;Fleten et al, 2007;Gross et al, 2010;Koo et al, 2011;Neuhoff et al, 2008;Pettersson and Söderholm, 2009;Söderholm et al, 2007). Investors are assumed to have economic motives, to be able to choose freely among different types of plants (e.g.…”

Section: Introductionmentioning

confidence: 99%

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Bergek¹,

Mignon²,

Sundberg³

2013

Energy Policy

135

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Tranforming energy systems to fulfill the needs of a low-carbon economy requires large investments in renewable electricity production (RES-E). Recent literature underlines the need to take a closer look at the composition of the RES-E investor group in order to understand the motives and investment processes of different types of investors. However, existing energy policies generally consider RES-E investments made on a regional or national level, and target investors who evaluate their RES-E investments according to least-cost high-profit criteria. We present empirical evidence to show that RES-E investments are made by a heterogeneous group of investors, that a variety of investors exist and that their formation varies among the different types of renewable sources. This has direct implications for our understanding of the investment process in RES-E and for the study of motives and driving forces of RES-E investors. We introduce a multi-dimensional framework for analyzing differences between categories of investors, which not only considers to the standard economic dimension which is predominant in the contemporary energy literature, but also considers the entrepreneurship, innovation-adoption and institutional dimensions. The framework emphasizes the influence of four main investor-related factors on the investment process which should be studied in future research: motives, background, resources and personal characteristics.

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“…For both systems, classical economic theory describes investment decisions as a purely rational economic action that is determined by economic factors and determinants such as for example price volatility [12,13], risks [14,15], costs [16][17][18][19], etc., sometimes considering also regulatory and political aspects [20]. Some studies also take the behavior of market actors into account especially those analyzing the strategic interests of power companies as well as the changing objectives and interests following market liberalization [21].…”

Section: The Market As An Efficiency Maximizermentioning

confidence: 99%

Security of Supply in European Electricity Markets—Determinants of Investment Decisions and the European Energy Union

et al. 2015

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Abstract:The European Union and its Member States are seeking to decarbonize their energy systems, including the electricity sector and, at the same time, pursue market integration. However, renewable energy (RE) deployment and the liberalization of the energy-only market have raised concerns at the national level about the security of electricity supplies in the future. Some actors consider the lack of sufficient investments in generation capacities a threat to supply security. As a consequence, it was proposed that capacity markets solve these problems. The underlying assumption is that the market design is the only determining factor for investments in security of supply options. In this article, we question this narrow view and identify further determinants of the investment decisions of electricity market participants. Based on the insights of institutional sociology and economics, we understand the market to be a social institution that structures the behavioural expectations of market participants. Derived from the theoretical conceptualization and based on qualitative literature review and own work, we find four determinants for investment behaviour beyond the formal market design: Material opportunities, strategic actor behavior and identity, focusing events and discursive expectations about the future. With this perspective, we discuss the introduction of a European Energy Union as a possible tool that might have a great impact on the more informal determinants such as expectations about the future and the construction of a European energy narrative. OPEN ACCESSEnergies 2015, 8 5199

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Risks, revenues and investment in electricity generation: Why policy needs to look beyond costs

Cited by 147 publications

References 10 publications

Developing an optimal electricity generation mix for the UK 2050 future

Developing an optimal electricity generation mix for the UK 2050 future

Who invests in renewable electricity production? Empirical evidence and suggestions for further research

Security of Supply in European Electricity Markets—Determinants of Investment Decisions and the European Energy Union

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