A Study on the Optimal Generation Mix Based on Portfolio Theory with Considering the Basic Condition for Power Supply

This paper presents a novel method to analyze the optimal generation mix based on portfolio theory with considering the basic condition for power supply, which means that electricity generation corresponds with load curve. The optimization of portfolio is integrated with the calculation of a capacity factor of each generation in order to satisfy the basic condition for power supply. Besides, each generation is considered to be an asset, and risks of the generation asset both in its operation period and construction period are considered. Environmental measures are evaluated through restriction of CO2 emissions, which are indicated by CO2 price. Numerical examples show the optimal generation mix according to risks such as the deviation of capacity factor of nuclear power or restriction of CO2 emissions, the possibility of introduction of clean coal technology (IGCC, CCS) or renewable energy, and so on. The results of this work will be possibly applied as setting the target of the generation mix for the future according to prospects of risks of each generation and restrictions of CO2 emissions.