Reserve estimation of an open pit mine under price uncertainty by real option approach

Reserve estimation is a key to find the correct NPV in a mining project. The most important factor in reserve estimation is the metal price. Metal price fluctuations in recent years were exaggerated, and imposed a high degree of uncertainty to the reserve estimation, and in consequence to the whole mine planning procedure. Real option approach is an efficient method of decision making in the uncertain conditions. This approach has been used for evaluation of defined natural resources projects until now. This study considering the metal price uncertainty used real option approach to prepare a methodology for reserve estimation in open pit mines. This study was done on a copper cylindrical deposit, but the achieved methodology can be adjusted for all kinds of deposits. This methodology was comprehensively described through the examples in such a manner that can be used by the mine planners.

Investing and Pricing with Supply Uncertainty in Electricity Market:A General View Combining Wholesale and Retail Market

Renewable energy,such as wind and solar energy,may vary signifi cantly over time and locations depending on the weather and the climate conditions.This leads to the supply uncertainty in the electricity(power) market with renewable energy integrated to power grid.In this paper,electricity in the market is classified into two types:stablesupply electricity(SSE) and unstablesupply electricity(USE).We investigate the investment and pricing strategies under the electricity supply uncertainty in wholesale and retail electricity market.In particular,our model combines the wholesale and retail market and capture the dominant players,i.e.,consumers,power plant(power operator),and electricity supplier.To derive the market behaviors of these players,we formulate the market decision problems as a multistage Stackelberg game.By solving the game model,we obtain the optimal,with closedform,wholesale investment and retail pricing strategy for the operator.We also obtain the energy supplier's best price mechanism numerically under certain assumption.We fi nd the price of SSE being about 1.4 times higher than that of USE will benefi t energy supplieroptimally,under which power plant's optimal strategy of investing is to purchase USE about 4.5 times much more than SSE.

Collaborative robust dispatch of electricity and carbon under carbon allowance trading market

The launch of the carbon-allowance trading market has changed the cost structure of the power industry.There is an asynchronous coupling mechanism between the carbon-allowance-trading market and the day-ahead power-system dispatch.In this study,a data-driven model of the uncertainty in the annual carbon price was created.Subsequently,a collaborative,robust dispatch model was constructed considering the annual uncertainty of the carbon price and the daily uncertainty of renewable-energy generation.The model is solved using the column-and-constraint generation algorithm.An operation and cost model of a carbon-capture power plant(CCPP)that couples the carbon market and the economic operation of the power system is also established.The critical,profitable conditions for the economic operation of the CCPP were derived.Case studies demonstrated that the proposed low-carbon,robust dispatch model reduced carbon emissions by 2.67%compared with the traditional,economic,dispatch method.The total fuel cost of generation decreases with decreasing,conservative,carbon-price-uncertainty levels,while total carbon emissions continue to increase.When the carbon-quota coefficient decreases,the system dispatch tends to increase low-carbon unit output.This study can provide important guidance for carbon-market design and the low-carbon-dispatch selection strategies.

Locational Pricing of Uncertainty Based on Robust Optimization

With the increasing penetration of renewables,power systems have to operate with greater flexibility to address the uncertainties of renewable output.This paper develops an uncertainty locational marginal price(ULMP)mechanism to price these uncertainties.They are denoted as box deviation intervals as suggested by the market participants.The ULMP model solves a robust optimal power flow(OPF)problem to clear market bids,aiming to minimize the system cost as a prerequisite that the reserve margin can address all the relevant uncertainties.The ULMP can be obtained as a by-product of the optimization problem from the Lagrange multipliers.Under the ULMP mechanism,renewables and consumers with uncertainty will make extra payments,and the thermals and financial transmission right(FTR)holders will be compensated.It is further shown that the proposed mechanism has preferable properties,such as social efficiency,budget balance and individual rationality.Numerical tests are conducted on the modified IEEE 5-bus and 118-bus systems to demonstrate the merits and applicability of the proposed mechanism.