In recent years, it has become increasingly popular to take financial risk considerations explicitly into account when deciding about long-term investments in power supply systems. Sensitivity analysis including risk assessment in electricity planning, however, typically does not incorporate portfolio risk and thus cannot replicate the profit/risk or cost/risk relationships. In this context, it makes sense to adopt techniques from finance theory, in particular Mean-Variance Portfolio Theory, which allows investors to create low risk and high return portfolios under various, not only economic criteria, but also technical and social aspects.
The students are able to:
· … learn the basics of Mean-Variance Portfolio Theory
· … learn about the economics of power plants
· … apply mean-variance portfolio theory to real-world assets from the energy sector (power plants)
