New developments regarding the use of simulation modeling to the planning of electricity supply

In the spring of 1972, the Bell Journal of Economics and Management Science published a paper by Dennis Anderson which formulated the electricity supply investment problem in cost minimization form and went on to review various approaches used to find optimum solutions to the problem. Anderson pointed out that the investment problem is simply a statement of the investor's objective to minimize the sum of capital and operating costs over some future time period, given the existence of several important constraints. Anderson observed that the various approaches used to solve the investment problem could be categorized into three different classes: marginal analysis, marginal analysis using simulation, and global models. Much of what has happened over the last three years regarding the second of these categories, the use of simulation techniques in the planning of electricity supply, is reviewed. 51 references. (U.S.)