Hedging uncertainty in energy efficiency strategies: a minimax regret analysis
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Hedging uncertainty in energy efficiency strategies: a minimax regret analysis Georgios P. Trachanas1 · Aikaterini Forouli1 · Nikolaos Gkonis1 · Haris Doukas1
Received: 20 October 2017 / Revised: 21 May 2018 / Accepted: 23 May 2018 © Springer-Verlag GmbH Germany, part of Springer Nature 2018
Abstract A global consensus is growing around the fact that energy efficiency is an effective way to meet the new climate goals. Energy efficiency, forming a hidden giant solution, has been proven more impactful than any other greenhouse gas emissions plan. However, all the energy related processes and the associated factors are fraught with multiple forms of uncertainties and complexities. Hedging against uncertainty, in the present paper we use minimax regret analysis to identify robust strategies towards energy efficiency. Expressing uncertainty through discrete scenarios, we apply robust optimization to meet the optimal mix of energy efficiency measures, performing well, independently of any scenario’s realization, taking into account the employment factor. In particular, we apply the maximin, as well as the minimax regret criterion, to solve the linear stochastic mathematical program. Moreover, a numerical computation on the improvement of the energy efficiency in different sectors is presented. Keywords Decision support · Strategy · Minimax regret · Uncertainty · Energy efficiency · Employment
1 Introduction The growth in global energy demand is projected to rise sharply over the coming years (U.S. Energy Information Administration 2017). The continually increasing demand for energy has led to the rapid increment in the exploitation of conventional * Georgios P. Trachanas [email protected] 1
Decision Support Systems Laboratory (EPU‑NTUA), School of Electrical and Computer Engineering, National Technical University of Athens, 9 Heroon Polytechniou Str, Zografou Campus, 15780 Athens, Greece
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energy resources (Asif and Muneer 2007). Uncontrolled use of fossil fuels is going to face multiple challenges in the near future, in particular, environmental degradation (global warming, air pollution), depletion of fossil fuels and fuel price rise. This unsustainable situation is going to worsen rapidly in next years, as it seems that the present employed energy systems will be unable to handle the future energy requirements. It is true that various solutions have been proposed regarding the environmental aspect. However, the key question of how to decouple economic growth and energy use from environmental degradation is still not completely answered. To answer this, scientists along with policy makers move towards the so-called energy efficiency policies. Energy efficiency may be achieved through well-targeted and explicitly determined management, the enhancement of modern technologies and the adopting of mitigation policies by the decision makers. Energy efficiency policies can be proven beneficial in terms of sustainable development, by decreasing the high level of unemployment which
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