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Planning ModelS/Energy Economic Models

The planning models were designed to aid utilities in analyzing various power generation options. The planning models were also developed to help assess the benefits of improved utility technologies and methods. The energy-economic model was designed to help the US Government analyze the effect of energy economic interactions.


Production Simulation.

This required the implementation of specialized active set simplex algorithms for a new approach to modeling generation capacity planning through a linear program, the theory which was developed by Jerry Bloom at EPRI. Constraints referred as facet constraints, takes into account the probabilistic nature of outages through the use of an Equivalent Load Duration Curve. The linear program has an exponential number of constraints; however, an observation by Bloom makes it possible to solve the problem efficiently in a practical environment. At SBSI, we implemented Bloom’s specialized algorithm with modifications and as well as developed a robust approach for PHASE I (i.e.,finding an initial feasible solution).


A Strategic Interconnection Model.

This model was developed by Lotus Consulting Group for the Electric Power Research Institute to help analyze the effects of interconnecting two power systems with correlated loads by an intertie of probabilistic transfer capacity. The model is an interactive computer model and is implemented to run on an IBM PC. The model can be used to analyze various issues such as:

  • The effect of the size of the intertie on the loss of load probability.
  • The effect of increasing or decreasing the reserve margin.
  • The effect of changing the load correlation.
USAM – Utility Systems Analysis Model.  

This commercial software package was developed by Lotus Consulting Group to help utilities examine various demand and supply side alternatives. The model is designed to run on the IBM PC/XT. One of the founders of SBSI helped in analyzing and developing a fast probabilistic production costing routine for use in USAM. Considerable research went in the analysis and implementation of the probabilistic production costing routine. For example, the speed and accuracy of the routine was examined on a unit-by-unit and block loading basis. The end result is a fast, accurate method for performing probabilistic production costing.

A Benefit/Cost Analysis Spreadsheet Model.  

This application was developed through Lotus Consulting Group for the Electric Power Research
Institute to help assess the potential benefits of improved utility technologies and methods. The
application is based on the EPRI Regional Systems approach. The implementation is being done on the IBM PC using the Lotus 1-2-3 spreadsheet software package. The model will help analyze EPRI R&D in the following areas:

  • Generating-unit availability (reliability) improvement.
  • Generating-unit heat rate (efficiency) improvement.
  • Electrical system losses reduction.
A Generation Expansion Planning Model.

This model was designed to aid the Boston Edison Company in deciding which technologies to buy, and how to use them, in order to satisfy the demand for energy over a pre-specified time horizon. The model is a nonlinear optimization model, which can be used to answer questions such as:

  • How would an increase in the cost of borrowing money affect the decision to buy generation capacity?
  • How would the introduction of new technology affect the decision of what generation capacity to buy?

PILOT – Welfare Equilibrium Model (WEM).

This was developed by a team of Operations Research scientists and Economists. PILOT is a large linear programming model (approximately 700 constraints and 3000 variables) for developing long run projections of energy supply, energy demand, and economic growth within an economic framework of aggregate consumer welfare maximization and competitive market equilibrium. It is a dynamic, multi-sector model with look-ahead capabilities. It provides useful insight as well as a detailed set of internally consistent numbers required in any important planning exercise. Some of the software interfacing with this model was developed to help analyze the model output and to incorporate consumer “substitution” functions and industry “production” functions. Some of the issues considered were:

  • The effects of high energy availability and low energy availability.
  • Changes in the price of imported energy.
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