System Optimizer

For Capacity and Emissions

System Optimizer provides thorough regional or portfolio-level optimization over the mid- to long-term time horizon.

The Capacity Component:

The System Optimizer – Capacity component is a detailed and fast economic optimization model that simultaneously considers resource investment decisions and external market transactions. It can be integrated with other Ventyx modules to optimize market solutions on a regional market basis or optimize an entity's asset portfolio.

Use System Optimizer - Capacity to:

Simultaneously consider of generation and transmission expansion alternatives
Develop long-term resource investment plans including type, size, location, and timing of capital projects over a 20-year horizon
Access significant production and costing detail in results
Include a complete range of technologies, including renewables, DSM, retirements, and transmission upgrades, today and in the future
Consider interactions with external markets and between internal regions

Power market participants face an increased level of complexity in meeting their load and contract obligations in the future while considering technology improvements, ageing assets, multiple stakeholder input, and self-build vs. buy options. For instance, utilities create long term plans to provide a framework for prudent future actions that are required to ensure continued, reliable, and least cost electric service to their customers.

Two critical elements in this exercise are the evaluation of future resource needs to meet growing demand, and the presentation to stakeholders and regulatory bodies of a balanced and responsible resource strategy that meets reliability requirements, is fiscally sound, promotes environmental stewardship, and balances risks and costs.

System Optimizer – Capacity Answers key regional and portfolio level investment decisions such as:

What to build?
What to retire?
How much to build?
Where to build?
When to build?

An example of a 20-year resource expansion plan snapshot created using System Optimizer – Capacity

The Emissions Component:

The System Optimizer – Emissions component provides a robust modeling tool for emission compliance and emission markets representation. This component can also be coupled with the Capacity component to allow for complex emissions market representation and compliance rules to be included as part of the capacity investment options.

Optimize the portfolio of generation assets by simultaneously considering retirements, retrofit/refurbish/repower investments, and new plant investments in the face of hard or soft emission limits. Address questions such as:

Invest in retrofitting, refurbishing, or repowering existing assets or consume (purchase) more emissions allowances or purchase more energy?
Bank unneeded emissions allowances or sell them?
Change fuel blends?
Determine the opportunity (shadow) costs of hard emission constraints under alternative capital spending programs

Integrates emissions compliance investments with strategic changes in operating strategies

Cap-and-trade program credits trading and banking/drawing
Fuels blending
Spot market and contract transactions
Reallocation of generation across units

Allow specification of emission regulations through the choice of four types of emission allowance rules

Cap
Cap-and-trade
Rate
Price

It can be used with Market Analytics to optimize operations considering emission rules and compliance on a regional market basis or with Planning and Risk to optimize operations as they impact an entity's asset portfolio.

Regional Applications:

Forecast regional power market prices taking into account multiple emission limits
Forecast emissions allowance prices and annual carryover of allowances, taking into account
Simulate the impact of changes in fundamental drivers on resulting emissions allowance prices

Portfolio Applications:

Allows for the enhanced modeling of asst portfolios by capturing complex emissions market and compliance rules affecting operations of a defined asset portfolio when used with other Ventyx modules
Forecast portfolio profitability using a forecast of emission allowance costs
Deterministic evaluation: How does the profitability of the portfolio vary under different projections of emission prices and other key drivers?
Stochastic evaluation: How does the profitability of the portfolio vary under different Monte Carlo scenarios of emission prices, fuel prices, electricity prices, and demand growth, accounting for cross-commodity correlations as well as volatility?