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Libraq of Congress C a t a l o ~ t n g - i ~ ~ u b l&&U

Power system reshvctunng and daegulatian: trading, perfomance. and inlomrion

technology/ edited by L.L. h i .
p. em
Includes bibliograpliical rsfemces and index.
fS%N0 471 49500X
1. BIcciriml power systems - Control. 2. Electric utilities - Cost control. 3. Elcchic
Utilities Deregulation. 4. Elecmc utilities . Technological innovation%1. Lai, h i Lei

TK1007. P68.2001
333.7932- dc21


British Libraty C Q t a l o ~ uin~ ~

A catalogue record for this book is avatlahle from the Bntish Library

TSBN 0 47149500 X
Produced from Word files supplied by the Editor
Pnnted and bound in Great Britam by Antony Rowe Ltd ,Chippenham, Wtlts
This h w k is pnnted on acid-free paper responsibly manufactured from sustainable forestry,
in which at least two trees arc planted for each onc used for paper production

reface ...............................................................................................................................
ent ..........................................................



............. 1


Competitive Market for Generation .............

The Advantages of Competitive Generation ..................................................
The Role of the Existing Power lndustry .............
Reconfiguring the Electricity System. ............................................
Trends in Conventional Electricity G
Electricity Demand Operation and Reliability .............................................
Power Plant Operation ..................................
Reliability Assessment
Availability of Fuel .......................................


s ...........................................




Capital Costs for New Plants ........................





Coimectioii and Use of System Charges .


Introduction ..........




1. I J .2

Circuit Connection and P

Performance Analysis.....
Solution Technique.........
1.1 1.5
Results and Discussion ...........................
1.1 1.6
S i ~ p l i ~ Phase-balanci
1 .11.7
Appendix .........................
Case Study 2: Controlling a S
The Solar Power Plant ..................................................................................
Control Structure of the Plant .......
1 A2.4
CA Formulation............................................................................................
1 .12.5
Experimental Results ........... ..................................................................
1 .I3
Conclusions ........................................................................
References ...... ...............................................................






2.6. I



l a ~ ~ oofnE ~ ~ c~~ ~~ ~i c~ i t ~ e s
Introduction ............................
Traditional Central Utility MO
Reform Motivations......................
Separation of Ownership and
Central Dispatch Versus
Competition and Direct Access in the Electricity Market....................................
Competition in the Energy Market .....
Competition and Auction Mechanism .....................................
Direct A c c e s s ~ ~..e e ~ ~ ~ ~
Independent System Operator ..............................................................................
Pricing and Market Clearing
Risk Taking.............
Retail Electric Providers.,.
Different Experiences........................................................
England and Wales ..........
Norway ...................
Scotland .....................................................................
New Zealand...........
The European Union and Gennany ..............................................................




3 CO
Introdtiction .................................................................
The Independent System Operator ................... .............................................
Wholesale Electricity Market Characteristics............
Small Test System ............










Bidding .....................................................................
Market Clearing and Pricing ........
Market Timing ...........................................
Sequential and Simultaneous Markets ...............................................
Bilateral Trading...............................................


Physical and Financial Markets......................................





stem Capacity ..........................................................................


Technical 'Issues......................................................................

4.2. I

Competition in Supply..


Key Issues or Distribution Businesses ..................


Use of System Billing.................................................


Competition in Metering ..........................



Maintaining Distribution Planning ...................

Network Planning Tools.............................................................................

Asset Replacement Planning ...................
. 125
Risk Assessment ......................................................................................... 125
Skills and Resources
.......... 125
Neiwork Design ....... .............................................................................
~ i s ~ ~
on ~Automation
u t i



4.3.1 1
Automation Case Study .Remote Control in London Electricity ............. 129
Future Devclopmeiit ..............................
Appendix: Distribution Automation i
4.5. I
Introduction ................................
Remote Terminal Units ..................................................
SCADA Master Station . ....................................................................... 134
S o h a r e Functionality ....................................
.... 136
Operations and Maintenance (O&M).........................................................
System Integration, Design and Management...................
............... 137
Systems .
............................................................ 140
References ...............................................................



Introduction ........................................................................................................
Role of the TP .......

New Market Organisation .

Priority Insurance Scheme........................................................

Transmission Expansion
Conclusions ........................................................................................................
References ..............................................






pen Access
Introduction ....................................................................
The Traditional Power Industry
Motivations for Restructuring the Power Industry..
Unbundling Cencration, Transmission and Distribution ...........................
Components of Restructured Systems........................................
...... 175
Gencos .................................
BOT Plant Operators and Contracted IPPs
.. 175
Discos and Retailers
..................................................... 175
Independent System
Power Exchange (P







PX and ISO: Functio

California Power Exchange ...........................................
IS0 Functions and Responsibil~ties...........
Classification of IS0 types .....................................................
Trading A~angements



6.4. I
6.1 1

The Pool .......................


ulti 1atera1 Trades .........

T r ~ s ~ i s s i Pricing

olled-in Pricing Methods ..............







System Control ...............

hicillary Sewice Provision.............................................
Congestion ~ a n a g e ~ eii?n Open-access
Transmissioo Systems......................
Congestion Management in Nomial Operation..........
Integrated Transmission patch Strategy................
wer System ........................
~ ~ ~ u s t r a Using
~ i o i i a Sma
Sfatic Security-constrainedRescheduling
Dynamic Secmity-constrainedRescheduling .................
Open-access ~oordi~iatioii
Price Elasticity as a Me
Relieving ~ongestion
~ o o r d i n a ~ ~betwce
oTraii~actionCoordiiiatioii ......
~ n t e ~ r ~Coordinati
Conclusions ..........................







2 16


Development of Electric Power Industry
S ~ c c e ~ Growth
~ ~ v e of Power Produ
Further Expansion of Power Nehvo
increase of Electricity C
~ a n a ~ e i System
n e ~ ~of Electric
The State Power Corporation .........
hilosophy aiid Strategy o f tlie SP .............................................................
23 1
Market in China...
7.4. I
~ o ~ i v a t ifor
o ~Reformation
...................................................................... 234
efonn PLaii of tile SP ........


Obstacles in Establishing the Power Market in China

Electricity Pricing ....................................................
Basic Theory of Predicting Electricity Costs ..
Electricity Cost Derivation..............................
Elcctricity Pricing of Inter-provincial Power
Traiismission pricing ...........,....,.......................,.,,.
Current Decomposition Axioms
7.6. I
~athematicalModels .,..................................
................................... '......'.....~..,..252
Methodology of Graph The0ry.....
Algorithms and Case Studies............................
...... 253
......................................... .........................

Benefits o f FACTS Technology.......................
Transmission System Limitations ........
System Stability....................................


Thermal Limits ......

FACTS TeGhnology.............



Control Methods and DSPiMicroprocessor Technology ...........................

