On Multiple Criteria Decision Support for Suppliers on the Competitive Electric Power Market

Mariusz Kaleta, Wlodzimierz Ogryczak (), Eugeniusz Toczyłowski () and Izabela Żółtowska

Annals of Operations Research, 2003, vol. 121, issue 1, 79-104

Abstract: As an active participant of a competitive energy market, the generator (the energy supplier) challenges new management decisions being exposed to the financial risk environment. There is a strong need for the decision support models and tools for energy market participants. This paper shows that the stochastic short-term planning model can be effectively used as a key analytical tool within the decision support process for relatively small energy suppliers (price-takers). A self-scheduling method for the thermal units on the energy market is addressed. A schedule acquired for given preferences can be used as a desired pattern for bidding process. The uncertainty of the market prices is modeled by a set of possible scenarios with assigned probabilities. Several risk criteria are introduced leading to a multiple criteria optimization problem. The risk criteria are well appealing and easily computable (by means of linear programming) but they meet the formal risk aversion standards. The aspiration/reservation based interactive analysis applied to the multiple criteria problem allows us to find an efficient solution (generation scheme) well adjusted to the generator preferences (risk attitude). Copyright Kluwer Academic Publishers 2003

Keywords: energy market; decision support; risk; multiple criteria optimization; short-term planning; unit commitment (search for similar items in EconPapers)
Date: 2003
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DOI: 10.1023/A:1023351118725

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