Energy sector portfolio analysis with uncertainty
Abstract
Governments are dealing with the challenge of how to efficiently invest in research and development portfolios related to energy technologies. Research and development investment decisions in the energy space are especially difficult due to numerous risks and uncertainties, and due to the complexity of energy's interactions with the broad economy. Historically, much of the U.S. Department of Energy's in-depth research and development analyses focused on assessing the impact of a research and development activity in isolation from other available opportunities and did not substantially consider risk and uncertainty. Endeavoring to combine integrated energy-economy modeling with uncertainty analysis and technology-specific research and development activities, the U.S. Department of Energy commissioned the development of the Stochastic Energy Deployment System to support and improve public energy research and development decision-making. The Stochastic Energy Deployment System draws from expert-elicited probability distributions for research and development-driven improvements in technology cost and performance, and it uses Monte Carlo simulations to evaluate the likelihood of outcomes within a system dynamics energy-economy model. The framework estimates the uncertain benefits and costs of various research and development portfolios and provides insight into the probability of meeting national technology goals, while accounting for interactions with the larger economy and formore »
- Authors:
-
[2];
[2];
- Lumina Decision Systems, Los Gatos, CA (United States)
- National Renewable Energy Lab. (NREL), Golden, CO (United States)
- US Department of Energy (USDOE), Washington DC (United States)
- Publication Date:
- Research Org.:
- National Renewable Energy Lab. (NREL), Golden, CO (United States)
- Sponsoring Org.:
- USDOE Office of Energy Efficiency and Renewable Energy (EERE), Strategic Programs (EE-SP)
- OSTI Identifier:
- 1828146
- Report Number(s):
- NREL/JA-6A20-78746
Journal ID: ISSN 0306-2619; MainId:32663;UUID:d7baf4c3-6832-4de2-b8df-4a0d58b136db;MainAdminID:63246
- Grant/Contract Number:
- AC36-08GO28308
- Resource Type:
- Accepted Manuscript
- Journal Name:
- Applied Energy
- Additional Journal Information:
- Journal Volume: 306; Journal Issue: Part A; Journal ID: ISSN 0306-2619
- Publisher:
- Elsevier
- Country of Publication:
- United States
- Language:
- English
- Subject:
- 29 ENERGY PLANNING, POLICY, AND ECONOMY; energy system; expert elicitation; portfolio analysis; Stochastic Energy Deployment System; stochasticity; uncertainty
Citation Formats
Milford, James, Henrion, Max, Hunter, Chad, Newes, Emily, Hughes, Caroline, and Baldwin, Samuel F. Energy sector portfolio analysis with uncertainty. United States: N. p., 2021.
Web. doi:10.1016/j.apenergy.2021.117926.
Milford, James, Henrion, Max, Hunter, Chad, Newes, Emily, Hughes, Caroline, & Baldwin, Samuel F. Energy sector portfolio analysis with uncertainty. United States. https://doi.org/10.1016/j.apenergy.2021.117926
Milford, James, Henrion, Max, Hunter, Chad, Newes, Emily, Hughes, Caroline, and Baldwin, Samuel F. Sat .
"Energy sector portfolio analysis with uncertainty". United States. https://doi.org/10.1016/j.apenergy.2021.117926. https://www.osti.gov/servlets/purl/1828146.
@article{osti_1828146,
title = {Energy sector portfolio analysis with uncertainty},
author = {Milford, James and Henrion, Max and Hunter, Chad and Newes, Emily and Hughes, Caroline and Baldwin, Samuel F.},
abstractNote = {Governments are dealing with the challenge of how to efficiently invest in research and development portfolios related to energy technologies. Research and development investment decisions in the energy space are especially difficult due to numerous risks and uncertainties, and due to the complexity of energy's interactions with the broad economy. Historically, much of the U.S. Department of Energy's in-depth research and development analyses focused on assessing the impact of a research and development activity in isolation from other available opportunities and did not substantially consider risk and uncertainty. Endeavoring to combine integrated energy-economy modeling with uncertainty analysis and technology-specific research and development activities, the U.S. Department of Energy commissioned the development of the Stochastic Energy Deployment System to support and improve public energy research and development decision-making. The Stochastic Energy Deployment System draws from expert-elicited probability distributions for research and development-driven improvements in technology cost and performance, and it uses Monte Carlo simulations to evaluate the likelihood of outcomes within a system dynamics energy-economy model. The framework estimates the uncertain benefits and costs of various research and development portfolios and provides insight into the probability of meeting national technology goals, while accounting for interactions with the larger economy and for interactions among research and development investments spanning many energy sectors.},
doi = {10.1016/j.apenergy.2021.117926},
journal = {Applied Energy},
number = Part A,
volume = 306,
place = {United States},
year = {2021},
month = {10}
}
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