Optimal fuel and emission acquisition contracts using a supply chain model

For an electric power system to meet the demand for electricity depends not only on subsystems of generation, transmission and distribution, but also on the ability to supply primary energy sources such as natural gas, oil and coal. The effects of a contingency in some of the subsystems, including supply networks, can propagate and affect system operations in terms of availability and price. In a vertically integrated industry the operation of electric power systems has omitted energy supply aspects and the use of financial instruments as part of trade policy. In this paper a supply chain model is used to analyze the acquisition of fuel contracts for generating units. Numerical examples are provided.