Investment in Stochastic Electricity-Production Facilities

Chapter
First Online:
Part of the International Series in Operations Research & Management Science book series (ISOR, volume 199)

Abstract

This chapter considers a profit-oriented private investor interested in building stochastic electricity-production facilities, such as solar and wind power plants. This investor sells its production in a competitive pool-based electricity market and faces uncertainties related to demand growth, its production level, and its investment cost. Adopting a multistage approach, a stochastic complementarity model is formulated to determine the optimal capacity to be built by the investor to maximize its expected profit while minimizing its profit volatility. An example considering a wind power investor is presented to illustrate the working of the proposed model.

Keywords

Wind Power Planning Horizon Investment Cost Expected Profit Demand Growth 
These keywords were added by machine and not by the authors. This process is experimental and the keywords may be updated as the learning algorithm improves.
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Copyright information

© Springer Science+Business Media New York 2013

Authors and Affiliations

  1. 1.University of Castilla-La ManchaCiudad RealSpain

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