Uncovering the True Value in Merchant Generation

Statistical-Based Scenario Analysis (SBSA) draws from historical observations of key drivers of wholesale prices and simulates their joint effect on revenues to a merchant generation asset via dispatch modeling. Depending on the number of and extent of variation in key drivers and the length of the modeling horizon, as many as 20,000 simulations can be conducted to properly assess the expected earning potential of a merchant asset for a given year. The SBSA approach then integrates the results obtained in these thousands of simulations within a statistical framework, adding the much-desired probability dimension.