Present Status on FACTS
Solution Options with FACTS ............
Fundamental Concepts of
Skuiit Controllers..
............................................................................. 266
Series Controllers ..................................................
Combined ScriedShuiit Controllers ...,............,..............
Phase Angle Controllers....................
HVDC Transmission Controllers ...............................................................
Other Controllers.........".............
........................ '........ 281
UPFC ..................................
Concluding Remarks .......
Ackaowledgements ...........................
..... 284






Pre-privatisation (1 990): Th
Post-privatisation(1990): F
Early-inid 1990s: Getting t
1994/5+: Getting More for Less ....................
Late 1990s: Capital Effici
August 1999 Interim Report: All Change?....
The 1990/2000 Regulato
Asset Ownership.............................
Asset Governance.
Asset Management ......................................
Asset Information and t
9. I3
Condition Monitoring..................................




~ n d e r s ~ a i i dLong-term
Asset Costs
Underground Cables .....................................................
HV Cables....................


Zero Sequence Impedance





Common Mode Failure..................

Asset Infoimation Acquisition ...........

Data Cleaning ...........................................











Appendix: Fuzzy DGA for Diagnosis of Multiple Incipient Faults...................323
The IEC DGA Codes ......
9. i9.3
Fuzzy C)iagnosis Results...
Trend Analysis of Individual Faults ....
........................................ 327
9.1 9.5
Refesences .







A General Overview ....................................

The Wavelet Transform.

Wavelet Analysis .....................................................
Application to PQ [25] .






~ p c s i o ~Distortion


S o h a r e Agents .....................................

Genesal Issues and the Future of Agents.





Evolutionasy Programming-based Optimal Power Flow Algorithln


EP.. ...................................



Load flow Solution..........

Gradient Acceleration........................................................






Complex Artificial Neural Networks for Load Flow Analysis .....

Conventional A" for Real Numbers ..
New ANN for Complex Numbers .........
1 I .5.2
Comparison of the two ANNs by Coinputer Sirnulatiou ...........................
Virtual Reali
Types of' VR systems...................
1 1.6.2
Non-immersive (Desktop) Systems.


Cave ....................................................


Augmented ...............................


The Hardware .................

The Correspondence......................................




X 1.7.4
Coiiclusioris ...........................

The Internet................................
What Is the Internet? .................................................................................. 416
oes the Internet Work
What Would Happm Without the Intcrnet? ............................................... 417
Wow Can the Power lndustry Benefit from the Internet?.
ow Can I Find the Inromiation I Need?..................................................
Usability of the Interne
Internet Products..........
iltimedia Access ..............
0x1-line Setvices ......................................................................................... 42 I
Support for Professionals
The Power Industry and the liitemet .......................................................... 422
Recent Improvements on the Inteilnet .......



Internct Technology.............
Access to the Internet ................................................................................. 425
Operating Platforms on the Internet ..


Internet Sccurity ......................



Interpreled Versus Compiled Iaiguages ....

What Is JavaScript? ....................................................................................
What Is Java? ..............
........ 435
Web Pages.
................................................ 436
.. 437
Difference Between a Static and a Dynamic Web Page ............................ 437
Displayiiig Database Content ...................................
Web Pages with Fuuctionality.................................................................... 440
Web Pages with Integrated Applications ......

Why the Need for XML


ation of Content and I .ayout..

Layout Validation with DTD ..............................
Styleshects .......



Monitoring Power Station Equipment........................................................ 454

Case Study 2: Power Trading Application ....
Conclusions ................................
Refercnces ....................


The electricity power utilities in many countries have been, or are being, rest~c~ured.
There are many reasons for restructur~ng,In some countries restruc~uringhas been driven
by the desire of gove~mentto meet ~ncreasingdemands for electricity by encouraging
independent power production, which relieves government of a financial obligat~on.In
countries where ownership of assets is in private hands, restructuring has been driven by
mergers and ac~Liisi~ion~,
as companies seek to gain competiti~eadvantage.
In the most a ~ v a n countries,
restruciuring is being driven by the desire to allow
consu~ersto choose their electricity supplier on the basis of price and service provided~
These drarna~~c
changes in the organisation of electricity power utilities bring with them
new challenges and opportunities, as the previous centrally designed and operated systems
are di~mantledand replace by a new competitive framework.
~ o m p a n i ~operating
in a competitive market need more s o ~ ~ ~ i s t i c acontrol
~ e d and
management systems to ensure that their business objectives can be achieved. The
development and application of new technologies is also accelerated in this new
as companies seek to improve their effecliveness and efficiency.
This book is con~ributedby a group of world authorities. It explains in depth the reason
ring, without including superfluous detail. Examples are given from
tails are provide^ on new s~rate~ie$
and tec~nologie~
which are being
f ~ e ~ ~ e ~ a~ransmission
and supply. The implications for the ~ n v i r o n ~ e ~ ~
are also reviewed. Tools being ~ t i for
~ asset
~ s an~age men^ and fo
management of ~nfrastruc~ur~
are i~l~strated
with practical examples.
m o d e ~ l i nand
~ general analysis of ~ o m p e t i ~ power
~ v e markets are also illus
This book provides a com~rehensivereview of all the many facers
place in a d y n a ~ i c~ ~ d u s X~t iys .c o ~ p u ~ s o rreading
for graduates and e n g i ~ e ~and
other pro~essiona~s,
who are entering or involved in the electricity power industry.

avid G. Jefferies CBE, B;

This book was written as a result of the ongoing stimulating worldwide dere
of the power industry. This move away from the ~aditionalmo
towards greater competition, in the form of increased numbers of indepe
producers and an u ~ b u of~ the~ main
~ ~service,
n ~ starred in the United King
and this change was driven by the large differences in electricity tariffs across regions, by
in technologies which &low small producers to c o ~ p e t ewith large ones,
and by a strong belief that competition will produce an all-win situat~on.
group of experts to produce a broad and
The book was contributed by an ititernat~ona~
of the main issues. The intent has been to provide the reader with an in
ut without excessive specialisation, to avoid a purely ~ualitativetrea~meIi~
by ~
~some a ~~ a ~ y and
~~ c numerical
d to offer9
~ whenever
~ possible,
a ~l
case studies, worked examples and project discussions.
Since each power utility is unique, it will not be possible to present the best path to
fotlow in the restructuring exercise. The market models, regulation and tariffs used by
orks, and the r r ~ e c h ~ ~for
~ s~m~ i n t a a~high
~ ~ level
n g of r e ~ ~ a ~will
use of the advancement of communications technology and increased
power, it is possible to consider different market structures.
a d v ~ n c ~ ~no
e n~ t ~
n f ~ ~ could
a ~ be
~ availabtbte
o n
in time for the business o ~ ~ r a t ~ ~ n .
Different markets have been considered in the book. In brief, they could be u ~ m a r ~ s e d
types. In the complete1 ~ a r ~ e t - d r i v eenv~~onment
rket ~orcesseek to
the b e h a v i ~ of
~ rvarious layers in the market, e.g. the
regulators. In the kransiti 1 markec there is a process o
r ~ ~ u i a et n~ vdi r o n ~ ~ to
n t a d ~ r e g u l a ~~nvironment.
In the embry~nicfree m a ~ ~ e ~ ,
state retains own~rshipof the generators and some of the ~ a n s ~ ~ s sinfrast~uct~re,
opens up the market to ~ ~ m competition
~ ~ e d at the distribution level.
As there is much u i i c e ~ ~ n in
t ythese environments, due to the s t ~ c t ~of
r ethe
p i ~ n i n gover a long-term horizon is p e r c e i v ~as very difficult at present. Yet,
long-term planning, it is likely that the electricity power industry would be at great risk, as
it ~~~$~~ not be able to supply the growing d
~ or to~~~~~a~~
n the ~
service as it is c ~ r r e ~ t providing
to its consu~ers.The recent chaos in
his could have very serious con~~quences
to the lon
This book shows how new ~ e c ~ i n o ~will
o ~allow
us to cha
market structure to one that relies on co~~petition
to set the
t e c ~ ~ o ~ o g iwe
e s ,can use less energy, result in^ in lower ene
avoid OX defer a d d i ~ ~ o nexpensive
plant c o n ~ ~ rThe
~ ~a ~~~ do OF
. ~ p~ ~o ~~ ~ ~ ~
such as independent power producers, power marketers and brokers, has a ~ d e da new
task of maintai~inga reliab~eelectric system. This book will detail
into accou$itsome of these issues.
In the new market e n v ~ r o n generation
~ ~ ~ ~ ~ represents
most of the CO
r e p o ~on~ the deve~opmentof new strategies and compares ~ ~ f f e ~tec
e l e ~ t r ~ c i~~ey n e r a ~ iwith
o ~ ~ n v i r o n m ~and
n ~ ~political considerat~ons. This i ~ c i ~ d e s



