Practice Summaries: An Optimization Model to Support Renewable Energy Investment Decisions

A majority of states in the United States have instituted renewable portfolio standards (RPS), which require electric service providers to meet a portion of their demand using renewable energy resources. These requirements, along with state and federal incentives, are the main drivers for the construction of utility-scale renewable energy plants in the United States. In order to help understand the implications of the state RPS system for future renewable energy investments, we developed an analytical tool that General Electric Company uses to better price its renewable energy deals and forecast market demand for its renewable energy products.