The Academic Version of a Fundamental Market Model
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- Institutt for elkraftteknikk 
In this master thesis, the making of a fundamental market model will take place. To understand the model, there is a chapter that describes the theory behind the calculations in the model. The focus of the model is to calculate water values, to be analyzed further. In this thesis, there are 4 main models that is described. The first model is a deterministic model, calculating the water values of fixed input data. The second model is a stochastic model that calculates water values from one area, using 15 price nodes and 5 inflow nodes. The third model is a two-area model that is interconnected with a loss-free line. The fourth main model is the fundamental market model, including 3 areas that are interconnected with losses on the lines. The master thesis also contains a sensitivity analysis of including wind energy into the mix. To analyze the results, all the models have been tested and produced water values. The water values are further analyzed and have shown the difference in all the models. In this thesis, one can see the impact of including the option of buying and selling energy, and the impact of losses on the lines. Furthermore, the sensitivity analysis shows that wind energy can reduce the water values, and become a contributor for decommissioning thermal energy. The conclusion of the thesis relay on the contribution of stochastic variables. The analysis shows that the accuracy of the calculations can be improved by increasing the reservoir levels and the price- and inflow nodes. This is because the model has simplifications and assumptions that makes the solution time lesser. By increasing the nodes and discrete reservoir levels one increases the solution time, but also the accuracy in the water values.