Energy Market Modeling

Energy Market Modeling

CRA's Energy Consulting Practice has extensive energy market modelling experience that enables us to set the bar for power industry market analytics.

Electric sector market models

AURORAxmp (“Aurora”)

AURORAxmp (“Aurora”) is a power market simulation tool designed to forecast power prices over both the short and long term. At its core, Aurora is a fast, hourly-dispatch engine that simulates the dispatch of power plants in a chronological, multi-zone, transmission-constrained system. The model is ‘economically coherent’, fully utilizing the hourly chronological commitment/ dispatch logic in that long-term algorithm. This is unlike other approaches take two models or more, or make major simplifying assumptions (load duration curves, etc.), and their data formats are often inconsistent.

CRA has customized Aurora for use in client engagements including generation valuation, transmission analysis, risk analysis, hedging, and portfolio optimization in the U.S. and Europe.

North American Electricity and Environment Model (“NEEM”)

North American Electricity and Environment Model (“NEEM”) is a flexible, bottom-up partial equilibrium model of the North American electricity market that can simultaneously model both system expansion and environmental compliance over a 50-year time frame. The model employs detailed unit-level information on all of the generating units in the United States and large portions of Canada. NEEM models the evolution of the North American power system, taking account of demand growth, available generation, environmental technologies, and environmental regulations both present and future. The North American interconnected power system is modeled as a set of regions that are connected by a network of transmission paths.

Natural gas sector market model (“NGF”)

NGF models the supply and demand of natural gas in the United States and Canada and forecasts natural gas prices across key natural gas pricing points. CRA’s NGF model can be used iteratively with Aurora or NEEM to converge on equilibrium natural gas prices across multiple sectors. The NGF model is highly flexible and able to simulate alternative scenarios for gas demand, resource production, gathering, and transport cost, transport constraint, and environmental charges.

Environmental policy models

CRA has developed models designed to evaluate the impact of environmental policies that impose a constraint or price on emissions related to power plant generation. The NEEM model, described above, can analyze how alternative environmental policies impact generation build out, market prices, power plant dispatch, and retail rates. This model has been used extensively in support of analysis surrounding CO2, NOX, and SO2 policy development and implementation. CRA also developed spreadsheet tools to evaluate state specific renewable policies on renewable energy credit pricing.

Capacity pricing market models

CRA has developed capacity pricing models for U.S. markets such as ISO-NE, NYISO, and PJM, as well as the UK, that reflect the detailed rules and nuances of each market. These models are linked with our electricity pricing and dispatch models for consistent supply and demand assumptions. These Excel-based tools allow flexibility in scenario development and analysis; for example, changes in the locational capacity requirements or the cost of new entry.

Extrinsic value analysis (EVA) model

CRA has developed a model for analyzing the potential to capture incremental value of gas-fired units in the real-time markets. The model runs a stochastic dispatch that can identify extrinsic value of an asset.

Revenue requirement models

CRA has developed state and federal revenue requirement models to support strategic analysis, expert review, and testimony. CRA’s revenue requirement models are bottom up and scenario based. CRA’s revenue requirement models have been used to analyze transmission proposals to an ISO and the impact of portfolio divestment decisions on retail rates.

Portfolio financial models

Electric Portfolio Optimization (EPO) Model

CRA has developed a financial model for analyzing how alternative generation portfolios perform under different scenarios and sensitivities. This model uses output from our Aurora and NEEM models and performs a dispatch simulation of alternative combinations of assets and measures performance on cost and risk.