THE DYNAMICS OF STRATEGIC ELECTRICITY-TRADING

摘要

As electricity markets are turning competitive, uncertainty becomes a majorthreat to trading companies. In this environment a single strategic intent seemsinappropriate as important endogenous and exogenous variables are notpredictable and may have important negative impact on the company’sperformance.In this paper, we undertake Markides’ idea of a portfolio of strategies (2000,2001) and apply it to the electricity trading industry. We explore the viability ofthis approach, that embeds feedback thinking, by using a system dynamicsmodel for a hypothetical electricity market. We use Porter’s competitiveadvantage framework and apply it to three generic strategies in order toexamine the idea of a portfolio of strategies. We describe the SD model that wasdeveloped for this purpose and present simulation results.