Designing Risk-Management Strategies for Generation Companies

Planning is done through multiple options with uncertainties which do not necessarily pursue the same objectives. Risk and uncertainties are different concepts and can be quantified separately. Short-term tradeoffs between productivity and safety often exist in the operation of critical facilities such as power plants. Gencos experience different uncertainties (financial or physical). This exposes Gencos to risk. So risk management should be a part of their planning process. In this paper a typical power plant is modeled in terms of its different states. Then, the alternative risk management strategies for this plant have been evaluated based on the predicted operating performance and it is shown how a model, coupled with explicit value judgments, can be used to design optimal strategies, e.g., to balance initial costs, long term operations and maintenance costs, and the potential costs of catastrophic failures.

Keywords:

safety , risk management , productivity , trade-off