The Role of Renewables in Hedging against Future Electricity Industry Uncertainties and Addressing Energy Security Concerns
The electricity industry in many countries faces unprecedented uncertainty on many fronts such that uncertainty is now the only certainty. Key factors contributing to the industry costs are highly uncertain, particularly in three key areas: fossil-fuel prices, electricity demand growth and energy and climate policies. Uncertainties in fossil-fuel prices also have significant implications for energy security given the considerable reliance on fossil fuels, particularly coal and gas, for generation in many electricity industries around the world.These multiple sources of uncertainty create significant challenges for planning investment decisions in long-lived electricity infrastructure over coming decades.
With such a high degree of uncertainty, it is becoming important that decision making takes into account the wide range of possible future that may eventuate and the potential risks associated with a particular investment and policy decision. Renewable generation options, particular solar and wind, can play an important role in addressing long-term energy concerns by mitigating potential extreme electricity prices caused by uncertain fossil-fuel and carbon prices, and reducing physical supply risk through fuel diversification.
This presentation is based on our recent modelling study on the value of renewable generation within future generation portfolios in addressing energy security concerns and mitigating the impacts of uncertainty in future fossil-fuel prices, carbon pricing policies, electricity demand and hence overall electricity costs in the Australian National Electricity Market (NEM).
Dr Peerapat Vithayasrichareon is a Research Fellow at Centre for Energy Environmental Markets (CEEM) and School of Electrical Engineering and Telecommunications with the University of New South Wales, Sydney, Australia, where he also completed his PhD in 2012. Peerapat currently leads a project which is being funded by the Australian Renewable Energy Agency (ARENA) to explore generation investment and policy support frameworks for facilitating high penetration of renewable energy in Australia’s electricity industry.
This research project employs a quantitative generation portfolio modelling tool developed during his PhD. Peerapat has several years of industry and research experience in the energy sector. Prior to his PhD, he was an engineer at the National Load Dispatch Center at Electricity Generating Authority of Thailand. He also holds a Master degree in Energy Economics and Planning from Asian Institute of Technology and Bachelor of Electrical Engineering from the University of Melbourne. His research interests include electricity generation investment and planning under uncertainty, renewable energy integration, energy economics and policy and sustainability in the energy industry.