Long term planning of heating systems and building renovation in a city

An approach to long term investment planning into an energy distribution system is presented here. Its purpose is to provide comprehensive long-term investment solutions for greenhouse gas emissions targets, or simply cost effective solutions that encompass heating, electricity generation and building renovation. Based on stochastic programming it does this with a strong focus on the uncertain nature of fuel prices, taxes and subsidies. The article explains the main features of the approach and includes its application to a case study. The case study demonstrates the effect of the perceived probability of a tax increase on the optimal long term investment policy in heating systems and building renovation.