Utilities today trade enormous volumes of gas and power, which often far exceeds own generation. However, most of the utilities do not apply mathematical optimization models for decision support of their trading books. Whereas optimization is well known for power generation scheduling, forward trading portfolios are not optimized systematically yet.
We believe that with a joint optimization approach towards power generation and physical forward trading, utilities can exploit considerable additional profit potential. In particular, the optimization of long term monthly generation together with standard contract trading portfolios for exchanges such as EEX, Endex, Powernext or Nordpool will increase efficiency.
Decision Trees's multidimensional Stochastic Optimization approach that considers uncertainties of prices at the forward exchange markets as well as ressource availability in its scenario tree based approach, is capable to mobilize additional profits and avoid unnecessary risk.