DocumentCode :
1055495
Title :
Optimizing Short-Term Natural Gas Supply Portfolio for Electric Utility Companies
Author :
Chen, Hanjie ; Baldick, Ross
Author_Institution :
Dept. of Electr. & Comput. Eng., Texas Univ., Austin, TX
Volume :
22
Issue :
1
fYear :
2007
Firstpage :
232
Lastpage :
239
Abstract :
Natural gas fired power plants (NGFPP) are important electricity generation resources in the United States. Optimizing the natural gas supply portfolio, especially the short-term portfolio, is critical for the day-to-day operations and the financial performance of NGFPPs. Traditionally, such optimization problems are solved using cost-minimization-based frameworks. However, such frameworks are facing challenges due to the lack of consideration of associated financial risks in the current deregulated electricity markets, which the electric utility companies (EUCs) who own and operate NGFPPs now bear. This paper presents a utility-maximization-based framework to optimize the short-term natural gas supply portfolio for the EUC. It considers the financial risks associated with the portfolio and incorporates the risk preferences of the EUCs as decision-maker (DM) in the portfolio optimization process. An application of the proposed framework is provided, and its results show that the proposed framework is more desirable in terms of risk-cost trade-off optimization
Keywords :
electricity supply industry; investments; optimization; power generation economics; risk analysis; steam power stations; United States; deregulated electricity markets; electric utility companies; electricity generation resources; financial risks; natural gas fired power plants; portfolio optimization process; risk-cost trade-off optimization; short-term natural gas supply portfolio; utility maximization; Contracts; Delta modulation; Electricity supply industry; Electricity supply industry deregulation; Natural gas; Portfolios; Power generation; Power industry; Resistance heating; Stochastic processes; Electric utility companies; Monte Carlo simulation; electricity price model; heat rate; natural gas; utility function;
fLanguage :
English
Journal_Title :
Power Systems, IEEE Transactions on
Publisher :
ieee
ISSN :
0885-8950
Type :
jour
DOI :
10.1109/TPWRS.2006.889144
Filename :
4077098
Link To Document :
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