Management decision simulation for electrical utilities

Abstract Management decisions in electrical utilities have to be taken with a view to both economical and technical constraints. In particular, decisions concerning the operation of existing nuclear power stations and the construction of new ones require the study of very long-range planning problems. A management game is described which takes this aspect into consideration. The model simulates a utility over a period of 16 years. At the beginning of the simulation, the electrical energy requires the construction of new generation and transmission facilities. The discussion of the management game covers the following aspects: the definition of various objectives for the model; the choice of decision areas to be covered; the selection of decisions to be trained; the setup of the tutorial role of a game-monitoring person (teacher); the definition of boundary values for every game parameter; and the model development. The second part of the paper describes the implementation of the management game. The initial conditions and the boundary parameters have to be defined by the teacher at the beginning of the simulation. For every year, a number of financial and technical decisions have to be taken, keeping the a priori specified objective of the simulation in mind. Since the different submodels are heavily interconnected, each decision requires a detailed analysis of the results obtained in the previous year. These results are given annually in a balance sheet and a summary of the electrical-economic results. The third part of the paper contains a discussion of typical results which have been obtained from practical applications of the management game. The concluding remarks address the benefits and limits of the simulation approach towards energy management decisions.