In this paper a Dynamic Simulation Model has been used to present the likely responses of the electricity industries’ latest perturbations such as: changes in environmental regulations, international fuel market evolution, restriction on fuel supply and increase on fuel prices, liberalisation of the European Electricity Market, and the results of applying energy policies and official tools such as taxes and emission allowances. The case under study refers to the Teruel Power Plant, built after the 1970s oil crisis to ensure national electricity supply; burning domestically produced coal in order to ensure local mining activity. The Teruel Power Plant has made relevant investments in order to meet emission limits, such as a Flue Gas Desulphurisation Plant. The economic viability of the power stations has to be analysed after environmental costs have been internalised. A system is defined that studies the coal-firing Electric Power Plant selling energy to the free electricity market, whenever the generation cost is competitive. A Dynamic Simulation Model would appear to be an accurate tool to optimise power station management within different frameworks.