Researchers from our pool of specialists, however, identified some shortcomings in this model, which, although well established, ignores certain factors such as operational risk. Keep reading to learn more about the analysis by Enacom researchers on multi-objective decision-making in energy assets.
Optimizing Decision-Making in Energy Asset Acquisition
Electricity is a commodity with high volatility and price uncertainty because, as energy markets have evolved, market agents have gained the possibility of trading freely, which makes markets more dynamic and competitive.
With the changes in the electricity sector and the progress in opening up the energy market, which led to an increase in the number of transactions, agents realized that efficient risk management is essential to the healthy performance of this activity.
Therefore, risk analysis is strategically important and necessary to identify the factors that will influence the financial return of an investment.
The acquisition of new energy assets by a generation agent cannot be decided solely on the basis of investment or generation costs, since it is an activity with long-term impacts. Thus, when making decisions about a change in the portfolio, risks of different natures must be considered.
The researchers understand that an important point in decision-making under uncertainty is the absence of optimal solutions, regardless of whether the problem is single-criterion or multi-criteria, so that the optimal solution for one scenario may not be optimal for another.
A decision under uncertainty is therefore a robust solution that can meet any scenario in the best possible way. To find a robust solution, all the approaches, methods and strategies of Operations Research are directed at obtaining optimal solutions, which do not exist.
Taking this into account, Enacom researchers applied a strategy in their work aimed at finding the worst solutions, so that by eliminating them it is possible to apply any kind of preference information, thereby reducing the regions of decision uncertainty.
The paper therefore proposes the evolution of a methodological legacy for energy portfolio selection, so that the sensitivity found in the Brazilian energy market can be overcome, enabling more assertive and secure multiple decision-making.
To learn more about this study, check out the full paper, “Multi-Objective Decision-Making in Energy Asset Acquisition,” and understand the analysis by Enacom's specialists.
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