power supplies, renewables, regulatory constraints, new technical challenges
ifferent mechanisms, such as the pool, have been set up for the operation
of the new emerging electrical market. The market should dictate when new generation is
needed and where it is located.
ince there i s a large number of players in the m ~ k ~it ti s, i m p o ~ n to
t WO
type of bidding, or negotiation strategies that each player can use. It is especially ~ ~ p o ~ a n t
to work out the information content of the bidding strategies. Chapter 2 covers expe~ence
tools for
from various countries on power utility res~cturingand deregulation. An~lyt~cal
the ~ o d e l ~ i nand
g analysis of c o m ~ t ~ t i vpower
markets are presented. Chapter 3 also
discusses several wholesale electricity markets around the world and most of these are in a
continuous process of change. This evolutionary process is being d ~ v e Kby
~ the need to
address some of the outs~andingissues in the design and implementation of these markets.
Some challenges, such as reliability, market power evaluation and mitigation, are outlined.
hapter 4 reports on the change in ~~s~nbutio13
business in a dere~ula~e
Various issues such as planning, control, load forecasting, metering, customer services and
risk assess men^ have been considered. A case study on the remote control of London
~ l ~ ~ r iiscincluded,
Chapter 5 deals with transmission expansion. Following develop men^ of the market, the
transmission provider transforms into the independent transmission company (TTG) so as to
adnilmir a highly sophisticated market. The ITC is required to make c~mplexbusiness
5 over a wide range of time scales, such as the long-term, short-term and near realis chapter discusses future directions and ~ o d i ~ c a t i o ntos the ~ g u l a ~ o policies
0th a market maker and a service
ssion open access. The
economic issues associaked with
scussion of some ~rnpor~an~
issues in the e ~ e r g ~ n
mal dispatch, congestion mana~ementand the e ~ f e of
c ~~ e c ~ i n
en discussed with examples from the open-access viewpo~nt.
Chapt~r7 deals with the Chinese market. A tailed back~roundon the
industry is given. It also explains why the approaches a opted by the d e v ~ ~ o p
are not suitable. The chapter also proposes a new app ch to c a l c u trans
power systems with better e f ~ c i ~ n can
y ,ac~urate
To operate the ever i
transmission loss m
ironment, reactive power control to assure v o ~ ~ ~
Row control to avoid line overloading
o p ~ r a t i o Flexi
ctronics technology
presents the applica
ms. The impact of
entrants is discussed.
Chap~er9 deals with asset management. A comprehensive awe
required to support business in the deregulated e ~ e c ~ i market.
characteristics 06 the model components are descdbcd in detail. It wit1 benefit all internal
and external users in the open-access environ~ent,resulting in realistic and traflspa~ent
open-access charges, and bring long-term ecoi~omicbenefits to all pa
anagemene in power industry r e s ~ ~ ~ c t utire
n ni ~ ~ u ~ ~with
a t epractical



Elechicity industry restructuring has had a dramatic impact on the energy market. To
gain a conipetitive advantage, toclays energy providers need to focus on value-aclded
products and services, such as power quality. Powcr quality is a critical issue for industrial
customers, especially in the high-tech sector. In order to understand power quality, many
customers or energy providers have installed power quality monitoring systems to record
electrical system perfo~ianceandor facility equipmcnt reactions, and the analysis of the
monitored data has become a challenge. Chapter 10 reports on the techniques, methods and
standards used or proposed for power quality issues.
The explosion in thc use of information technology has seen the introduction of
computer-based work management systems, asset management systems, and control
systems to manage system operation. Information teclinology is rnalcing markets more
efficient, resource production less speculative and costly, and the delivery and monitoring
of energy more etficctive, while enfi-anchising customers to make more intelligent choices.
Improvements in infomation technology will continue to allow economical aiid reliable
solutions to problems facing tlie power industry. Chapter 11 introduces intelligent agents,
genetic algorithms, evolutionary programming, artificial neural networks and virtual reality
technology, and reports on their applications to load flow, valuing electrical options and
power equipment diagnosis. Tlic chapter highlights the technology behind the new market
brought about by deregulation. Energy service companies will continue to make iucreasing
demands for more sophisticated software and equipment to monitor and control various
aspects of power delivery.
In just a few years, Java has taken the networked world by storm. Java comnbiries
powerful, object-oriented programming with the ability to run on any computer platform
without the need for recompiling or translating. Java promises to play a yet more
kndaiental role in the future of on-line computing, including electronic commerce, for it
can allow anyone to make use of powerful applications anywhere. One result of its
i s that a scrap of code called a Java applet can be embedded in a
platform iI~~lepe~idence
World Wide Web page. Chapter 12 deals with the application of the Intcmet to power
station monitoring and discusses its use for energy trading. It also presents an introduction
to Web technology and i t s applications.
This book addresses the most up-to-date problems and their solutions in the arm of
power system restructuring aid deregulation in a cohesive manner. It will provide
invaluable information for power engineers, educators, system operators, managers,
planners and researchers.

