Institutional uncertainty and its effect on electricity supply choices for fringe of grid consumers

Abstract

This paper explores institutional issues and, using a planning methodology able to incorporate risk and uncertainty, explores the affect of these issues on the determination of least cost planning solutions. Energy supply options for remote and fringe of grid consumers in New South Wales (NSW), Australia include grid connection, where the cost of connection is paid by the consumer and Remote Area Power Supply (RAPS) systems which may be bought or leased from a RAPS supplier. The methodology exposes these candidate supply options to a large set of scenarios which incorporate the decision maker’s view of the future in respect of institutional, demand and technological uncertainty. The resulting distribution of economic and performance outcomes can aid the decision maker to take risk sensitive decisions. Case study examples incorporating effects of institutional uncertainty suggest that RAPS systems are adaptable and risk-adverse energy supply options.