The power industry has come a long way from the days when any mention of “power plant optimization” largely referred to ongoing efforts to streamline the generation of electricity from coal-fired plants and maximize the associated benefits. The political and social construct of the 1980s demanded the engineering of advanced coal-based technologies that would effectively and efficiently maximize coal utilization while achieving financial and environmental goals. While the latter continue to drive current discourse, coal as a fuel is becoming a relic of a bygone era, having lost its profitability appeal and its support amongst much of the general population. 

Although the focus of generation assets optimization has changed from mostly coal, the intrinsic meaning has achieved greater significance and complexity. Optimizing a single generating plant—even a coal-fired one with a long history of usage data to rely on—has never been an easy proposition. Now, we have power generation fleets that are made up of everything from renewable resources (with their intermittency), nuclear, natural gas, and coal-fired plants, and in some cases hydro as well. There’s also the added layer of the changing legislative and consumer behavior landscapes that largely prefer environmentally-friendly resources. The fact that this preference is somewhat at odds with the public demand for uninterruptible power supply does not help matters. A combination of these factors make optimization and scalability across an entire generation fleet a daunting, nearly impossible undertaking. 

In addition, today’s business managers are faced with highly competitive bulk power markets with diverse emissions rules, renewable portfolio standards goals (RPS), ever-changing fuel prices, and the realization that they have to stop operating power plants in the way they were designed to be operated. This scenario is exacerbated by the fact that, nowadays, the ability to run a profitable power generation business means much more than maximizing capacity output from a generation fleet. It demands best-in-class generation planning and a bid-to-bill enterprise software solution that provides:

• A sneak peek at the upcoming power markets—Day-Ahead (DA) and Real-Time (RT)
• A deep understanding of the competitive landscape across multiple ISOs, RTOs, and even, Energy Imbalance Markets (EIM) 
• A complete analysis of how much generation would be required to efficiently meet load demands according to contractual obligations—this entails optimizing generation assets to identify dispatch offerings at the lowest possible cost 
• The capability to scale overall generation across the entire fleet, and, more importantly, maximize profits from excess generation—which by itself demands a knowledge of prevailing market conditions, an in-depth analysis of profit and loss (P&L), and an offer strategy that guarantees the highest return

In the face of these requirements, the kinds of technologies that were once devoted towards optimizing coal-fired plants would now appear ludicrous, especially in today’s power markets with mixed generation resources, including those owned by end-users. This has made the development of advanced technologies that would successfully provide the kinds of benefits outlined above very complex. Merchant generators should therefore exercise a high degree of caution in choosing a technology partner that would help change the profitability story of their generation fleets. They should look to a vendor with proven technologies in bulk power markets. This is critical, because in an era of declining profits, power generation executives cannot afford to make a mistake in choosing a tool that has a direct impact on revenues and profitability.

OATI is best equipped to help here, given the success of its solutions in bulk power markets and across the entire energy industry spectrum. In order to resolve the many challenges faced by merchant generators looking to minimize generation costs and maximize profits, OATI has developed a generation optimization software tool called webSmartBid. Built on an algorithmic optimization engine with built in  generation planning, advanced analytics, and integration capabilities, OATI webSmartBid brings a new, simple, and intuitive bid/offer management strategy for generation assets. This solution also gives merchant generators an edge in analyzing profitability and deciphering the least-cost supplies within their generation mix to meet their contractual obligations, like load and reserve requirements. 

OATI webSmartBid also has benefits that generation owners should look for in their next market solution. When you add other functionalities like seamless integration with OATI webTrader for wholesale power market management, easy simulation of bids and offers, after-the-fact forensic analysis of actual market results to quantify P&L leakages, and its powerful reporting functionality, what you have is a solution that is built to respond to the time-sensitive needs of business leaders. This makes OATI webSmartBid a must-have for generation owners looking to maximize the profitability of their generation fleets.