The editor wishes to thank Mr Peter Mitchell of Wiley and his team in supporting this
The editor also wishes to thank all the contributors, without whose siipport this book
could not have been coiiipleted. In particular, the editor thanks Harald Brawn in maiiagiiig
to complete the m a n ~ ~ s c rdespite
great diffkulties caused by software ~iico~patibility.
The editor also wishes to thank rs Vinay Sood and Professor Sood for their creation of
the iuitial manuscript. The editor i s very grateful to Dr D a d Jefferies for writing the
~ o r $ w ( ? rThe
~ . permission to reproduce copyright materials by the IEEE and IEE for a
number of papers mentioned in some of the chapters i s most helpful. The arrange~ento f
the index by Miss Qi Ling Eai and Chun Sing Lai is imch appreciated.
Last but not least, we all thank Wiley for supporting the prcparat~~n
oftbis book and for
the extremely pleasant co-operation.

ei Eai was appointed Senior Lecturer at Staffordshire Polytechnic (now

Staffordshire University) in 1984. From 1986 to 1987, he was a Royal Academy of
Engineering Industrial Fellow to both GEC Alsthom Turbine Generators Ltd and its
Engineering Research Ceutre. He is currently Head of Energy Systems Croup and Reader
in Electrical Engineering at City University, London. He is also an I-lonorary Professor at
the North China Electric Power University, Beijing. Dr Lai is a Senior Member of the
IEEE and a Corporate Member ofthe TEE. We has authoredlco-authoredover 100 technical
papers. Tn 1998, lie also wrote a book entitled Ivrtelligenf System Applications in Power
Engineering - Evolutionary P r o ~ a ~ m and
i n ~Neural Networks published by Wiley.
Recently, he was awarded the IEEE Third Milleiiiiium Medal and 2000 IEEE Power
Engineering Society UKRl Chapter Outstanding Engineer Award. In 1995, he received a
high-quality paper prize from the International Association of Desalination, USA. Among
his professional activities are his contributions to the organisation of several ~nternat~ona~
conferences in power engineering and evolutionary computing, and be was the Conference
Chairman of the International Conference on Power Utility Dercgulation, ~ e s ~ c ~ f l n g
and Power Technologies 2000. Recently, he was invited by the Hong Kong Institution of
Engineers to be the Chairman of an Accreditation Visit fo accredit the University
(IIons) degree in electrical engineering. Dr Lai is also Student Recruitment Officer, IEEE
UI(R1 Section. In 1999, he was included in The Dictionury of Contemporary Celebrities qf
Worldwide Chinese. In 2000, his biography was included in the 18th Edition of J%zo 5 !4%0
in the FVorld, Marquis, 1JSA. His b i ~ ~ g r has
a ~ also
~ y been selected or inclusion in the 2001
Who I;yho in Science and Engineering, Marquis, USA.
Sc, PhD and DSc from UEUIIST, ~ a n c h e s ~ eIJK.

of the Royal Society of New Zealand. From 1970

to 1975, he was Head ofthe Power Systems and High Voltage Groups, UMIST. From 1975
to 1999 he was Professor of Electrical Engineering, University of Canterbury,
~ h i ~ s t c ~ ~ uNew
r c h ,Zealand. From 1982 to 1995, he was also the Director of Systems
Software & Instrumentation (a Christchurch-based consulting conipany established in
1982). From 1985 to 1990, hc was Head of Department, Electrical and Electronic
~ n g ~ n e e rUniversity
i ~ ~ ~ , of Canterbury. From 1988 to 1995, he was a ~ e i n b of
~ rthe
CIGRE-I4 Working Group on HVdc harmonics (14-03). From 1989 to 19525, he was
Convenor of GIGRE Task Force 36-05114-03-03 on AC System Harmonic ~ o d e l ~ i nfor
AC Filter Design. From 1990 to 1996, he was a Member of CIGRE JWG 11/14-09 on Unit
Connection. From 1996 to 1999, he was Convenor of CIGRE Task Force 14.25 on
Wannonic Cross-inodulation in HVdc Traiisniission. Since 1990 and 1995 respectively, he
has been Dircctor of CHART Instniments, Clx-istchurch and Director o
Consulting, a Christchurch-based consulting conipany. Professor Arrillaga h
many awards, such as John Hopkins Premium of the IEE, UM, 1975; the
Premium, IEEE Conference on Harmonics and Quality of Power, ~ ~ ~ Q P 9
Electrotechnical Paper, IPENZ Annual Conference, 1996; Uno Lamm Hig
Current Award, IEEE, 1997; John Munganest International Power Quali
Power Industry, 1997; Presidents (Gold Medal) Award, Annual Meeting



paper, I
P Annual
~ ~ o~n f e r e~n ~1999;
e , Silver
a1 S o c i e ~or Innovatio~in S~ienceand ~ e c h n Q ~ o2~ y ,
~ e c h n i e aCommittees
Award, 2000,
trained in the area of ~ o ~ e~ec~ronics
e r
with ~emen$,~ r a n k f u ~ ,
Germany, from 1985 to 1989. He obtained his Diploma in ~ e ~ e c o m ~ u n i c a t iato n
F r i e d ~ ~ r ~ - ~ ~University,
G ~ ~ a n in
y , 1994. He was a ~ a ~ - t i ml eec ~ r e rat City
~ ~ ~ ~ r ~s Q
i tny~, ofrom
n , 1994 to 1996 ~ e a c ~oi bnj ~ c ~ - ~ r i e~n tr ~od g ~ a ~inr C++.
e was a Senior Programmer at A M . EST I n t ~ ~ a t i o nEtd,
a ~ ~ o ~ ~ from
o n 1996
esent, he is a Senior Software ~ n ~ i n e e r A L T I ~London,
nology s o f ~ a r eHe
. is w ~ r k i nfor~ his
at City ~ n i v e r s on
i ~a p a ~ - ~ i m e
ects to achieve it in July 2001. His
arch interest is the e~tractionof
i n f o ~ from
a ~ data
~ ~using
~ neural nehvor
is Chair Professor and
The Hong Kong Polytechni
ity. His BE degree is from the
U n ~ ~ ~ofrGeylon
s i ~ and PhD from ~ ~ p e r i a l
Londo~.He has ~ ~ e v i o u worked
in Sri Lanka, USA, ~imbabweand Sweden a
search interests are in power system
r e s ~ ~ ~ ~pricing,
i n g , control, MVDC, ~ a n s ~ estability,
and ~ e l i a b i ~ i ~ .
~ r ~ e s sDavid
o r was elected an IEEE FeItow in 2000 for his ou~s~and~ng
~ o ~ ~ i b ~to~ i o n
acces He is the regional editor
electricity supply in dust^ reform an
tric ~ o wSystems
~ r
for Asia of the ~ n ~ e r n a tJournal

is r~$p~nsible
for skate
s the dis~ibutioneonip
~ ~ n of
c ethe pian~inga
n systems in the UK and abroa
and helped deve~opthe d~s~ibutjon
artered ~ n ~ ~ nand
lie has been at MIT since 1984 as a Senior Research Scientist in the
here she conducts research and teache ~ r a d ~ acourses
in the area of
systeni~ Since September 1999

