Lappi, Pauli; Ollikka, Kimmo; Ollikainen, Markku - In: Energy Policy 38 (2010) 2, pp. 1079-1086
This paper studies the optimal fuel-mix of a CHP producer under emission permit price risk. The producer's multi-fuel plant uses two CO2-intensive fuels and one clean fuel. Using a mean-variance framework we develop three models. The models are divided into spot-models (risk neutral and risk...