Title: Maintaining, restarting, mothballing and scrapping peaking power plants: Cost estimation
Speaker: Professor Stein-Erik Fleten, Norwegian University of Science and Technology
Joint work with Erik Haugom (Inland Norway University of Applied Sciences), Alois Pichler (Chemnitz University of Technology), Carl J Ullrich (James Madison University)
Date & Time: 11am-noon, Wednesday 18 April, 2018
Location: WH417, Auckland University of Technology (map)
This paper estimates costs associated with mothballing, restarting, abandoning and maintaining peaking power plants. We develop a discrete-time dynamic programming model to explain switching and maintenance behaviour of plant managers. The constrained optimization approach to estimate crucial costs accommodates nonparametric dynamics for the expectations of the plant managers regarding future profitability. The empirical analysis is based on a database of the annually reported status of power plants to the United States Energy Information Administration (EIA) during 2001-2009. Our cost estimates imply so-called avoided cost rates which are less than the default rates used in the PJM Reliability Pricing Model capacity market, indicating that consumers may be overpaying for system reliability.
This seminar is being hosted by the School of Engineering, Computer and Mathematical Sciences at Auckland University Of Technology.