EnWorkz Inc (US subsidiary of EnWorkz) announces Energy Business Optimization Suite (EBOS) software.

Austin, Texas (October 1, 2002) – EnWorkz, Inc. today announced the availability of EnWorkz EBOS™, a unified, portfolio-level risk management solution for electric power generation, delivery, and hedging. Based on breakthrough, high-performance technology for modeling physical generation assets in combination with financial instruments and delivery contracts, EBOS is designed to help energy companies solve complex problems in areas of risk assessment, portfolio optimization, valuation, contract structuring, and resource scheduling. It also provides U.S. energy companies with effective tools for coping with the new standard market design proposed by the Federal Energy Regulatory Commission (FERC). For an energy company, the benefits of using EBOS include more predictable earnings, improved efficiency, and more transparent risk management at the corporate level.

A key feature of EBOS is its ability to accurately and quickly model the response of electric power generators to market conditions. For instance, on a typical desktop computer, EBOS requires only 10 seconds to simulate the behavior of a thermal generator over a 25-year period with hourly granularity (219,000 periods), with full consideration of ramp limits, warmth-dependent start times, uptime and downtime constraints, and ancillary services arbitrage opportunities. This performance is up to 100 times faster than previous algorithms for modeling or scheduling generation assets, making it practical to consider hundreds or thousands of scenarios in risk management, scheduling, pricing, valuation, and scheduling decisions. Moreover, EBOS can simultaneously model the behavior of an entire portfolio of generators, bilateral contracts, financial contracts, and other instruments, avoiding the “suboptimization” that can occur when assets are managed in silos.

According to Joseph Tan, Executive Director of EnWorkz, “We see a large and increasing need in the industry for a new breed of risk management tools that incorporate detailed physical models instead of purely financial ones. For instance, FERC’s recent proposals for overhauling the power markets, the declining production rates of U.S. natural gas wells, and the pending expiration of rate caps and power buyback agreements across the industry, and the renewed focus on trading around physical assets – all of these factors have the potential to dramatically increase uncertainty associated with asset returns and hedging. EBOS is an effective and practical tool for dealing with this uncertainty. Our goal is nothing less than to contribute to the turnaround of the U.S. power industry.”

Physical assets like generators and loads can have complex payoff functions and subtle embedded optionalities. As a result, traditional Wall Street risk management models, designed for financial instruments with relatively simple characteristics, cannot be used without sacrificing the quality of analysis. In contrast, EBOS incorporates detailed physical models to solve complex portfolio optimization and risk management problems involving multiple asset classes, multiple scenarios, operating flexibility, and various mission critical constraints. “These are difficult computer science problems, and this is not technology that you can find in the published literature,” stated Dr. Jim Christian, Chief Technology Officer at EnWorkz. “We had to develop sophisticated new algorithms, especially for the generator models, to achieve the turnaround times and capabilities that are necessary for an effective overall solution. To our knowledge, nobody else in the industry offers anything comparable – either they need 100 times longer to execute, or they simplify the model to the point that it isn’t very useful.”
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