Security of supply is a frequently addressed concern in electricity markets such as the NZEM. Sufficient investment in generation is needed to ensure the security of electricity supply in such markets yet, electricity generators are risk averse with respect to such large investments and governments mindful of gold-plating the system and/or interfering in deregulated markets. We will develop a model that employs coherent risk measures to reflect a generating firm's risk aversion level and recommend under an assumed stochastic process for the price of electricity and perhaps another stochastic process for fuel cost, if that firm should invest in building a generation plant.

This project aims to extend the existing EPOC models and build new models that address the question of optimizing revenue for a hydro-electric generator whose actions influence the price of electricity. Such generators are often major generators. As their offer policy influences the outcome of the dispatch, hence the price of electricity, they cannot observe price as an exogenous process.

The reviews released on the NZEM in 2009 has resulted in an electricity industry bill currently under review in the Parliament, where 21 changes are proposed to the structure of the NZEM. One of these changes is to explicitly incorporate demand response functions in the objective of the SPD software. SPD is the side constrained network optimization problem that runs every period to determine the nodal prices of electricity and quantities dispatched. This project will devise methods to enable a major consumer of electricity to submit an optimal demand response bid to the wholesale electricity market in one period. We will then go on to model a decision process that would drive the major consumer's decisions over a time horizon beyond the single period.

The reviews released on the NZEM in 2009 has resulted in an electricity industry bill currently under review in the Parliament, where 21 changes are proposed to the structure of the NZEM. One of these changes advocates limiting the the number of tariffs available to distributors of electricity. The reason for this change is that (household) consumers of electricity are overwhelmed by the large number of options hence refrain from changing distribution companies or tariffs. This project will look at the optimal set of tariffs that would maximize total social welfare in an electricity market and what may be important attributes of such tariffs.

The reviews released on the NZEM in 2009 has resulted in an electricity industry bill currently under review in the Parliament, where 21 changes are proposed to the structure of the NZEM. One of these changes proposes divestiture of Tekapo A and B generation stations from Meridian to Genesis. The bill then outlines that a water management agreement must be reached between Meridian and Genesis to ensure that consent conditions, flood management requirements and Meridian's obligations under the Tiwai point contracts must be met. We will look at the agreement design from from the perspective of the two generators and attempt to design a steady state water management agreement. We will then assess the impact of this agreement on offer strategies of the generators.

Electricity distributors such as Transpower and Vector are among the regulated industries in NZ and have a cap on their annual revenue. Hence electricity distributors seek a policy of setting their fixed, variable and peak charges so as to meet a target revenue and discourage peak consumption. Peak consumption leads to (future) investment cost that is to be avoided if possible. In order to discourage peak consumption, they need a model for consumer behaviour. We will consider peak shaving and peak shifting models for consumers in a distribution network and analyze the distributor's revenue optimization problem as a 2 stage leader-follower game. This project will be extended to consider coincident peak charges (where more than a single major consumer is involved,) stochastic spot prices of electricity, and the network effects (i.e. the location of the consumers).

This project considers different models for allocating the cost of transmission assets to their users, i.e. electricity generators and consumers. The purpose of the study is to investigate the incentives that different charging schemes have on agent behaviour. The project will seek a charging regime that produces actions from market participants that recover costs without causing inefficiencies.