REQUEST FOR OFFERS

Subject: Procurement of Mathematical

Models for Electricity and Gas markets

THE REGULATORY AUTHORITY FOR ENERGY (RAE)

OF THE HELLENIC REPUBLIC
acting on its authority based on Law 2773/1999.

INVITES

interested accredited firms, universities, public bodies or consortia (hereafter

referred to as “the Consultant”) to submit proposals concerning the
Procurement of Mathematical Models for Electricity and Gas markets.

1. Project Objective and Scope

1.1 The Regulatory Authority for Energy of the Hellenic Republic (RAE),
established by law 2773/99 as an independent public administrative Authority
with competence over the whole of the energy sector, wishes to purchase
software codes that implement generic mathematical models that simulate the
operation and optimize the planning of the electricity and gas markets. The
codes will be used for public policy purposes and will not be used for any
commercial purpose.

1.2 The software and the models will be implemented at RAE computer
systems and will be used by RAE personnel. RAE should own and control the
software-models and will carry out, without the help of the Consultant, the
application of the codes to the Greek energy system. RAE will also carry out
data collection, maintenance of data and policy applications, without the help
of the Consultant.

1.3 The Consultant will be responsible to:

 Provide the software codes and the models to RAE accompanied with all the
necessary licenses for the exclusive and unlimited use within RAE
 Install the software and codes at RAE computer system and test their good
operation
 Provide a short training course to RAE personnel regarding the use of the
software and codes
 Provide software maintenance, license renewal and on-line (or off-line) help
program

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1.4 The software-codes must be generic and user-friendly to allow third
persons the development of specific applications. The Consultant may not
offer access to the source code or include such an offer as an option. In any
case, all the details of the mathematical calculations, algorithms and
economic underlying the software models must be transparent and well
documented.

2. Description of Software codes and models

RAE requires the offer to meet the following requirements.

2.1 Electricity Planning and Operation Models

The model or system of models must cover integrated resource-planning

model with chronological production costing capability over multiple annual
time periods. It should perform
 Demand-side planning and forecasting,
 Optimal generation planning for all possible types of power generation
technologies considering existing power plants as discrete units,
 Dispatching hydroelectric plants and renewable plants
 Inclusion of environmental constraints
 Production costing and financial projections
 Operation within a single integrated environment using a common database.
 Flexible, user-friendly, Windows-based, graphic user interface.

Model extensions must be offered as follows:

 A model suitable for simulating multi-area operations and performing market
and network transmission analysis, combining a market model for pricing of
energy and ancillary services with an Optimal Power Flow program using an
AC load flow algorithm to accurately simulate the competitive electricity
markets and the system operations.
 A merchant plant analysis model extension allowing assessment of new
entrants and their impacts on future prices and grid operations, determining the
timing, location and capacity of the new entrants most likely to participate and
succeed in a competitive electricity market. In addition, it should model the
replacement or renovation of existing thermal generating units to improve
their efficiency to meet emission limits.
 Ancillary Service Model identifying the generation that is qualified to provide
ancillary services to provide energy if its spark spread (the excess of the
energy price over its incremental fuel costs) exceeds the price of reserve
services. Thus, opportunity costs drive bidding while these opportunity costs
are themselves based on simulated energy and ancillary service prices.

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2.2 Gas Planning Model

The Gas Model should simulate the daily operation of a gas utility system to
meet the forecast demand. The gas system should be modelled on a
geographical basis with entry points, distance and technical characteristics of
transport facilities. The contract deliveries should be modelled on a daily basis
with considerations for the contract capacity, contract entitlement, and
pipelines restrictions. The gas storage (LNG and underground storage
facilities) should be modelled using specially developed energy storage
algorithms, which should take into account injection rate, withdrawal rate,
inventory level, and base gas. The model provides fast and accurate day-by-
day simulation for multiple annual time periods.

The system should provide:

 Flexible, user-friendly, Windows-based, graphic user interface;
 Detailed daily model for operations, nominations and planning;
 True resource optimisation including contract and facilities selection;
 Optimisation of revenues based on both efficiency and competition; and
 Hedging strategies for risk minimization.

3. Documents and References

3.1 Any software code and model offered should be accompanied with:
 Analytical documentation of the capabilities, the mathematical background
and the software implementation
 References about previous experiences with the same model and policy
applications
 Sample cases and results, as well as samples of user-interface
 Certification that it operates on PC and PC-network, specification of the
minimum hardware and software requirements for the computers and
indications about model performances (runtime, etc.)

3.2 The software code and model must be operational and ready for delivery
at the closing date of the present tender.

4. Offers

The proposals should include:

(1) A detailed technical description of the offered software codes and

models (see 3.1).
(2) A detailed description of the licensing terms and conditions and
their renewal.

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 (3) A proposal concerning the timetable for the delivery of the software-
code and models and the training and maintenance services
offered.
(4) A detailed description of Consultant’s past experience and
references about model implementation and uses (see 3.1).
(5) The selected consultant will be asked to provide a bank guarantee
equal to 10% of total project cost for good performance. The bank
guarantee will be returned upon acceptance of the software code
and models delivered.

5. Selection criteria

The selection of the consultant will be based on the following criteria:

(1) Technical quality of the software-code and models, flexibility of the

software for different applications, user-friendliness, quality and
independence of the database, quality of the interfaces, etc. as
evaluated by RAE (Weight 25%)
(2) Degree of coverage of the requirements and expandability (Weight
20%)
(3) References about the software-code and model use in policy
applications. (Weight 15%)
(4) Terms and conditions of the licenses and the maintenance and
training program. (Weight 10%)
(5) Total cost of the Project. (Weight 30%)

RAE reserves the right not to award the project, for any reason.

6. Submission

All proposals (one copy) need to be submitted by registered mail, hand or

courier delivery to RAE’s address: Panepistimiou 69, Athens 104 31.

Deadline for receiving proposals at RAE’s premises: 22 December 2001,

15:00.

Further information is possible by writing to RAE or e-mailing to info@rae.gr.

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