IDEAS home Printed from https://ideas.repec.org/a/inm/oropre/v68y2020i1p1-15.html
   My bibliography  Save this article

Modeling Dependent Outages of Electric Power Plants

Author

Listed:
  • Vishwakant Malladi

    (Indian School of Business, Mohali, Punjab 140 306, India)

  • Rafael Mendoza-Arriaga

    (Man GLG, London EC4R 3AD, United Kingdom)

  • Stathis Tompaidis

    (Department of Information, Risk, and Operations Management, University of Texas at Austin, Austin, Texas 78712)

Abstract

We propose a framework to model dependence of outages of electric power plants. Our framework allows for common factors, such as weather events and fuel shortages, to drive outages. We calibrate our model for power plants in the Electric Reliability Council of Texas and the Western Electricity Coordinating Council regions using a unique data set of actual outages from the North American Electric Reliability Corporation. We find strong evidence of dependence in power plant outages based on the input fuel of the plants and illustrate how our framework can be used to evaluate the reliability of the supply of electricity for both regions, and also the impact on reliability of building additional capacity.

Suggested Citation

  • Vishwakant Malladi & Rafael Mendoza-Arriaga & Stathis Tompaidis, 2020. "Modeling Dependent Outages of Electric Power Plants," Operations Research, INFORMS, vol. 68(1), pages 1-15, January.
    • Handle: RePEc:inm:oropre:v:68:y:2020:i:1:p:1-15
    DOI: 10.1287/opre.2019.1952
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/opre.2019.1952
    Download Restriction: no
    File URL: https://libkey.io/10.1287/opre.2019.1952?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Ross Baldick & Sergey Kolos & Stathis Tompaidis, 2006. "Interruptible Electricity Contracts from an Electricity Retailer's Point of View: Valuation and Optimal Interruption," Operations Research, INFORMS, vol. 54(4), pages 627-642, August.
    2. Rafael Mendoza-Arriaga & Vadim Linetsky, 2016. "Multivariate Subordination Of Markov Processes With Financial Applications," Mathematical Finance, Wiley Blackwell, vol. 26(4), pages 699-747, October.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Meyabadi, A. Fattahi & Deihimi, M.H., 2017. "A review of demand-side management: Reconsidering theoretical framework," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 367-379.
    2. Tseng, Chung-Li & Zhu, Wei & Dmitriev, Alexandre, 2009. "Variable capacity utilization, ambient temperature shocks and generation asset valuation," Energy Economics, Elsevier, vol. 31(6), pages 888-896, November.
    3. Tianyao Chen & Xue Cheng & Jingping Yang, 2019. "Common Decomposition of Correlated Brownian Motions and its Financial Applications," Papers 1907.03295, arXiv.org, revised Nov 2020.
    4. Wang, Tian & Deng, Shiming, 2019. "Multi-Period energy procurement policies for smart-grid communities with deferrable demand and supplementary uncertain power supplies," Omega, Elsevier, vol. 89(C), pages 212-226.
    5. Lin, Feng & Peng, Liang & Xie, Jiehua & Yang, Jingping, 2018. "Stochastic distortion and its transformed copula," Insurance: Mathematics and Economics, Elsevier, vol. 79(C), pages 148-166.
    6. Patrizia Semeraro, 2022. "Multivariate tempered stable additive subordination for financial models," Mathematics and Financial Economics, Springer, volume 16, number 3, June.
    7. Patrizia Semeraro, 2021. "Multivariate tempered stable additive subordination for financial models," Papers 2105.00844, arXiv.org, revised Sep 2021.
    8. Gautam Gowrisankaran & Stanley S. Reynolds & Mario Samano, 2016. "Intermittency and the Value of Renewable Energy," Journal of Political Economy, University of Chicago Press, vol. 124(4), pages 1187-1234.
    9. Ghosh, Ranjan & Goyal, Yugank & Rommel, Jens & Sagebiel, Julian, 2017. "Are small firms willing to pay for improved power supply? Evidence from a contingent valuation study in India," Energy Policy, Elsevier, vol. 109(C), pages 659-665.
    10. Agostino Capponi & Christoph Frei, 2017. "Systemic Influences on Optimal Equity-Credit Investment," Management Science, INFORMS, vol. 63(8), pages 2756-2771, August.
    11. Qu, Yan & Dassios, Angelos & Zhao, Hongbiao, 2021. "Random variate generation for exponential and gamma tilted stable distributions," LSE Research Online Documents on Economics 108593, London School of Economics and Political Science, LSE Library.
    12. Deng, Shi-Jie & Xu, Li, 2009. "Mean-risk efficient portfolio analysis of demand response and supply resources," Energy, Elsevier, vol. 34(10), pages 1523-1529.
    13. Albanese, Claudio & Lo, Harry & Tompaidis, Stathis, 2012. "A numerical algorithm for pricing electricity derivatives for jump-diffusion processes based on continuous time lattices," European Journal of Operational Research, Elsevier, vol. 222(2), pages 361-368.
    14. Fred Schroyen & Adekola Oyenuga, 2011. "Optimal pricing and capacity choice for a public service under risk of interruption," Journal of Regulatory Economics, Springer, vol. 39(3), pages 252-272, June.
    15. Kovacevic, Raimund M. & Pflug, Georg Ch., 2014. "Electricity swing option pricing by stochastic bilevel optimization: A survey and new approaches," European Journal of Operational Research, Elsevier, vol. 237(2), pages 389-403.
    16. Gila E. Fruchter & Hussein Naseraldin, 2021. "Coordinating Carbon Emissions via Production Quantities: A Differential Game Approach," Games, MDPI, vol. 12(1), pages 1-16, February.
    17. Alasseri, Rajeev & Tripathi, Ashish & Joji Rao, T. & Sreekanth, K.J., 2017. "A review on implementation strategies for demand side management (DSM) in Kuwait through incentive-based demand response programs," Renewable and Sustainable Energy Reviews, Elsevier, vol. 77(C), pages 617-635.
    18. Albert Banal-Estañol & Augusto Rupérez Micola, 2009. "Composition of Electricity Generation Portfolios, Pivotal Dynamics, and Market Prices," Management Science, INFORMS, vol. 55(11), pages 1813-1831, November.
    19. Binbin Li & Yu Tian & Fred Chen & Tongdan Jin, 2017. "Toward net-zero carbon manufacturing operations: an onsite renewables solution," Journal of the Operational Research Society, Palgrave Macmillan;The OR Society, vol. 68(3), pages 308-321, March.
    20. Lijun Bo & Huafu Liao & Yongjin Wang, 2018. "Optimal Credit Investment and Risk Control for an Insurer with Regime-Switching," Papers 1807.05513, arXiv.org.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:oropre:v:68:y:2020:i:1:p:1-15. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.