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Title: Integrating renewable energy technologies in the electric supply industry: A risk management approach

Abstract

Regulatory and technical forces are causing electric utilities to move from a natural monopoly to a more competitive environment. Associated with this movement is an increasing concern about how to manage the risks associated with the electric supply business. One approach to managing risks is to purchase financial instruments such as options and futures contracts. Another approach is to own physical assets that have low risk attributes or characteristics. This research evaluates how investments in renewable energy technologies can mitigate risks in the electric supply industry. It identifies risks that are known to be of concern to utilities and other power producers. These risks include uncertainty in fuel prices, demand, environmental regulations, capital cost, supply, and market structure. The research then determines how investments in renewables can mitigate these risks. Methods are developed to calculate the value of renewables in terms of their attributes of fuel costs, environmental costs, lead-time, modularity, availability, initial capital costs, and investment reversibility. Examples illustrate how to apply the methods.

Authors:
 [1]
  1. Pacific Energy Group, Walnut Creek, CA (United States)
Publication Date:
Research Org.:
National Renewable Energy Lab. (NREL), Golden, CO (United States)
Sponsoring Org.:
USDOE Assistant Secretary for Energy Efficiency and Renewable Energy, Washington, DC (United States)
OSTI Identifier:
572737
Report Number(s):
NREL/SR-520-23089
ON: DE98004342; TRN: 98:001358
DOE Contract Number:  
AC36-83CH10093
Resource Type:
Technical Report
Resource Relation:
Other Information: PBD: Jul 1997
Country of Publication:
United States
Language:
English
Subject:
29 ENERGY PLANNING AND POLICY; ELECTRIC POWER INDUSTRY; RENEWABLE ENERGY SOURCES; COMPETITION; RISK ASSESSMENT; REGULATIONS; CAPITALIZED COST; PRICES

Citation Formats

Hoff, T E. Integrating renewable energy technologies in the electric supply industry: A risk management approach. United States: N. p., 1997. Web. doi:10.2172/572737.
Hoff, T E. Integrating renewable energy technologies in the electric supply industry: A risk management approach. United States. https://doi.org/10.2172/572737
Hoff, T E. 1997. "Integrating renewable energy technologies in the electric supply industry: A risk management approach". United States. https://doi.org/10.2172/572737. https://www.osti.gov/servlets/purl/572737.
@article{osti_572737,
title = {Integrating renewable energy technologies in the electric supply industry: A risk management approach},
author = {Hoff, T E},
abstractNote = {Regulatory and technical forces are causing electric utilities to move from a natural monopoly to a more competitive environment. Associated with this movement is an increasing concern about how to manage the risks associated with the electric supply business. One approach to managing risks is to purchase financial instruments such as options and futures contracts. Another approach is to own physical assets that have low risk attributes or characteristics. This research evaluates how investments in renewable energy technologies can mitigate risks in the electric supply industry. It identifies risks that are known to be of concern to utilities and other power producers. These risks include uncertainty in fuel prices, demand, environmental regulations, capital cost, supply, and market structure. The research then determines how investments in renewables can mitigate these risks. Methods are developed to calculate the value of renewables in terms of their attributes of fuel costs, environmental costs, lead-time, modularity, availability, initial capital costs, and investment reversibility. Examples illustrate how to apply the methods.},
doi = {10.2172/572737},
url = {https://www.osti.gov/biblio/572737}, journal = {},
number = ,
volume = ,
place = {United States},
year = {Tue Jul 01 00:00:00 EDT 1997},
month = {Tue Jul 01 00:00:00 EDT 1997}
}