Leveraging fuel purchasing and management activities within a competitive power market

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

OSTI ID:20050591

Stallard, S; Anderson, A; Schick, J

Worldwide, one can see that competition, deregulation, or at a minimum, a closer focus on the overall economies of power generation is stimulating change within the power sector. Power generation markets are becoming liberalized providing for independent power producers and, in some cases, providing third-party access to the grid. In the US, fuel costs are being transformed from a pass-through expense to the consumer to one of a strategic asset or liability. In every case, fuel quality, fuel-related costs, and managing the fuel purchasing process are key factors in the overall efficiency and financial performance on the power generator. This paper illustrates how effective fuel management requires that the utility or GenCo improve upon historical fuel management/purchasing practices to lower overall generation costs and address the opportunities present in the power and fuel markets. Key framework/principles to be discussed include: Tighter coupling of fuel purchasing, short-term planning, and dispatch functions. Effective planning to link purchased fuel to system demand forecasts, consider contract/transportation constraints/economics, evaluate alternative sources, and consider fuel mix strategies (e.g., between sport, contract, and various regions/qualities). Tools and processes needed to support the new business environment such as fuel impact analysis, application of integrated fuel evaluation/management systems, market forecasting, purchasing, and the role of fuel management in energy trading. Flexibility to support optimal purchasing strategies including shorter purchase cycles, special buys, buys for third parties, and coal tolling. This framework would be discussed using examples from the US, UK, European, and Pacific Rim markets.

• Research Organization: Black and Veatch (US)
• OSTI ID: 20050591
• Report Number(s): CONF-971214--
• Country of Publication: United States
• Language: English

Related Subjects

29 ENERGY PLANNING, POLICY, AND ECONOMY
EFFICIENCY
ELECTRIC POWER INDUSTRY
ENERGY EXPENSES
PERFORMANCE
PRICES