| ID | 111349 |
| Title Proper | Critical mid-term uncertainties in long-term decarbonisation pathways |
| Language | ENG |
| Author | Usher, Will ; Strachan, Neil |
| Publication | 2012. |
| Summary / Abstract (Note) | Over the next decade, large energy investments are required in the UK to meet growing energy service demands and legally binding emission targets under a pioneering policy agenda. These are necessary despite deep mid-term (2025-2030) uncertainties over which national policy makers have little control. We investigate the effect of two critical mid-term uncertainties on optimal near-term investment decisions using a two-stage stochastic energy system model.
The results show that where future fossil fuel prices are uncertain: (i) the near term hedging strategy to 2030 differs from any one deterministic fuel price scenario and is structurally dissimilar to a simple 'average' of the deterministic scenarios, and (ii) multiple recourse strategies from 2030 are perturbed by path dependencies caused by hedging investments. Evaluating the uncertainty under a decarbonisation agenda shows that fossil fuel price uncertainty is very expensive at around £20 billion. The addition of novel mitigation options reduces the value of fossil fuel price uncertainty to £11 billion. Uncertain biomass import availability shows a much lower value of uncertainty at £300 million.
This paper reveals the complex relationship between the flexibility of the energy system and mitigating the costs of uncertainty due to the path-dependencies caused by the long-life times of both infrastructures and generation technologies. |
| `In' analytical Note | Energy Policy Vol. 41; Feb 2012: p.433-444 |
| Journal Source | Energy Policy Vol. 41; Feb 2012: p.433-444 |
| Key Words | Energy System Modelling ; Uncertainty ; Stochastic Programming |