Addressing Risk in the Valuation of Energy Systems

Conference · Mon Jun 26 04:00:00 EDT 2017

DOI:https://doi.org/10.1115/POWER-ICOPE2017-3526· OSTI ID:1440689

Veeramany, Arun; Hammerstrom, Donald J.; Woodward, James T.; O'Brien, James G.

Valuation is a mechanism by which potential worth of a transaction between two or more parties can be evaluated. Examples include valuation of transactive energy systems such as electric power system and building energy systems. Uncertainties can manifest while exercising a valuation methodology in the form of lack of knowledge or be inherently embedded in the valuation process. Uncertainty could also exist in the temporal dimension while planning for long-term growth. This paper discusses risk considerations associated with valuation studies in support of decision-making in the presence of such uncertainties. It is often important to have foresight of uncertain entities that can impact real-world deployments, such as the comparison or ranking of two valuation studies to determine cost-benefit impacts to multiple stakeholders. The research proposes to address this challenge through simulation and sensitivity analyses to support ‘what-if’ analysis of well-defined future scenarios. This paper describes foundational value of diagrammatic representation techniques such as unified modeling language to understand the implications of not addressing some of the risk elements encountered during the valuation process. The paper includes examples from generation resource adequacy assessment studies (e.g. loss of load) to illustrate the principles of risk in valuation.

• Research Organization: Pacific Northwest National Laboratory (PNNL), Richland, WA (US)
• Sponsoring Organization: USDOE
• DOE Contract Number: AC05-76RL01830
• OSTI ID: 1440689
• Report Number(s): PNNL-SA-122514; TE1204000
• Country of Publication: United States
• Language: English

Related Subjects

Buildings
Decision-Making
grid
risk
simulation
uncertainty
valuation