Models of Risk Measurement and Control in Power Generation Investment

In the electricity market environment, Power generation companies are faced with much uncertainty and greater risks. It is a realistic problem for power generation companies to optimize their investment decisions and minimize risks in investment of engineering projects. In this paper, Conditional Value at Risk (CVaR) measurement techniques are used to establish models of risk assessment and risk control for power generation companies to invest under multi-markets and multi-types power units. Optimization models of risk control based on two criterions can be used by power generation companies in different electricity markets and different types of power generation units to distribute there investment in order to maximize benefits and minimize risk value. The case demonstrates the validity of these models.