Young Investigator Award for

~ s ~ i n ~ ~Li esc~~ r~e er .Pro~ess
ale ~ i e c t ~



has been Chairman of the National Grid Company plc since

1990, when the Company was formed as part of the privatisation of the UM electricity
sector. His bold and far-sighted leadership has been a key ingre~ientin its success of the
National Grid Group plc from the performance of the transmission system during a decade
of major change in the industxy, though the conception and development of Energis, to the
growth of the group internationally. He retired as the Chairman of the National Grid Group
plc in July 1999. Dr Jefferies was previously Chairman of the London Electricity
and of Viridian plc. He was the 1997/98 TEE President. Owing to his huge contrihution
made to thc institution, he i s an Honorary Fellow of the IEE. He i s also a Fellow of the
Royal Academy of Enginecring. He was a pioneer in the restnicturing and deregulation of
the UK electric power utility.
ia received his PhD from the University of California, Berkeley,
in 1983. Since then, he has been at the University of Washington, Seatile. He is currently
Professor of Electrical Engineering and Associate Dean of Engineering at the University.
Dr Liu is a Fellow of the IEEE and the US representative on CTGRE Study Committee 38.
His areas of interest include power system economics, intelligent system applications and
vulnerability assessment.

o obtained his MSc and PhD from the University of Manchester Institute
of Science and Technology. He is currently the Head of the Power Systems Research
Group at the University of Strathclyde. His group specialises in energy management
systems, issues concerning the electricity market and deregulation, simulation, analysis,
monitoring and control of powcr networks. Professor Lo has been an international advisor
and member of many organising committees of international conferences,
consultant/visiting professor to over 12 educational institutions, and has lectwed
extensively in the Far East, Europe and America. He is the author of over 260 technical
pL~blications.He is a Fellow of the TEE and a Fellow of the Royal Society of Edinburg~~.
is a member of London Electricitys Executive and is currently the
Managing Director of both London Power Networks (LPN), which i s the distribution
business of London Electricity, and London Electricity Services (LES), which is the private
networks business of London Electricity. As Head of the Public Distribution Business he
led the work during 1999 which culminated in the formation of 24sevei1, the joint venture
network management services provider formed by LE and TXU Europe (Eastern
Electricity). He has been in the electricity supply industry for 25 years in a variety of both
operational and strategic roles within the distribution business. He has a practical
engineering background having worked in a number of operational, project manager and
leadership roles i n utility power distribution. Mr Morton is a Chartered Electrical Engineer
and a Fellow of the IEE. He also represents the UK in the business area of distribution at
~ the pan-European
~ association
~ of electricity
~~~yreceived his BE and PhD degrees from the National University
of Ireland, Dublin, in 1983 and 1989 respectively. He is currently a Professor at the
National University of Ireland, Dublin, with research interests in power systems, control
theory and biomedical engineering.



ebllk is a Professor of Electrical and Coinputer Engineering, Iowa

State University, Ames, Iowa. He received his BS and MS degrees in electrical engineering
from Purdue University and his PhD in electrical engineering from Virginia Tech. His
industrial experience includes over 15 years with a public utility (Commonwealth Edison),
with a research and development film (Systems Control), with a computer vendor (Control
Data Corporation) and with a consulting firin (Energy and Control Consultants). He has
participated in the functional definition, analysis and design of power system applications
for several energy management systems since 1971. Dr Sheble also designed the
optimisation package in use at over 50 electric utilities to schedule electrical production.
He has consulted since entering the academic world with companies in North America and
Europe on electric industry deregulation as well as expert witness testimony on the
National Electric Code and lntellectual Property Rights. His consulting experience
includes significant projects with over 40 companies. He developed and implemented one
of the first electric market simulators for the Electric Power Research Institute using
genetic algorithms to simulate the competing players. He conducts approximately 24
seminars each year on optimisation, artificial neural networks, genetic algorithl~~s
genetic programming, and electric power deregulation around the world. His primay
expertise is in power system optimisation, scheduling and control. Dr Sheblt? has been
awarded over 1 million dollars of research support over tlie last 10 years, primarily in the
application of adaptive agents to market bidding. He has authored a review of adaptivc
agent market-playing algorithms for the Kluwer press release P o w r Systems
Restmcluring: Engineerin'q and Economics edited by Ilk, Galiana m d Fink. He has
written a monograph on tools and techniques for energy deregulation entitled
Conjputational Auction Mechanisms.for Restructured Power Industry. He has also been an
invited guest on radio talk shows and a resource for several news articles on electric power
deregulation and industrial trends. His research interests include power system
optimisation, scheduling and control. Professor SheblC is an IEEE Fellow.
~ o ~ Vijay
e ~So0s obtained
~ ~ his BSc ftom University College, Nairobi, and his MSc
degree fi-om Strathclyde University, Glasgow, in 1969. He obtained his PhD degree in
power electronics from the University of Bradford, England, in 1977. From 1969 to 1976,
DKSood was einployed at the Railway Technical Centre, Derby. Since 1976, he has been
employed as a Researcher at IREQ (Hydro-Qukbec) in Montreal. Dr Sood also has held
Adjunct Professorship at Concordia University, Montreal, since 1979. Dr Sood is a
Member of the Ordre dcs ingknieurs du Quebec, a Senior Member of the IEEE, a member
of the IEE and a Fellow of the Engineering Institute of Canada. He is the recipient of the
1998 Outstanding Service Award f%omIEEE Canada, the 1999 Meritas Award from the
Ordre des IngBnieurs du Quebec, and the IEEE Third Millennium Medal. Dr Sood is
presently the Managing Editor of the IEEE Canadian Review (a quarterly journal for IEEE
Canada). He is a Director and Treasurer of IEEE Montreal Conferences Inc. He has worked
on the analog and digital modelling of electrical power systems and their controllers for
over 25 years. His research interests are focused on the monitoring, control and protection
of power systems using artificial intelligence techniques. Recently, Dr Sood has been
interested in the Internet and its applications for teaching purposes and was mandated by
IEEE Canada to publish the journal IEEE Camdian Review on the Internet (
Dr Sood has published over 70 articles and written two book chapters. He has supervised
14 postgraduate students and examined 13 PhD candidates frotn universities all over the
world. He is well known amongst thc electrical engineering community in Canada.



is Technical 2% Regulation Manager of London Power Networks (LPN).

r Cliff
LPN is the distribution business of the London Electricity Group. In his current position, he
is responsible for all technical and regulatory matters regarding the public cleclricity
distribution system in London and particularly the quality of supply and reliability
performance that sets London apart. He has previously been Strategy Manager, Asset
