A fuzzy-based approach for strategic choices in electric energy supply. The case of a Swiss power provider on the eve of electricity market opening

Abstract

Risk evaluation and strategic choice has become very complex for power providers, because of the growing number of uncertain parameters involved, such as energy market prices, water inflow, and demand. The lack of information and the absence of the decision maker's perception are just some of the many elements that must be accounted for. Therefore, with an approach based on fuzzy set theory, this paper aims to propose a methodology based on strategic choices that will enable decision makers to evaluate the performance of their strategies and portfolios through the computation of an indicator of economic performance, for different time-horizons. By subsequently considering the different imprecise parameters—such as the electricity spot price, the natural gas market price, rainfall and snow, etc.—in the assessment of different strategies and the analyzation of their impacts through scenario analysis, it is concluded that the resulting profit depends not only on the perception of the market player, but also on the imprecision of the variables—the same strategy may produce two different results under a different combination of parameters—as well as on the time-horizon considered. On a simple basis, it has also been possible to compare portfolios of customers.