Mercados provided support to both generators and consumers on the future market price forecast based on the market simulation. This helped clients with their purchase / sale strategy to entities planning to sell electricity as a merchant generator or align their PPAs in line with the future market prices to discover the optimal decision making. Based on the same suitable power sale / purchase options were also identified considering the variability in prices in light of the demand pattern and renewable penetration growth.
The Long-term price forecasts and expected PPA tariffs are based on the simulation that considers the underlying economics of the generating station. The model simulates the operation of power system and calculates the System Marginal Prices (SMPs) until the required year (e.g. 2050) at an half-hourly level by reproducing the typical approach a system operator would prefer to do. The output to the simulation serves as a benchmark price in consideration of the alternative strategies viz. sale of power on the spot market as merchant power plant.
The inputs to simulation includes all the relevant technical and financial factors influencing the operation of existing generating assets (Thermal, Nuclear and Renewable) along with upcoming power plants, transmission flows at both the regional and plant level were taken into account in addition to demand profiles, demand-side flexibility, fuel costs, storage, EV penetration, as well as cross-border trade with the neighbouring countries based on the current and under-development interconnections and their energy demands.
The above comprehensive assessment supported many clients in development of a tailored approach for a merchant generator or in signing a PPA. The insights helped many Clients to gauge investment returns and paybacks and supported in strategic decision.