Manager and Planning IvIaager for London Electricity's Public Networks Group. In his
recent roles he has championed the development of an integrated technology strategy,
strategic asset management, fault causation analysis, incipient fault detection and location
techniques, as well as creating the strategies behind the implementation of one of the
largest distribution remote control, telemetry and automation pro-jects. Mr Walton joined
LPN whea it was established in April 2000; his career in electricity distribution spans 29
years. IIe has worked with a number of overseas utilities and has written and presented
many papers on a wide variety of technical and asset governance and m ~ a g e ~ issues.
He is a Chartered Electrical Engineer and a Member of both the IEE and IEEE.

r ~ ~ ~ s s ~ r
was born in May 1936. He graduated from Xi'an Jiaotong
University in 1957. He has since been with the School of Electrical Engineering of the
university, where he now holds the rank of Professor and is the Dircctor of the Electric
Power System Department. He is a Senior Member of the IEEE. From September 1981 to
September 1983, he worked iii the School of Electrical Engineering at Cornell University
in Ithaca, New York, USA as a Visiting Scientist. From September 1991 to September
1993 he worked at the Kyushu Institute of Technology in Kitakyushu, Japan, as a Visiting
Professor. Prof Wang has a 40-year experience of researching and teaching in electric
power system analysis and planning. His main research fields include reliability evaluation,
generation and transmission network planning, operation planning, system contingency
analysis, dynamic and transient stability, short-circuit current calculation, optimal load
flow, and probabilistic load flow. He is especially proficient in constructing mathematical
models and developing application software in the above areas. He also took part in many
research and planning tasks of key electric power projects in China, such as the Three
Gorges Hydro-Power Station. He proposed a new transmission system, namely the
fractional frequency transmission system (FFTS) which uses a lower frequency to reduce
the reactance of AC h-ansniission systems. I n recent years, he has been researching the
electric power market.

~ t received
s ~his BE
~ (Ions) and PhD degrees fiom the University o f
Canterbury (New Zealand), where he is now a Senior Lecturer. Dr Watson has authored
and co-authored approximately 100 technical papers and 3 books. Paper awards received
include; Best Paper Award (The Sixth International Conference on Harmonics in Power
Systems, 1994), the William Perry Award (TPENZ) and Finalist for the Carter Holt Harvey
Packing Award for Innovative Technology (IPENZ). He has also given a nuinbcr of invited
lectwes in Singapore, Australia and Canada,
ail Wen received his BEng and h4Xng degrees from Tiarijin University,
China, in 1985 and 1988, respectively, and his PIiD from Zhejiang University, China, in
1991, all in electrical engineering. He was a Postdoctoral Fellow at Zhejiang University
Eroin 1991 to 1993. He joined the faculty of Zhejiang University in 1993, and has been a
Professor of Electrical Engineering since 1997. We held a visiting position at the National



apore from 1995 to 1997. e is on leave from Zh

ong Polytechnic Universi as a research fellow.
ral Science Award of China, Zhejiang Provin~~aI
Top Young ~cientist
and several other awards from the Ministry of Education (China), Zhejiang
ial gove~ment,Zhejiang University and the National University of Si~gapore.He
is a ~ e ~ bofe the
r editorial board of the JournQzo ~ ~ ~ ? o mofEleclric
u ~ ~ o n Power ~ y s ~ e ~ s
ese) and was a guest editor of a special issue on Artificial intelligence ~pplicat~ons
r systems. His research interests are in power system r e s t ~ c ~ r i nand
g artificial
lications in power systems.
obtained MSc, PhD and DEng from University of ~ a n c h e s ~ e r
echnology in 1971, 1974 and 2001 res~eceive~y.
C u ~ e he
n is
~ ~ ~
Electrical En~ineeringat the University of Western Australia.
system dynamics, protection, electromagnetic transient evaluatio
n, artificial intelligence and c o ~ p u ~ a t i o nin~elligence
in power system
operation and planning. Professor Wong has published over 140 research papers and has
been awarded the Sir John Madsen Medal of the Knstitution of Engineers Australia. He was
the Founding Chairman of the Western Australia Chapter o f the IEEE Power Eiigineer~ng
Society and was the Chairman of the Western Australia Section of the IEEE from 1999 to
2000. He h
a member of numerous technical committees for intema~i~nal
E ~
r Wong was the General C h a i ~ a nof the IEEE ~ ~ S / C S
nce on Power Systems Technology powerc con 2000). We is an
editorial board member of the interna~ionaljournal Electric Power Systems Research and
of ~ ~ t e f l i g~en~f of r ~ u t i oProcessing
Syst~ms.In 1999, he was
uts~ndingEngineer Award of the lEEE Power Enginee~ngSociety WA
Chapter. He was a recipient of the IEEE Third Miflennium Medal in 2000. Professor Wong
is a Fellow of the Hong Mong ~iisti~ut~on
of Engineers, Fellow of ~nstitu~ion
o f ~ngjneers
Aus~alia,Fellow of the IEEE, and Fellow of the TEE.
cquired her degree of Bachelor of Engineering in Electrical
ee S
The University of Hong Kong in 1996. In the same year
Miss Yuen was awarded The China Light & Power Company Prize in Electrical Energy,
The applic~~ion
of ~ i ~ c i a l
because of the dis~inctionof her final year project en~~tled
neural n e ~ o r k son the detection o f high i~pedancefaults. During 1994 to 1998 Miss
Yuen pursued the degree o f Master of Philosophy with a thesis entitled Fault detection and
tection in low voltage power systems. In 1998 she was awarded the China
Co. Led. Electricai Energy Postgraduate Scholarship. In the same year she
was awarded John Swire & Sons Ltd. James Henry Scott ~cholarshipfor ~ngineering
Studies at the U n i v e r ~ oi ~f S~athclyde
which enabled her to pursue the degree o f Doctor
of ~hilosophyin Scotland. Miss Yuen is also an Associatc Member of the IEE. Her current
research interests include the analysis of international energy markets, congestion
m a n a g e ~ e ntransmission
piicing and the application of i n f o ~ ~ ~tcc~nology
in energy
received SB degrees in applied m a t h ~ ~ a t i cand
s in electrical
engineering and com~uterscience and MEng degree in electrical engineer~ngand computer
science from the Massachusetts Institute of Technology (MIT), Cambridge, in 1995 and in
1997, respectively. He completed his PhD degree in electrical e n g i n e e r i ~and
~ computer

IT, c ~ n c e n t ~ t i nong e l ~ ~power

r ~ csystem economics engineer^
network economics: underlying p~inciple
is entitled Electric
independent transmiss
mpany (ITC) and designing a ~ c ~ ~ tfor
e cre~ r ~
research i n t ~ r e s ~include
~ o d e l l i ~ofg energy markets as stochastic dyn
epts for the 1C and ~esigningsoftware tools for various en~rgym a ~ ~ e ~
has a strong b a c ~ ~ r o uinn control,
estimation, m a ~ h e ~ aresearch
design and r ~ g u l a t economics.

Dr Loi Lei Lai

City University, London

Restructuring of the ele&icity supply industries is a very complex exercise bas

energy strategies and policies, macroe~onomic develo
conditions, and its application varies from country to country. It is i m p o ~ to~ point
that there is no single solution applicable to all countries and there is a broad range of
diverse trends,
~ ~ b e r a ~ i s ~ ~eregulation
(or reregulation) and pr~vatisationare all processes under
the general label of market reform. Liberalisation refers to the ~~troduction
of a less
restrictive regulatory framework for companies within a power sector. This could
deregulation, which is the modification of existing regulation. It can
reregulation is a more accurate term than deregulation since new laws are
