ORFEUS: (Operational Risk Financialization of Electricity Under Stochasticity) Software
Loudon Energy Analytics has obtained the exclusive global commercial rights to the ORFEUS software developed by Princeton University under the DOE ARPA-E funded Perform Project.
Princeton University | arpa-e.energy.gov
The ORFEUS: (Operational Risk Financialization of Electricity Under Stochasticity) software models the uncertainty associated with the increased penetration of intermittent resources. ORFEUS performs Monte Carlo Simulations to calculate statistical historical forecast versus actual deviations to calculate a system-wide Conditional Value at Risk (CvaR) risk measure. It then assigns risk allocations (using Shapley values) to individual assets according to contributions to the overall system risk. The ORFEUS software uses these risk allocations to reinform the unit commitment algorithm to reduce tail risks and position the system for better overall reliability. The ORFEUS methodology has been submitted for a pending patent application.
ORFEUS Applications
Storage revenue optimization
ORFEUS may be used to structure a market revenue maximizing bidding strategy for a storage asset. ORFEUS identifies Locational Marginal Price (LMP) spikes and troughs in space and time to identify optimal battery discharging and charging locations and times. ORFEUS schedules a storage unit in the day-ahead market for the hours where the risk of not meeting demand (and the LMP) is highest as predicted by our stochastic model, e.g. a four-hour battery will be scheduled for the 4 hours where the estimated risk of not meeting load (and LMP) is the highest. Conversely, ORFEUS charges the storage unit for the hours where the risk of not meeting demand (and the LMP) is lowest as predicted by a stochastic model thereby minimizing the cost of charging the battery. For the real-time market, ORFEUS can inform when it is prudent for the storage owner to deviate from the day-ahead bid to capture revenues from price spikes which may develop in real time. ORFEUS may also be used in the planning stage to inform where to best locate new battery facilities and with what characteristics (capacity, energy duration, cycling profile) in a particular regional market.
Calculation of Locational Marginal Emission Rates associates with Storage
ORFEUS calculates Locational Marginal Emission rates (LMEs), in parallel with the Locational Marginal Prices. Each time a battery bidding strategy is implemented, ORFEUS may be used to identify the production assets on the margin which determines the Locational Marginal Rate. The Locational Marginal Emission rates calculated by ORFEUS may be used to quantify the emission impact of the battery charging or discharging.
Bidding Strategy for Renewable Resources
Owners of renewable assets may use ORFEUS to determine if taking a day ahead position informed by the risk indices for the reliability of the renewable production may be superior to being a passive price taker in the real time market. Renewable project developers may also use ORFEUS in the planning stage to evaluate site specific revenue estimates for potential sites.
Bidding Strategy for Conventional Resources
With added volatility of locational marginal prices (LMPS) introduced by increasing levels of intermittent renewable resources, existing bidding strategies adopted by conventional resources may become suboptimal over time. Asset owners of conventional generation fleets may opt to use ORFEUS to evaluate future revenue profiles of their existing assets and fine tune their day-ahead and real-time bidding strategies.