Planning of Generation Investments with Risks of Severe Infrequent Events

At the end of 2019 the world suffered a pandemic called COVID-19. Undoubtedly, the main consequence was the loss of human lives and as a protection mechanism to try to avoid such losses, social isolation measures were put in place on a global scale. This social isolation caused a drop in the demand for electrical energy (around 6 % in Uruguay) and a greater drop in the global consumption of fuels derived from petroleum, which implied a drop in fuel prices due to the impossibility of instantaneously reducing the offer. This work analyzes the consequences of these abrupt variations in Electricity Demand and in the prices of usable fuels in thermal power plants for the electricity sector. These consequences are modeled and included in the OddFace investment optimizer to obtain the optimal investment plan, taking into account the occurrence of this type of events. The changes in the risk of the profits created by thermal, wind and hydro projects and the marginal cost for supplying the system's Demand are shown. As a general conclusion, infrequent extreme events such as COVID-19 can be modeled and characterized when Planning Generation Investments Optimization.