Optimeering has been successful in its application to the Research Council of Norway for funding for the R&D project “A New Model for Power Markets Under Uncertainty”. The project’s goals are to develop improved practical approaches to account for uncertainty in power market modelling, and ultimately to develop a new power market model for the Nordic power market based on the approaches developed. The project has a 2-year timeline and is the biggest project so far in Optimeering´s history.
Existing power market models generally tend to focus on one “key” uncertainty only – with this being hydrology (specifically, hydro inflow) in most Nordic-focused models. Unfortunately, this tends to mean such models miss out on capturing both the much wider range of uncertainty that occurs in reality and its impact on the market, as well as the interaction between the various sources of uncertainty and what this means for plant operation, market prices, and market development. Often such models are also difficult and complex to use, as they attempt to capture this single key uncertainty in high detail (whilst ignoring the rest).
Our project will have two goals – usability and breadth. We will examine a broader range of uncertainties than just hydrology, including demand, intermittent production, fuel prices and the development of new technologies. We will also be focusing on usability – ensuring the model is straight forward to use, and does not get bogged down in overly-detailed modelling of complex behaviour, but rather on a more universal capturing of the impact of uncertainties on market operation and out-turns.
The model will be assessed in the project by performing a long-run analysis of the Nordic power market, which will be supplied to the commercial project participants. If you are interested in participating in the project, please do not hesitate to contact us for more information on participation, the project structure, goals and proposed approaches.