A Formulate of Problem of Seeking an Optimum Investment Strategy in Power Engineering

Abstract

The applied energy technology and its technical solution is decisive for the value of an investment (J₀) for building an energy source (generally it can be a source of electric energy and heat). So it determines the amount of financial costs (F) and loan installment (R) in its annual activity costs in successive years (t = 1, 2, …N) together with energy carriers prices and specific charges for emitting pollutants to the environment it also determines annual revenues (S_A) and yearly operating costs i.e. the Net Present Value (NPV ). Thus the optimum investment strategy for selecting the technology will be this one for which the calculated NPV value, with the application of Bellman’s principle of optimality and in particular Pontryagin’s maximum principle , reaches its maximum with the assumed value of N_e1 electrical capacity of a power station . Attention should be paid to the fact that all investment decisions are the long-term ones so integrally connected with the risk of failure. Influence of time and the risk connected is very difficult and, as it is mentioned before, almost impossible to predict—especially in unstable economic conditions. But this instability does not release any investor from the duty to search for an optimum investment strategy as this search enables the investor to undertake an analysis on the basis of scientific forecasts. It allows thinking about it in a scientific manner and an analysis of conditions like changes in price relations between energy carriers or costs of utilizing the environment and so on, with which the strategy should be changed. So, the maximum functionality search results show how the mentioned price relations and environmental tariffs influence the optimum investment strategy i.e. the selection of an optimum energy technology. Besides, one of the methods of minimizing the risk can involve diversification of applied technologies. This means that it is necessary to discuss available technology options. As a consequence, one can rationally diversify the processes so as to make a choice among the most economically effective ones. Also, what is very important, the safety of electricity supplies will grow. So the application of mathematical models in economy and their analysis with the use of assumed scenarios allows a rational selection of investment strategies enabling achievement in the nearest future of the desirable values in an optimum way.