EARTH

[31001-12-02] Electricity Generating Resources Portfolio Optimization; Kenya’s Case.

○Newton Ojiambo Malala¹, Tsuyoshi Adachi¹ (1. Graduate School of International Resource Sciences, Akita University)

司会（Chairman）：Granata Giuseppe （Waseda University）, Richard Alorro (Curtin University)

キーワード：Renewable energy, Portfolio Optimization, Sustainable development, Energy Investment

Goal 7 of the post-2015 development goals drafted by the United Nations aims to ensure affordable, sustainable and reliable modern energy for all individuals by 2030.Nevertheless, the concern for the environment and increasing uncertainty over future supply of energy producing resources like oil complicates the matter, adding pressure on energy issues. Traditionally, generating cost has been the basis for selecting energy investments ignoring concerns like reliability and security. The perception that investing in renewable energies like wind and solar is more expensive does not help the situation. This paper contributes to the analysis of power generation portfolios, intended to create stable, affordable and secure power supply systems by considering risks and returns, with Kenya as a case study. The total power output in Kenya was 2299MW in 2014, mainly from hydro and geothermal sources, that accounted for over 67% of total power generated. With only 36% of Kenya’s population accessing electricity in 2014, demand will reach 18000 MW by 2030 when Kenya aspires to have universal electricity access.The gap necessitates the development of different generation sources if the energy system is to be affordable, reliable and secure.Kenya’s enormous potential in renewables and the significant demand-supply gap informs the choice of Kenya as a case study. Using Mean-Variance Portfolio Optimization approach, we develop an efficient frontier with different portfolios containing several generating technologies.Policymakers can choose which portfolios to invest in depending on their risk-cost preferences. The preliminary results show that increasing the share of renewable energy in the portfolio reduces system risk and cost, even though renewable energies have relatively higher costs when considered as stand-alone investments. Although the study covers only Kenya, experiences of other (developing) countries are similar. Therefore these countries can benefit from the outcome of this study.