Chung, Chongwook Lee, Jungwoo Yang, Jae-Suk 2025-12-03T01:34:41Z 2025-12-03T01:34:41Z 2025-11-11 2026-01 0301-4215 https://pubs.kist.re.kr/handle/201004/153731 This paper applies modern portfolio theory to analyze the power sector portfolio effect in economies with a significant share of renewable energy. This study contributes to the literature by adopting a socio-economic perspective instead of relying solely on financial analysis, while also incorporating up-to-date data on renewable technology capabilities and costs. It explores the optimal combination of electricity-generating assets by considering both cost and risk using the levelized cost of electricity. The study compares current and future power generation mixes, showing that a high share of renewable energy can enhance energy security by reducing cost fluctuations. It suggests that addressing nuclear safety concerns could accelerate the adoption of less cost-competitive renewable technologies. The research emphasizes that efficient power generation mixes require consideration of both cost and risk, and recommends a carefully phased investment approach to renewable energy technologies for countries where renewables are less cost-competitive than fossil fuels. English Pergamon Press Ltd. The portfolio effect in the power sector of economies prioritizing renewable energy Article 10.1016/j.enpol.2025.114934 1 Energy Policy, v.208 Energy Policy 208 N scie ssci scopus 001604977700002 2-s2.0-105019096529 Economics Energy & Fuels Environmental Sciences Environmental Studies Business & Economics Energy & Fuels Environmental Sciences & Ecology Article RISK OPTIMIZATION Energy price volatility Energy security Electricity generation mix Renewable energy Portfolio effect Efficient frontier LCOE (the levelized cost of electricity)