Date of Award

5-2024

Degree Type

Masters Thesis

Degree Name

Master of Science (MS)

School

Mathematics and Natural Sciences

Committee Chair

Haiyan Tian

Committee Chair School

Mathematics and Natural Sciences

Committee Member 2

Huiqing Zhu

Committee Member 2 School

Mathematics and Natural Sciences

Committee Member 3

John Harris

Committee Member 3 School

Mathematics and Natural Sciences

Abstract

In this work, we study the use of modern portfolio theory in a cost-risk analysis of the Electric Reliability Council of Texas (ERCOT). Based upon the risk-return concepts of modern portfolio theory, we develop an n-asset minimization problem to create a risk-cost frontier of portfolios of technologies within the ERCOT electricity region. The levelized cost of electricity for each technology in the region is a step in evaluating the expected cost of the portfolio, and the historical data of cost factors estimate the variance of cost for each technology. In addition, there are several constraints in our minimization problem to account for real-world limitations. Using certain scenario data given by the National Renewable Energy Laboratory (NREL) and ERCOT, we analyze the efficient frontier of technology mixes for risk reduction of cost.

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