Smart Grid Optimization
Value-at-risk (VaR) is a financial metric that quantifies the potential loss in value of an asset or portfolio over a defined period for a given confidence interval. It provides a statistical estimate of the worst expected loss under normal market conditions, enabling stakeholders to assess and manage risk effectively. In power systems, VaR plays a crucial role in understanding the uncertainty associated with various factors such as energy prices, demand fluctuations, and generation variability.
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