A New Finance-based Portfolio Analysis Framework for Sustainable Energy Planning

摘要

Traditionally, energy resource planning sought minimizing the cost of energy supply portfolios. With the increasing greenhouse gas emissions, emissions reduction has also received attention in energy planning. Nevertheless, the unintended consequences of energy production processes, especially the impacts on water resources and land use are still largely ignored. In addition, energy planning hardly considers the true value of ecosystem resources and services exhausted for energy production. This paper proposes a new framework based on a finance theory, Modern Portfolio Theory (MPT), for analyzing the overall resource use efficiency of different energy mixes for different risk of return levels. The suggested finance-based resource use efficiency evaluation method can help maximize energy portfolio expected efficiency (overall efficiency with respect to cost, carbon footprint, water footprint, and land footprint) for a given amount of portfolio risk, or equivalently minimize risk for a given level of expected efficiency, by revising the energy mix. Evaluation of current and projected global energy portfolios based on the this method suggests that the overall resource use efficiency of global portfolios can be increased by 100% with the same risk level by careful revision of the proportions of the energy supply from different sources in the overall global energy portfolios.