2015 Informs Annual Meeting

SA57

INFORMS Philadelphia – 2015

SA57 57-Room 109B, CC Real Options in the Energy Sector Sponsor: ENRE – Energy I – Electricity Sponsored Session Chair: Afzal Siddiqui, University College London, Department of Statistical Science, Gower Street, London, UK, WC1E 6BT, United Kingdom, afzal.siddiqui@ucl.ac.uk 1 - Structural Estimation of Real Switching Options in Peak Power Plants Stein-erik Fleten, NTNU, Industrial Economics and Technology mana, Trondheim, Norway, Stein-Erik.Fleten@iot.ntnu.no, Carl J. Ullrich, Erik Haugom, Alois Pichler Peak power plants have high operating and maintenance costs when kept ready to operate. Therefore, plant managers sometimes put their plants in a standby state, or retire them. Using structural estimation, we estimate the maintenance cost for the operating states (operating ready, standby) and switching costs for startup, shutdown and retirement actions. Our approach extends recent contributions in structural estimation, combining nonparametric statistics with nonlinear programming. 2 - Real Options Analysis of Investments in Flexibility Measures for Gas-fired Power Plants Reinhard Madlener, RMadlener@eonerc.rwth-aachen.de, Barbara Glensk, Christiane Rosen Conventional power generation will remain important for quite some time for balancing electricity demand and supply. We propose a real options model for the flexible operation of existing gas-fired power plants, enabling to study the optimal timing of investment and valuation of alternative flexibility measures. We use the spark spread for valuing the flexible plant operation in light of different load levels and corresponding efficiency factors. The proposed model is applied to a case study. 3 - Capacity Mechanisms and Investment Decisions in Electricity Market Ryuta Takashima, Tokyo University of Science, 2641 Yamazaki, Noda-shi, Chiba, Japan, takashima@rs.tus.ac.jp, Yuto Takano, Naoki Makimoto, Yuji Yamada The power producers can sell their generating capacities kWe in a market of the capacity or via a bilateral contract by means of a capacity mechanism. In this paper, we consider an investment problem of capacity expansion taking into account a scheme of the capacity mechanisms. We analyze an investment timing for different ratios of selling the capacity. In addition, we compare the investment timing for the standard energy-only market with that for the capacity market. 4 - Transmission and Power Generation Capacity Investment under Uncertainty Verena Hagspiel, Norwegian University of Science and Technology, Alfred Getz vei 3, Trondheim, Norway, verena.hagspiel@iot.ntnu.no, Afzal Siddiqui, Jannicke Sletten, Nora Midttun In a decentralized electricity market transmission system operators must anticipate the investment behaviour of power companies when deciding on investment transmission-capacity expansion. We propose a novel RO model that captures both the investment decisions of a TSO and power companies allowing to account for the conflicting objectives of the distinct agents and study how potential generation expansion affects the optimal timing and sizing of transmission expansion.

4 - A Majority-judgment-based Multi-criteria Consensus Building Method Chiwei Yan, Massachusetts Institute of Technology, 77 Massachusetts Avenue, E40-130, Cambridge, United States of America, chiwei@mit.edu, Michael Ball, Vikrant Vaze, Prem Swaroop, Cynthia Barnhart We propose a multi-criteria consensus building method based on Majority Judgment proposed by Balinski and Laraki recently. This problem setting originally stems from strategic air traffic flow management, but is applicable to a wide range of social choice problems. We propose two methods: 1) a multi-round estimation approach and 2) a single-shot robust approach to find majority winner under this setting. Case studies from real-world applications demonstrate the effectiveness of our approach.

SA56 56-Room 109A, CC Hub Location Sponsor: Location Analysis Sponsored Session

Chair: Sibel Alumur, University of Waterloo, 200 University Avenue West, Waterloo, ON, N2L 3G1, Canada, sibel.alumur@uwaterloo.ca 1 - Models and Algorithms for Robust Hub Location Ivan Contreras, Concordia University and Interuniversity Research Center on Enterprise Networks, Logistics and Transportation (CIRRELT), H3G 1M8, MONTREAL, Qu, Canada, ivan.contreras@cirrelt.ca, Jean - Francois Cordeau, Carlos Zetina In this talk we present robust hub location problems in which uncertainty is associated with demands and flow costs. We study three robust counterparts of the uncapacitated hub location problem with multiple assignments. The first focuses on demand uncertainty, the second one deals with flow cost uncertainty and the third one considers both demand and flow cost uncertainty. We present mathematical models and exact algorithms for each one of these variants. Computational experiments are reported. 2 - On Single-allocation P-hub Median Location Problems with Flow Thresholds-based Discounts Armin Lüer Villagra, Universidad Andres Bello, Engineering Sciences Department, Antonio Varas 880, Piso 6, Providencia, Santiago, Chile, armin.luer@unab.cl, H A Eiselt, Vladimir Marianov Appropriate modeling of economies of scale on hub and spoke networks is an active research trend. We present a single allocation p-hub location problem where a fixed discount is applied to the flow in an arc if it exceeds a fixed threshold, and the inter-hub network can be incomplete. We solve using standard software and literature instances. Aggregated performance indicators are used to analyze and compare solutions. The results show the appropriateness of our model. 3 - Hub Network Design in Air Transportation Armaghan Alibeyg, Concordia University and Interuniversity Research Center on Enterprise Networks, Logistics and Transportation (CIRRELT), 1455 de Maisonneuve Blvd. West, Montreal, QC, H3G 1M8, Canada, a.alibeig@gmail.com, Elena Fernández, Ivan Contreras We present a class of hub network design problems that consider a profit-oriented objective. Potential application arise in the design of air transportation networks, where companies need to determine not only the location of hub facilities but also the design of the hub network. This class of problems considers the simultaneous optimization of the collected profit, the setup cost of the hub network and the transportation cost. 4 - The Design of Capacitated Intermodal Hub Networks with Different Vehicle Types Sibel Alumur, University of Waterloo, 200 University Avenue West, Waterloo, ON, N2L 3G1, Canada, sibel.alumur@uwaterloo.ca, Elif Zeynep Serper We determine the locations and capacities of hubs, which transportation modes to serve at hubs, allocation of non-hub nodes to hubs, and the number of vehicles of each type to operate on the hub network to route the demand between origin- destination pairs with minimum total cost. A mixed-integer programming model is developed and a local search heuristic is proposed. Computational analyses are conducted on the Turkish network and CAB data sets.

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