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Adica is an industry leader in providing Smart Market® strategic analysis software and decision support for energy companies and government agencies worldwide. Our innovative software solutions, developed in collaboration with Argonne National Laboratory, provide unique and valuable insights that enable our clients to succeed in energy markets.
EMCAS is a Smart Market® software product that uses a new multi-agent modeling approach to simulate how decisions are made in today’s electricity markets, where several GenCos are competing with each other, both in terms of short-run operations and in long-term capacity expansion.
Independent reviews of energy industry software conducted by Deloitte Consulting, The Fraunhofer Institute for Systems and Innovation Research, and others point to EMCAS as a "best-of-class" solution for analyzing priority energy market issues such as:
1. Market Design and Development: Regulatory agencies and system operators can utilize EMCAS to test the impact that different regulatory structures and market rules (e.g., price setting mechanisms, tariff rules, settlement options) would have on the various market participants and the market as a whole.
Market rules can be tested for vulnerabilities to system shocks and price spikes caused by systemic problems (lack of capacity or inadequate transmission grid), random events (low hydrology, component outages, load variations), or market gaming by participants who are in a position to exploit a set of market rules to their advantage.
2. Market Monitoring and Mitigation: As today’s power markets tend to be highly dynamic with rapid and far-reaching changes such as transfers of ownership of existing generating assets and new market entrants quickly altering the playing field, regulators and system operators need to be in a position to monitor these ongoing changes and understand the near- and long-term implications for market performance and system reliability. Part of this oversight is an ongoing assessment of the potential for market power exercised by the different generation owners. EMCAS is specifically designed to assist in these market monitoring functions.
Generation companies can grow quickly in their market dominance and use their position to exert price pressure and improve their financial performance. However, market power may arise in less obvious but equally consequential situations where smaller, less-dominant, generation owners happen to have a locational advantage and are able to exploit the unique characteristics and physical limitations of the transmission grid (load pocket) or weaknesses in market rules by developing bidding strategies that successfully drive up prices beyond competitive levels in that particular part of the grid. In this case, both the intensity and the frequency of the location-specific load pocket or transmission bottleneck are crucial. A large price spike may be of less concern if it occurs only during a few hours per year, whereas a moderate price spike may have much larger impacts if it can be sustained for a sizeable number of hours per year. This type of situation can only be captured in a model such as EMCAS that reflects the transmission grid in detail, simulates the market operation chronologically on an hourly basis, and allows agents to learn from previous experiences and adapt their behavior and bidding to new situations.
Contact Adica for additional information on how our Smart Market® software enables proactive smart monitoring of electricity markets.
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