Simulation of the Colombian Firm Energy Market

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dc.contributor.authorCramton, Peter
dc.contributor.authorStoft, Steven
dc.contributor.authorWest, Jeffrey
dc.dateWe present a simulation analysis of the proposed Colombian firm energy market. The main purpose of the simulation is to assess the risk to suppliers of participation in the market. We also are able to consider variations in the market design, and assess the impact of alternative auction parameters. Three simulation models are developed and analyzed. The first model (Model 1) uses historical price data from October 1995 through May 2006 to assess the performance risk of hypothetical thermal and hydro generating units. The second model (Model 2) uses historical price and operating data to assess performance risk of the actual generating units in Colombia over the same period. This analysis allows us to assess company risk. The third model (Model 3) differs from the other models in that it explicitly models the firm energy auction and investments going forward. Thus, the model is able to assess how the distribution of firm energy purchases differs from the firm energy target, and how this distribution depends on the firm energy demand curve. Model 3 also studies the investment decisions of suppliers, the impact of lumpy investments, and the impact of a higher scarcity price.
dc.date.accessioned2007-08-07T13:46:11Z
dc.date.available2007-08-07T13:46:11Z
dc.date.issued2006-12
dc.description.abstractWe present a simulation analysis of the proposed Colombian firm energy market. The main purpose of the simulation is to assess the risk to suppliers of participation in the market. We also are able to consider variations in the market design, and assess the impact of alternative auction parameters. Three simulation models are developed and analyzed. The first model (Model 1) uses historical price data from October 1995 through May 2006 to assess the performance risk of hypothetical thermal and hydro generating units. The second model (Model 2) uses historical price and operating data to assess performance risk of the actual generating units in Colombia over the same period. This analysis allows us to assess company risk. The third model (Model 3) differs from the other models in that it explicitly models the firm energy auction and investments going forward. Thus, the model is able to assess how the distribution of firm energy purchases differs from the firm energy target, and how this distribution depends on the firm energy demand curve. Model 3 also studies the investment decisions of suppliers, the impact of lumpy investments, and the impact of a higher scarcity price.
dc.format.extent452556 bytes
dc.format.mimetypeapplication/pdf
dc.identifier.citation"Simulation of the Colombian Firm Energy Market," (with Steven Stoft and Jeffrey West), Working Paper, University of Maryland, December 2006.
dc.identifier.urihttp://hdl.handle.net/1903/7054
dc.language.isoen_USen
dc.publisherUniversity of Maryland
dc.relation.isAvailableAtDigital Repository at the University of Marylanden_us
dc.relation.isAvailableAtEconomics Departmenten_us
dc.relation.isAvailableAtCollege of Behavioral and Social Sciencesen_us
dc.relation.isAvailableAtUniversity of Maryland (College Park, Md.)en_us
dc.subjectColumbian Firm Energyen
dc.subjectrisk to suppliersen
dc.titleSimulation of the Colombian Firm Energy Marketen
dc.typeArticleen

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