Experts met in Budapest to discuss some issues of applied mathematics in tariff regulation

On 19 September 2016, Budapest (Hungary) hosted an international workshop on “Applied Mathematics in Regulating the Electric Power Industry”. The workshop was supported by Hungary Multisector Tariff Regulator. The Head of FAS Department for Regulating Electric Power Industry, Dmitry Vasiliev, was one of the workshop speakers.

He emphasized a broad use of mathematical modeling in antimonopoly control on the wholesale market of electric power industry and capacity, and discussed implementation of the benchmarking methods in various sectors of the electric power industry.

“Evaluating the consequences of expected transactions on the wholesale market frequently requires detailed studying and analysis, using various scenarios of participants’ conduct”, pointed out Dmitry Vasiliev. “Even more important is to evaluate the consequences when exposing cases of manipulating prices on the wholesale market. Such analysis requires mathematical modeling, engaging commercial infrastructure specialists”.

The workshop attendees included representatives of the academic community and tariff regulators from different countries. Speakers discussed the issues of forecasting global energy markets. They also looked into applied tasks of mathematical modeling and analysis in the grid system, aimed at evaluating efficiency of regulated organizations. It was noted that the modern benchmarking methods dominate, being built up on a broad analysis of big databases with use of programming (particularly, DEA (data envelopment analysis)), in different European countries in the course of tariff regulation.