Electricity Portfolio Optimisation

Abstract

This paper describes work that was carried out in the early years of privatisation of the Australian electricity industry for one of the newly-created electricity distribution companies. Customer demand had been forecast by the company for the next 5 years and each of the generators who supplied the company had offered to sell load (electricity) to them at prices that depended on time of day, time of year and type of day (working day, weekend etc.). Each generator also imposed constraints on their supply such as the evenness of distribution of load over the day. The company required a model to help them evaluate the various contracts and to provide a basis for negotiating better deals with the generators.