Renewable energy portfolio planning using the cross-entropy method

Abstract

The study presents a method for renewable energy portfolio planning through a Monte-Carlo optimization approach called the Cross Entropy method. Renewable energy portfolio planning is applied to the Philippine setting by considering multiple factors composed of economic and environmental metrics such as capital and production costs, and the corresponding cost for emissions. Policy mechanisms such as the Renewable Portfolio Standard (RPS) and carbon-cap are policy mechanisms that can also be incorporated in the model. For various scenarios of the economic and environmental factors and policy mechanisms, the study yielded the corresponding optimum investment and operation schedules for the planned generating plants.