Climate change and renewable energy portfolios

Abstract

The UK has a commitment to reduce greenhouse gases by at least 80% from 1990 levels by 2050. This will see the proportion of energy generated in the UK from renewable resources such as wind, solar, marine and bio-fuels is increasing and likely to dominate the future energy market over the next few decades. However, it is unclear what effect future physical climate changes could have on the long term average energy output characteristics of individual renewable energy technologies that may dominate the low carbon energy technologies. It is also unclear how these changes to individual technologies will affect a diverse portfolio of electricity generation technologies. This thesis explores the influence of climate change on renewable electricity generation portfolios and energy security in the UK, with the aim of determining if climate change will affect renewable energy resource in such a way that may leave future low carbon generation portfolios sub-optimal. The research allows long term renewable resource variability to be reflected within models of the costs and risks associated with different electricity generation technologies and using Mean Variance Portfolio Theory (MVPT), it explores the influence of climate change on renewable energy portfolios and energy security in the UK. The scope of this study has a considerable range spanning from renewable resources through to the sensitivity of an optimal portfolio mix of generation technologies to climate change. In brief, the objectives were as follows: Characterise the variability of renewable energy resources and electricity generation output from renewable technology in the UK, in particular solar PV, on and offshore wind, for future climate scenarios for the 2050s and 2080s. Characterise the variability of electricity generation costs and explore the effect of climate change scenarios on generation costs and risk by examining the cost-risk balance of current and potential future low carbon electricity generation technology portfolios. The outcome saw distinctive changes in solar, wind, wave and hydro resource. The changes were largely negative, except in the case of solar, which increased. Levelised costs decreased for solar PV but increased for the technologies with negative resource changes. Evident changes in optimal portfolio mixes were observed and explored.