Generation cost frontier analysis, dynamic market adjustment, and strategic gaming: Integrated tools for benchmarking, competitive market analysis, and strategy formulation under conditions of uncertainty in the transition to a competitive electricity market

Conference · Wed Jul 01 04:00:00 EDT 1998

OSTI ID:20015064

Corio, M R; Bellucci, J W; Boyd, G A; Perl, K E

The authors describe a three dimensional frontier consisting of: spending, availability/reliability, and utilization/heat rate. To determine optimal behavior in a future deregulated market, one must also find the optimal adjustment path from present to long-run frontier operation, and the optimal strategic action/response as determined by game theory. One can also perform more limited optimizations along either the two dimensional spending/reliability or spending/utilization frontiers. Although the authors mainly discuss optimizing existing domestic plants, frontier analysis could easily be applied to an electric producer's plants or acquisition targets internationally. Efficient operation saves money even in countries where electric markets are still regulated and can also confer indirect environmental benefits. AER is also applying these frontier analysis and game theory techniques to environmental decision-making, specifically to environmental retrofit decisions.

• Research Organization: Applied Economic Research Co., Inc., New York, NY (US)
• OSTI ID: 20015064
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
DECISION MAKING
ELECTRIC POWER INDUSTRY
GAME THEORY
MANAGEMENT
MARKET
PROCUREMENT
THERMAL POWER PLANTS