Risk-averse portfolio selection of renewable electricity generator investments in Brazil: An optimised multi-market commercialisation strategy

Investment decisions in renewable energy sources such as small hydro, wind power, biomass and solar are frequently made in the context of enormous uncertainty surrounding both intermittent generation and the highly volatile electricity spot prices that are used for clearing of trades. This paper presents a new portfolio-based approach for selecting long-term investments in small-scale renewable energy projects and matching contracts for the sale of the resulting electricity. Using this approach, we have formulated a stochastic optimisation model that maximises a holding company's risk-averse measure of value. Using an illustrative example representative of investment decisions within the Brazilian electricity system, we investigate the sensitivity of the optimised portfolio composition and commercialisation strategy to contract prices in the free contracting environment and to the decision maker's attitude towards risk. The numerical results demonstrate it is possible to reduce significantly financial risks, such as the price-quantity risk, not only by exploiting the complementarity of the considered renewable sources generation profiles, but also by selecting the optimal mix of commercialisation contracts from different markets. We find that the multi-market strategy generally results in appreciably higher optimal value than single-market strategies and can be applied to a wide range of renewable generators and contracts

A Land System Science meta-analysis suggests we underestimate intensive land uses in land use change dynamics

A meta-analysis of the Land System Science literature identified that small-scale land uses currently receive little attention in studies seeking to understand land use change dynamics. We conceptualised two ways in which small-scale land uses operate to indirectly drive more extensive land use change: (1) through modifying spatial landscape attributes and (2) through altering underlying forces driving the expansion of other land uses. We then propose the concept of ‘intensive land uses’, those that occupy a small proportion of the landscape but indirectly drive land use change dynamics through their operation. Our discussion highlights that, with the exception of roads, we currently underestimate the importance of intensive land uses in the literature and we illustrate this with a case study of a commonly disregarded intensive land use: mining. We conclude that the inclusion or exclusion of land uses from analyses should extend beyond quantifying their land use area and instead incorporate an understanding of how land uses operate within their regional context. Finally, we present three future research opportunities to incorporate intensive land uses into analyses and models of land use change dynamics