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10 April 2006 -- EPIS, Inc. announced a new capability in AURORAxmp Electric Market Model for analyzing capacity payments to ensure reliable power systems across North America.
"This new capability will help energy market participants identify what capacity payments may be needed to ensure that there are enough resources to reliably meet the growing demand for electricity," said Warren H. Winter, EPIS, Inc. President.
AURORAxmp uses an iterative optimization approach in which the level of capacity payments are re-evaluated and modified to better achieve the reserve margin requirements in a region over a study period. As regions develop capacity auctions and other forward capacity market methods, this simulation capability will help participants understand fundamental market forces related to retirement of less-economic resources, and the market economics of adding new power plants, alternative energy sources, and demand-curtailment alternatives.
"In AURORAxmp's capacity and energy market simulation approach, reliability and economics work together in long-term studies using planning reserve margin targets by the reliability regions," Winter said. "In executing a long-term capacity expansion study, if the target reserve margin targets are not achieved by prices in the energy market, AURORAxmp estimates additional capacity payments to ensure the marginal resources by region achieve their required economic return. Hence, economic resources will still be constructed, but capacity credits are applied in order to achieve the targets."
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