Dealing with Uncertainty: An Example in Electricity Production Planning

Abstract

In this chapter, we describe an application that was the theme of a research collaboration between an academic institution and a large company in charge of the production and distribution of electricity. We do not give an exhaustive description of the work that was done and of the decision-aiding tool that was developed. A detailed presentation of the first discussions, of the progressive formulation of the problem, of the assumptions chosen, of the hesitations and backtrackings, of the difficulties encountered, of the methodology adopted and of the resulting software would require nearly a whole book. Our purpose is to point out some characteristics of the problem, especially on the modelling of uncertainties. The description was thus voluntarily simplified and some aspects, of minor interest in the framework of this book, were neglected. The main purpose of this presentation is to show how difficult it is to build (or to improvise) a pragmatic decision model that is consistent and sound. It illustrates the interest and the importance of having well-studied formal models at our disposal when we are confronted with a decision problem. Sections 8.2 and 8.3 present the context of the application and the model that was established. Section 8.4 is based on a didactical example: it first illustrates and comments some traditional approaches that could have been used in the application; then it gives a detailed description of the approach that was applied in the concrete case.