Portfolio Benefit Analysis: Updated methods to include wind, solar and hydro projects

mike-optis-200-x-200In this webinar, join Mike Optis, Research Scientist at AWS Truepower, as he describes our approach to renewable energy portfolio benefit analysis. In particular, he will highlight the importance of project diversity in the portfolio, the association between project diversity and reduced portfolio uncertainty, and the methods used to evaluate portfolio benefit.

The expected probabilities of exceedance (P50, P90, etc.) for a renewable energy portfolio are typically assumed to be the sum of the probability of exceedances of individual projects. This approach is in fact conservative and tends to underestimate these values (i.e. tends to overestimate portfolio uncertainty). Specifically, this approach does not account for the extent to which uncertainties between projects are correlated. In general, more diverse projects tend to have more uncorrelated uncertainties, while similar projects tend to have more correlated uncertainties. Our approach to assessing portfolio benefit begins by taking into account a range of factors to assess project diversity and then determining the associated correlation between project uncertainties. These data are input to a statistical simulation to estimate the portfolio probabilities of exceedance and associated portfolio uncertainty. The difference in probabilities of exceedances calculated from the statistical simulation compared to the typical approach (i.e. sum of individual projects) defines the portfolio benefit.