Uncertainty is inherent in the planning of electric power systems, an issue with which electric companies have grappled for decades when developing long-term resource portfolios. This primer provides an overview of techniques used in electric company resource planning to consider uncertainty, and guidance to implement one of the most common techniques in practice today to manage uncertainty and develop robust portfolios—Monte Carlo-based stochastic analysis. The material within is targeted towards electric company planners tasked with developing a long-term resource plan with an interest in integrating an industry-standard approach for considering stochastics but without significant prior experience with such techniques. The information can also be used by other internal company or external stakeholders who simply wish to learn more about stochastics and risk management as applied to electric company resource planning.
Authors Nidhi R. Santen, Rachel Moglen, and Dheepak Krishnamurthy