Risk-Aware Electricity Procurement for Flexible Cement Plants: A Utility-Theoretic Approach in Multi-Electricity Markets

This study presents a decision-making framework for flexible cement plants participating in multiple electricity markets under uncertainty. A highly electrified plant with demand-side flexibility, hydrogen-based fuel switching, and carbon capture (CCS) is modeled to engage in long-term, dayahead, and reserve markets. Using Expected Utility Theory (EUT), we evaluate electricity procurement strategies for decision-makers with varying risk preferences under five uncertainty scenarios. The plant selects the strategy offering the highest utility for its operator while also marketing operational flexibility for additional revenue. A post-decision risk analysis using Conditional Value at Risk (CVaR) is used to assess downside exposure. Results indicate that all decision-makers regardless of their risk preference, consistently favour a procurement strategy that blends long-term contracting with limited exposure to the day-ahead market. The proposed framework captures this trade-off and supports electricity procurement decisions that reflect both economic performance and individual risk attitudes.