Generation Asset Valuation
We use several modeling tools to provide clients with asset valuations tailored towards their specific needs. We focus our modeling to capture market fundamentals using high quality inputs in all types of valuations.
- Virtual Dispatch Models against Recent/Futures Prices: We use our PSO model to dispatch a specific unit against energy and ancillary service price forecasts. We are also able to model the unit dispatch against both day-ahead and real-time prices, which captures a valuable revenue stream that many dispatch models do not account for. The model outputs the expected plant operations and revenues over the modeled time period. We typically develop the energy and ancillary service price series inputs using both recent historical and future settlement prices and accounting for any known shifts in market fundamentals.
- Nodal Market Simulation Models: We employ several nodal market simulations tools for asset valuations to simulate the long-term impacts of changing market fundamentals, including new limitations on generating resources, variability of fuel prices, and changing transmission capabilities and congestion patterns. This assessment is particularly useful to assess the value of assets in light of market changes.
- Long-Term Planning and Capacity Expansion/Retirement Models: These models determine the value of an asset over 20 to 30 years by capturing expected shifts in system resource mix and market trends. We use this valuation method to determine the expected value of an asset over its operating life.
- Coal Plant Economic Viability Model: This model is used to assist clients in assessing the optimal timing of economic retirement and asset valuation for existing coal units. The model takes into account the operating costs, market revenues, replacement power costs and timing of decommissioning for coal plants owned by merchant entities or rate-regulated utilities, and evaluates the retirement economics as a function of optimal unit commitment dispatch against future wholesale power prices.