Supersized energy business simulation
The liberalized energy market is a volatile environment. Communication and agreement are just as important as the electricity itself. Constant contact between the market players – grid operators, consumers, producers and the regulator – is necessary.
In an electricity market characterized by increasingly complex problems, solutions that are ever more ingenious and flexible are needed. The need to test out new operating strategies and network philosophies within an organization is consequently growing all the time. Electricity storage has substantial added value for the energy sector. Storage increases the technical reliability of energy supplies. Storage stabilizes the cost price of electricity and contributes to the reduction of CO2 emissions.
FleXnet is a business simulation consisting of a game board plus software, supported by professionals who know the energy market through and through. In a first for this industry, FleXnet links technology to policy and to human response. On the game board, an electricity grid is built up from a starting situation, complete with production and consumption units. The players can then simulate planned and unplanned events and thirdparty developments, and see what impact they have theire own ideas and strategies. The software calculates the resulting energy and cash flows, bringing every overload and penalty to light.
DNV KEMA developed a 50 m2 board to get hundreds of people in a congress hall in the right frame of mind to come up with ideas for making the way we live more sustainable. Our FleXnet XXL business game is a successful tool for getting a lot of people to think about the consequences of energy planning decisions. Eight characteristic groups of producers, consumers and network operators are asked to make various decisions under the watchful eye of the regulator. The network operators have to decide how much to invest, whether to use energy storage, and what level of reliability to plan for. The consumers and producers are asked to say what they are prepared to pay, whether they want wind power or conventional production, and which network operator suits them best.
Aided by computer models, the players are subsequently shown the consequences of their choices in terms of network load and outages, as well as the impact on market prices and their own revenues. During three rounds, the teams steadily refine their strategies.
The business simulation makes it possible to gain insight into the complexity of the energy sector and its players. The tension between regulation, economics and technical issues becomes transparent.
DNV KEMA, the Netherlands
Duration: March 2009 – Ongoing