on the industry with reguIato~watchdogs appointed to protect c o n s ~ ~~nterests.
then, a true liberalised energy market would work within a set r e g u l a t o ~framework,
overseen by a regulator and with no external political influence upon the particip
sation is the sale of g o v e ~ e n tassets to the p n v ~ t e sector, by itself,
is not sufficient to introduce competition into a reformed sector. ~ompet~tion
will be the result of careful regulation of the privatised entities to allow new e n ~ r access
a ~ ~ ~
to the ~ a r ~ e~ompetition
is ~ u n d a m e n ~to1most market reforms and it is introduced in
order to reduce costs and increase efficiency. There is considerable variation in the extent
tion which is introduced. For example, competition could be introduced just
n of new gene~atingcapacity and referred to as competitive bid din^ where
the existing gen~ratingcompany invites contractors to tender to build, operate and sell
d Alternative~yall licensed g~nerator~
ower to the monopoly at a ~ p e c i ~ eprice.

e allowed to compete to supply wholesalers or retailers through a short-term market

~ k or via
~ longer
t ~ term contracts; this is called compet~t~ve
g e ~ ~ ~ tThe
i onext
vel i s wholesale competi~ion~
i.e. competit~onin the sale of electricity to wholesale
ies for resale to a retail level or directly to final customers. This usually allows the
ion at final c o n s ~ ~ mlevel,
n s ~ ~ e to
r s choose their own s
This is us~allythe very last
~ouseholdconsumers, is calle
step o f the reforms, as it requires a complex information technology system because of the
of small users involved. Retail c o ~ p e ~ t i oisnusually i n t r ~ d u c ~
the larger i n d u s ~consumers,
then the medium cons~mers
und the world are currently in ~ a n s i t towards
i ~ ~ more
arkets. The changes were initiated by:
8 r~alisat~on
that generation and dis~ibution nctions need not be mono
a feeling that public service obligations are
lion potential of competition;
availability and fuel supply s ~ ~ b i l iand
the develop men^ of new technologies in power generation and i n f o ~ a t i o ntechnolo

erican electricity m
The ~ontinu~ng
growth of competition i
the 1978 passage o f the Public Utility
latory P o k e s Act (
conservation measure, PURPA establ
ducers (IPFs) to sell electricity to local regulated investor-owne~utilities (IOUs).
were broadened s ~ b s t ~ t i by
a ~the
~ ypassage of the Energy Policy Act of 1992
which requires transmission line owners to wheel bulk power [l]. Thus, under current
fe(iera1regu~ationsnon-utility power producers can sell electrici~to any utility on the grid,
a policy
F u ~ h e r ~ o rin
e , April 1994, the California Public Utility C o ~ m i s s ~ oadopted
establishing complete open access to all power producers. By 1996 ~ n d e p e n d ~generators
could compete to sell electricity directly to large industrid customers, ef~ectiveiy
~ d i t i o n autilities.
By 2002, the policy will pennit all ele
of size, to purchase electricity
any utility or independe
rator on the
grid. No longer will the consumer be res
to buying e l e c ~ c i t yfrom the local utility.
A ~ o ~ p e t i ~market
i v e for gene~tionwill have been es~ablihed[2,3].
The system evolving in the USA provides i
ing competition and div~rsityamong
They vary from established utilities
and co-generators to small producers
that use renewable fuels and other non-utility genera~ors
y 1990, a decade after
reform movement got under way in the USA, co-gen
enerating capacity than were the ~aditionaiutili
C a ~ ~ f o r Edison
n ~ a buys 30% of its power from NUGs.
in M ~ c ~ ~ consists
g a n of 12 gas turbines with a generati
C ~ ~ p a nin
y ,~ i z o n ais
, an indepen~~nt
b~~~ custo~ers,n a ~ e l ythe Tucson Electric Power
Edison 141. Compared with the deregulation of I 0
monopoly requires a complete and ~
~ chane

Energy Generation under thc New Environment

property rights in the electricity supply industry in order to obtain the benefits of increased
efficiency and innovation. A shift from public to private ownership refocuses the goal O f
the producer towards profits. Pursuit of the latter provides a strong econon~icincen~ive,in
a competitive environment, to improve and maintain the quality of customer services,
monitor costs more closely, and invest in productivity-enh~cingt e c ~ o l o ~ i eThese
incentives are blunted by state ownership. With respect:to privatisation, the
since 1989 seems more germane than does the regulatory reform the USA has been
undergoing since 1978.
The European C o i ~ is ~addressing
i ~ these same issues and has agreed to draft
directives calling for open access in energy markets. As of January 1993, the E u r o p e ~
Commission seeks to let large users of electricity, those using 100 g i g a w a ~or more of
power per annum (aluminium, steel, chemicals, glass and fertiliser producers), to purchase
electricity from any supplier in the Community.



Competitive generation provides a market within which independent fimis compete on the
basis of price to sell electricity directly to large industrial customers, and to supply
electricity, via common carrier transmission, to distributors who in twn sell power to final
users [5,6], Produc~rsmay specialise or diversify by load characteristic. For example,
some may prefer to compete for long-term base-load contracts. These firms are likely to
own hydro and nuclear power plants. On the other hand, f m s with fossil fuel plants might
seek to supply base and cycling loads. Finally, producers with gas combustion turbines and
co-generators could compete to meet peak loads. Other firms may diversify and be ready to
compete for base, cycling and peak loads.
Prices charged for each type of service (peak and off-peak load, daily to ~ e a s o n a l ~
could be established by contract, 24 hour advance notice, and in spot markets. Unit
could vary by the amount of electricity purchased per period. As a result, customers
face more service options and a more complex pricing scheme. There are a nu
advantages to having a variety of types of generators linked to the transmission grid.
The first major advantage involves cost savings. At any given moment^ power is
supplied to the transmission grid by the firm with the lowest marginal costs.
according to merit saves resources and reduces the cost of generating electricity. Because
the different plants may have different load characteristics, peak and load duration curves,
generating capacity can be more fully utilised and additional capital resou~cessaved.
The second ~ d v a n of
~ competitive
generation is that a spot market for electricity will
develop. The ability to sell electricity on the spot market increases the ge~erators
~exibilityin scheduling production. The presence of a spot market means that less idle
capacity must be maintained in order to provide a given level of service re
Shortfalls and emergencies can be met by purchasing power on the spot market.
and supply are eq~libratedby flexible spot prices.
The third advantage o f competitive generation is that the market will provide an anray
of service standards that more closely match consumer preferences. Consumers could be
offered priority service with a schedule of electricity rates increas~ngwith the level of
reliability. According to reference [7], priority service offers significant efficiency gains
over random ration~ngwith fixed electricity rates. A compet~tivemarket in elec

Power System Restructuring and ~ e ~ e ~ l a t i o n

generation would offer a much broader m a y of services than do state n i ~ ~ o p o l i eors

r e ~ l a t e dgenerators. erhaps it is not surprising that 70% of USA private utilities, facing
new c o ~ p e ~ ~ tpressure
at the generation stage, now offer some form of voluntary
service 181.
