Energy transition and renewable energy investment strategy

Abstract

Energy transition means a shift away from an energy system largely based on fossil fuels toward an energy system dominated by renewable energy sources, like solar and wind, on a global scale. Therefore, the energy transition will require significant investments in renewable energy technologies across the globe. The purpose of this paper is to explore national strategy for renewable energy investment in the early phase of energy transition, specifically in the electricity generation sector. The paper focuses on three main topics. First, portfolio diversification effect with renewable energy expansion in electricity generation mix is analyzed with a balanced approach between average generation cost and the relevant risk of cost changes. Second, relationship between corporate ownership structure and renewable energy innovation is examined using the case of offshore wind, which is a fast-evolving technology that is projected to make a substantial contribution to future energy supply. Third, national offshore wind development strategy for late-mover countries is explored using a scenario-based economic cost-benefit analysis of multiple approaches to the development of offshore wind projects.