Power Market Analysis

Power Market Analysis 2017-08-29T14:22:41+00:00

POWER MARKET ANALYSIS

FEP utilizes its proprietary models (FCAP and FGEN) and power plant databases to enhance the fundamental model, arriving at a more accurate representation of the opportunities and risks that you face.

Power Market Analysis

Filsinger Energy Partners has taken market modeling to a new frontier. Models are only as good as the insights and information that go into them. Most databases that feed market models are based on readily available, mass-consumption information. FEP’s models, on the other hand, are developed from our high-level market insights and are based on data that we scrub to the smallest detail. We analyze and research market and regulatory details to enhance the data with our personal insights and industry experience. When FEP conducts your analysis, you get more than a software-generated chart. You get our deep market insights and knowledge.

The result: models that more accurately represent reality and the risks that you may face.

Business Cycles

Energy markets have historically demonstrated a cyclical nature, much like other capital intensive sectors. To capture this cyclicality, FEP’s models apply a proprietary business cycle methodology to the capacity compensation projection. This business cycle concept reflects the natural succession of cyclical periods of overbuild followed by recovery periods as the market responds to economic signals. By comparison, other energy consultants’ models do not take into account the cyclical nature of the energy market.

Capacity Compensation

Capacity Compensation Graph

Simply put, FEP utilizes its proprietary models (FCAP and FGEN) and power plant databases to enhance the fundamental model, arriving at a more accurate representation of the opportunities and risks that you face.

AURORAxmp

FEP utilizes the AURORAxmp model, licensed from EPIS, LLC, scrubbed and updated with our own market insights.

AuroraXMP Logo

FCAP:
FEP’s Capacity Compensation Model

After accounting for the unit-specific energy revenues projected by FEP’s fundamental model, FEP calculates the additional compensation required by the marginal unit to break even.

This additional compensation includes compensation that may be earned through:

  • Regional capacity markets
  • Ancillary services markets
  • Scarcity pricing
  • Bilateral contracts

The available sources of compensation vary by region and market.

AURORAxmp and FCAP Compensation Models

FGEN: FEP’s Stochastic Dispatch Model

FEP developed a proprietary and stochastic dispatch model called FGEN to forecast and optimize the profits of energy assets. FGEN accurately captures the extrinsic value associated with natural gas peaker and combined cycle units.

FGEN forecasts theoretical market price trajectories, including the stochastic effects of volatility and mean-reverting jump diffusion processes to project possible unit dispatch and revenues based on the market prices derived in AURORAxmp.

FGEN incorporates unit-specific assumptions:

  • Heat rate curves
  • Seasonal variances
  • Ramp rates
  • Minimum and maximum up/down times

FGEN more accurately represents unit operations and dispatch than is possible using traditional market models.

For more information, please contact us directly at 303.974.5884, or email us.