A model based in numerical simulation techniques as a tool for decision- making and risk management in a wholesale electricity market. Part I: General structure and scenario generators.

Abstract

Changes in the electricity industry have lead to less regulated and more competitive energy market where risk management becomes a key issue. Decision-making and Risk analysis in a competitive environment require powerful simulation models to assess alternatives and evaluate risks. These simulation tools have to be adapted to the peculiarities of the wholesale electricity markets. With this aim, a model based on numerical simulation techniques is presented in two parts. This first part includes a general overview of the model structure and a description of the scenario generators that are developed to represent some of the risk factors. In the second part, the imbedded market model is presented in detail.