Developing strategies for robust energy systems. I: Methodology

Abstract

Strategic energy planning is concerned with investments in energy technologies with long lead times and long life times. Of special interest are uncertainties about future developments that could lead to a major reappraisal of the cost-efficiency of different energy technologies. Decision making in this context is concerned, therefore, with finding a solution to the decision problem which is both low-cost and robust. Here, a method is described for using hedging to improve the robustness of the energy system. The method is applied using a standard energy systems model, MARKAL. It is shown how the model results can be used for a quantitative analysis of the robustness of the energy system. A study of the Swedish energy system is used as an example, where the uncertain factor is whether or not future restrictions on CO₂ emissions will be imposed.