Informs Annual Meeting 2017

TC79

INFORMS Houston – 2017

2 - Evaluating an Interconnection Project: Do Strategic Interactions Matter?

3 - China’s Synergy Degree of Water-energy-food Nexus Basing on Entropy-based Collaboration Model Guijun Li, Professor, Central University of Finance and Economics, 39th South College Road, Haidian District, Beijing, 100081, China, ligj@cufe.edu.cn, Yulong Li, Daohan Huang The collaboration development of water, energy and food resources is vital to achieve sustainability in China. Basing on interactions in the processes of production, consumption and management, this paper first builds the index system at the country level. And then using the index system, a collaboration model basing on information entropy is adopted to calculate the synergy degree of water-energy-food nexus (WEF-Nexus) in China between 2002 and 2015, together with the order degree of subsystems and the development level of WEF- Nexus. Results show that the synergy of WEF-Nexus in China is uptrend from severe disorder to coordination during 2002-2015, and is also sensitive to external drivers. 4 - Biosystems Characterization, Modeling and Optimization Yazeli E. Cruz-Rivera, The Applied Optimization Group, UPRM, PO Box 9000, Mayaguez, PR, 00681, United States, applied.optimization@gmail.com, Clara Isaza, Steven Mirsky, Mauricio Cabrera-Ríos In everyday life, we are surrounded by systems of living organisms that can influence the behavior of other living organisms, i.e. by biosystems. Biosystems encompass topics from agriculture to health diseases. There is a need for interdisciplinary work to better understand, represent, and make competitive decisions in regards of these systems. In this work biosystems understanding is sought through statistical characterization, representation through statistical modeling, and decision-making through optimization, all within a biological framework. Two biosystems are studied: hairy vetch as a cover crop for corn, and the identification of important genes in Alzheimer’s Disease. 5 - Extended Kalman Filter for Predicting Sustainability Kemal Gursoy, Assistant Professor of Professional Practice, Rutgers University, 100 Rockafeller Road, Building A, Room 5146, Piscataway, NJ, 08854, United States, kgursoy@business.rutgers.edu In order to survive, we must learn how to measure the magnitude of the impact we make to our environment and predict the change in our environment. This brings an immense challenge of collecting facts, and extracting sufficient, reliable, information from this incoming stream of immense amount of observations. In this work, we present an extended Kalman filter for predicting sustainability. 381B Application of OR and Analytics in the Energy Sector Invited: OR and Oil and Gas Invited Session Chair: Peter Schipperijn, Chevron, Houston, TX, 77002, United States, apsc@chevron.com 1 - Asset and Project Valuation from Portfolio Optimization Anthony Kenck, Chevron, Houston, TX, United States, anrk@chevron.com, Mal Wright, P. Val Kranak The efficient frontier concepts developed by Markowitz, which compare return to standard deviation are of marginal use for most corporations in their decision- making. Executives are faced with more mundane tradeoffs, such as evaluating the difference between investing for growth vs striving for return on capital. We show an approach to balance competing objectives in order to ascertain the portfolio value of an asset or investment opportunity. The portfolio value of an opportunity is a function of the opportunity itself, portfolio requirements, constraints, and the inventory of opportunities. This framework can also be used when the information around a given opportunity is sparse. 2 - Application of Data Science in Chevron Upstream Sector Yuanbo Lin, YLCV@chevron.com Chevron has been leveraging data science to drive functional excellence and deliver business value in the upstream sector over the past several. This talk will showcase advanced modeling and analytics in addressing challenges in upstream activities like drilling, completions, asset development, and operations. The associated business value and impact will be highlighted for the four use cases discussed. We attribute much of the success to management support, close collaboration between business and analytics team, and a clear value-driven approach. TC79

Sebastien Debia, GERAD / HEC Montreal, 6100 Avenue Wilderton, Montreal, Canada, sebastien.debia@hec.ca, David Benatia, Pierre- Olivier Pineau High-Voltage Direct Current (HVDC) merchant transmission lines allows trade across separate power markets and often in different countries. The flows on existing cross-border lines are often assessed as suboptimal, which may be due to the light regulation that often prevails in this case. We use a two-stage game formulated as an Equilibrium Problem with Equilibrium Constraints (EPEC) to model the strategic trade between the New York (US) and Quebec (Canada) systems. The impact of trade on local price levels may be of concern and calls for the functional unbundling of traders and generators. 3 - The Impact of Forward Contracts on Market Equilibrium in Renewable Energy Policy Ryo Ito, 7416606@ed.tus.ac.jp, Ryuta Takashima Recently various policies for reducing greenhouse gas emissions have been implemented by concerns about global warming. Those policies include schemes for promoting renewable energy such as feed-in tariff, feed-in premium, and renewable portfolio standards. Those policies directly impact the power prices by favoring power produced by renewables. On the other hand, it is shown that forward contracts mitigate market power in Allaz and Vila (1993). In this work we investigate a relationship between forward contracts and renewable energy policy for the competitive equilibrium. We show an effect of forward contracts and renewable energy scheme on market power on the spot market. 4 - Enhanced Representative Days and System States Modeling for Energy Storage Investment Diego Tejada, Universidad Pontificia Comillas, Comillas, Spain, diego.tejada@iit.comillas.edu In this work, we analyze the impact of different options to represent the operation decisions in the study of energy storage (ES) investment for long-term planning models. We compare the representative days and the system-states approaches for the representation of these operation decisions. We proposed enhanced versions of these approaches to improve the ES investment approximation. An Spanish case study is evaluated and the results are used to identify the potential profits that energy storage investment can obtain. 380B Technology Management Contributed Session Chair: Kemal Gursoy, Rutgers University, Piscataway, NJ, United States, kgursoy@business.rutgers.edu 1 - Research on Synergy Degree Between Tech-innovation and Sci-tech Capital Yanqiu Song, Central University of Finance and Economics, Haidian, 39th South College Road, Beijing, China, sunny_syq@163.com, Chang Yuan, Li Huijia The coordinated development of technology innovation and capital is vital to achieve high industry value in China. Interactively considering the technology outcome and investment performance, this study aims to measure the synergy degree of 30 provinces( autonomous regions and municipalities) in China between 2000 and 2013. A synergy degree measure model based entropy is adopted to calculate the order degree of each sub-system and evaluate the coordinated situation of the integral system. The results show that the synergy between tech-innovation and sci-tech capital system shows a downward trend. There isn’t mutually promoting coordinated development mechanism in China. 2 - Game Theoretic Approach in Capacity and Production Decisions for Indium Sang-Phil Kim, Winona State University, Somsen 406, Winona, MN, 55987, United States, Ksphil@me.com, Chul Hun Choi, Jinjian Cao, Seokcheon Lee, Fu Zhao Clean energy technologies, a solution to global warming challenge, require some rare materials and concerns about their rapid increasing demand have been raised recently. Indium, critical for thin-film solar photovoltaic and LED lighting, is one of the materials. Moreover, it is a by-product of zinc production thus the supply heavily relies on the production quantity of zinc. Therefore, simultaneous decisions in capacity and production quantity for both materials are necessary for sustainable supply of indium. Game theoretic approach (under duopoly market condition) is applied to seek the equilibrium values for capacity and production quantity of both materials in different market scenarios. TC78B

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