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Applications and Benefits of Operations Research in Energy
Operation Research (OR) can bring benefits in many areas in the Power (Electricity), Gas and Water industries, sometimes also referred to as Utilities. Applications are for example:
Competitive Electricity Markets
Mathematical optimization is widely applied in systems that are used by Regional Transmission Organizations (RTOs) to manage competitive electricity markets worldwide. A fundamental attribute of successful competitive electricity market is its ability to satisfy and balance diverse set of business requirements. Mathematical optimization provides a formal framework that enables systematic and transparent decision making.
Most market rules require that RTOs:
- Provide a reliable grid and coordinate grid operation to minimize costs consistent with secure operation of the grid;
- Schedule and dispatch generation to satisfy market demand for electricity at minimum price while taking into account the security of the grid;
- Purchase for the benefit of grid reliability the ancillary services and resources that are necessary for economic and secure delivery of electricity;
- Provide information to participants in an open, non-discriminatory manner to help them make consumption and production decisions.
Optimization based economic dispatch and unit commitment has been practiced for decades to coordinate grid’s economic and reliable operation. The key to competitive market success lies in the dealings with modeling details. The constrained optimization problem behind electricity market dispatch and pricing must therefore model grid details in order to realize the market efficiency as promised in the theory of economics and mathematics. Significant progress has been made in recent years in applications of formal optimization techniques for competitive market based resource commitment, scheduling, pricing and dispatch. Paragon’s customer AREVA T&D uses AIMMS extensively to model the optimization problems in their solutions for competitive electricity markets.
Power System Expansion
OR can help making better decisions when considering new investments in power system design capacity in order to meet an increase in electricity demand. The demand is uncertain since actual demand will be strongly influenced by actual weather and economic factors. When the new capacity is installed, it remains available for an extensive period of time. If the design capacity exceeds demand, the overall capital cost is likely to be too high. On the other hand, if the design capacity is insufficient, the plants can be expected to operate at peak capacity, and extra supply will need to be imported. Both these events are costly in terms of either purchase cost or operating cost. This makes a design capacity investment decision a nontrivial decision, where AIMMS can add value.
Case Studies in Energy
You can read more about actual AIMMS applications in Energy in the following case studies:
- AREVA T&D - ISO New England
- AREVA T&D - PJM Interconnect
- AREVA T&D - Transpower NZ
- AREVA T&D - e-terracommit Multi-Area Unit Commitment (RSC)
- ECN - ADMIRE-REBUS
- ECN - COMPETES
- ECN - COMPETES (part 1)
- ECN - COMPETES (part 2)
- UniSoma - CPFL, Load Curve Estimation for Transformers
- UniSoma - SCCPD, Load Curve and Demand Forecasting System
AIMMS Examples in Energy
To help you get started building an AIMMS optimization model tailored to your needs, we have developed a few small working examples. You can download these examples via the table below, and run them after installing the AIMMS software.
Customers
AIMMS Customers in Energy include:
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