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ECN publication
Portfolio analysis of the future Dutch generating mix
Published by: Publication date:
ECN Policy Studies 10-11-2008
ECN report number: Document type:
ECN-B--08-014 Book
Number of pages: Full text:
23 Download PDF  

Published in: Analytical Methods for Energy Diversity and Security, 117, 139, 978-0-08-056887-4, Elsevier.

This chapter presents results of an application of Markowitz Portfolio Theory (MPT) to the future portfolio of electricity generating technologies in the Netherlands in the year 2030. Projections of two base-case generating mixes and general scenario assumptions have been taken from two specific scenarios designed by the Dutch Central Planning Office, i.e. ‘Strong Europe’(SE) and ‘Global Economy’ (GE). This chapter focuses on the electricity cost–risk dimension of the Dutch portfolio of generating technologies and the potential for additional deployment of renewable generating technologies to enhance the effi ciency of base-case generating mixes in year 2030. The major results of this study are as follows. (1) In both scenarios, the base-case generating mix is not very effi cient. Graphical analysis suggests that diversification may yield up to 20% risk reduction at no extra cost. (2) Promotion of renewable energy can greatly decrease the portfolio risk. Defining mixes without renewables results in signifi cantly riskier mixes with relatively small impact on portfolio costs. (3) Because of its relative low risk and high potential, large-scale implementation of offshore wind can reduce cost risk of the Dutch generating portfolio. Only in the GE scenario is a (small) upward effect on the expected Dutch electricity cost in year 2030 foreseen. In an SE world large-scale implementation of offshore wind is projected to have a downward effect on Dutch electricity prices in 2030.

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