The fourth advantage of competit~vegeneration is innovation. C o m p e ~ i ~ not
i ~ n only
leads firms to be more responsive to consumer demands, monitor costs more closely, and
compete:on the basis of price, but also provides an incentive to be i ~ ~ o v a t i vDevel
a new c o n s u ~ e service,
a better method o f reducing costs, or a faster way of d e a l ~ nwith
the innova~ora competitive edge.

The nature of the existing generating plants will affect the speed of reforms. In countries
where the coal industry has dominated the economy there has been opposition to
r e s t ~ c ~ r i nthe
g electricity industry, which usually includes a s u b s ~ t i a al ~ o ~ofn coalt
fired capacity. Deregulation of the electricity sector meant loss of a secured market for coal
w h i ~ hnow has to compete for its share in the market.
The nuclear industry in the UK was initially excluded from competition and subsidised.
The nuclear power s ions bid into the power pool and were
electricity due to the n-Fossil Fuel Obligation (NFFO). The
on the distribution companies to buy a set percentage of their electricity from stations using
non-fossif.hels. In 1990, this was mainly nuclear power. A Fossil Fuel Levy was placed on
the e l e c ~ i cbill
i ~ of all electricity consumers (which ~ ~ u n t toe 10%
d of the total bill) and
over 90% of the money collected was given to Nuclear Electric to cover gen
not recouped from sales of electricity to the pool [9]. In 1996, when British
formed, the subsidy to the nuclear power industry was abolished. The levy
and since then it has been used to support renewable energy projects.
Prices tend to go down as competition is introduced and are expected to fall
in the long-term. For example, in the UK prices have fallen since the market
open in^ and they are expected to fall even lower. In 1995 real prices, the price of
elect~cityfor industry decreased by almost 13% and the price for households by 6.3%
between 1991 and 1995. It is has been observed that i n d u s ~ prices
a ~ have decreased more
ousehold prices in most of the countries where reductions have occurred [IO].
ne of the conse~uencesof p~vatisationis the ~eve~opment
of the i n t e ~ a ~ i energy
c o ~ p a n yconcept - a company whose focus is becoming more global and more multile US electricity and gas companies have been ~ u r c h ~ electricity
Australian and UK companies have been heavily involved in setting
r projects in developing countries. Another change with privatisation
older value. Privately owned companies have to compete for funds in
the capital market and it is important to show that they operate efficiently
to do well in the business environment to attract investors. That means a comple~elynew
organisational structure and strategies for companies from what were used in the highly
r e ~ l a t e dpower industry.
Goal is expected to retain a strong position in power generation worldwide in the
future. In 1995 solid fuel, mainly coal, accounted for almost 40% of world electricity
pro~uctionand is expected to retain this percen~geuntil 2020. In 1995,60% of total world

Energy Generation under the New ~ n v i r o ~ e n t

consumption was for power generation and this is expected to grow to 65% in 2020. The
emand for coal will increasing~ybe dominated by Asia.
expect^ to increase from 25% in 1995 to 43% in 2020 E1 11.
There are a number of issues that will affect future use of coal and in some cases the
results are quite u n c e ~ i n .The Inte~ational Energy Agency (IEA) points
projections of coal use are subject to the outcome of competition between coal
urope, and to the policies adopted by governments to improve
nnance and comply with greenhouse gas reduction c o ~ i ~ e [InI].~ s

In the past, power systems were developed to transmit large amounts of power at hi
voltage from remote generati~gstations and to diskibute power at lower voltage down
millions of small consumers. This was the favoured pattern, allowing ever-l~gerpower
stations, mostly coalfired, to be built and achieving economies of scale and high efficiency.
The national grid evolved to ensure secure supplies to all consumers and centralised
conkol and supe~isionwas essential. In the present privatised electricity supply ~ n d u s ~
based on free trading of electricity as a commodity, central control is unwelcome.
er ever possible, electricity generation should be closely i
ed with space and
stems. newab able
process heating in a diverse array of combined heat and power
energy sources should be harnessed by large numbers of wind and wave machines, marine
t i d a l ~ ~ u r r eor
n ~s m ~ ~ - h y d rplant,
solar photovoltaic generators on roofs and small
generating plant close to farms supplying wood fuel or to sources of combustible waste
products. Generating plant will be small and dispersed and since CHP systems must be
located close to their heat loads there will be a natural tendency for most e ~ e c ~ c i ~
generation capacity to lie close to the consumer. There will be little need to transmit large
amounts of electric power over long distances. The h c t i o n of the power system will be to
handle the f l u ~ ~ a t i o in
n s load and in the output from the renewable power generators.
~ i g ~ - p o w long~distance
kansmission will be much less important,
In the current energy structure, a central power plant is the key facility providing
energy for houses, factories and offices. With decentralised co-gener
power and the d ~ l o ~ eofn renewables,
this situation would change.
would be less centralised and more dispersed. Network stability and frequency regulation
would gain in importance and energy storage would become very ~mportant.Ele
genera~ionis provided by a large number of small units rather than a small number
units, Co-generation is the generation, on site, of your own power and at the same time
taking advan~ageof the exhaust heat from your gas turbine or other engine to meet on-site
heat needs. Heat can be used to heat buildings, heat dryers, generate steam ~ o u an~ h
HRSG (heat recovery steam generator), or to provide air-conditio
a b s o ~ t i o nchiller. Power and beat can be generated locally from na~ural
using an efficient, reliable gas turbine.
The uncertainty in the USA today is what will happen to electricity prices. The major
c o ~ p e t i factors
are limited deregulation and lack of new generat~ngstations ~ ~ c u ~ a r l y
large coal or nuclear stations). Estimates range from modest decreases in prices, to the
levelling of local inequities, and significant increases driven by demand without supply.
Our view is that prices over the long haul will increase slightly with some local equities

Power System Restructuring and ~eregulation

being eased. All this means that for many sites cogen (distributed power) will be a viable
option for those willing to improve their competitive position through ~ e d ~ c e dn e r ~
New enabling technologies have now improved transport of eleclkcity in ~ ~ g h - v o ~ t a g e
C systems to the point where this may be cheaper, and use less energy, than ~ a n s p o ~ i n g
fossil fuels, for distances o f 5000 km and above. This might make it possible to link lowCOzpower sources where demand is low to distant regions where demand is high.


Trends in Conventional Electricity Generation Tec~n~logies

Co~ventionalsources of electricity supply will m a i n ~ their

i ~ central role in ~ r i ~ a r y
energy supply for many years to come. Further advancement of fossil fuel generation
technologies will increase the options for mitigating greenhouse gas (GBG) emissions.
This is particularly important for some developing countries and transitiona~economies
with abundant, low-cost fossil fuels, where electricity demand is increasin~rapidly. The
large share of nuclear and hydro in the generating mix of some countries already makes a
s i ~ i ~ c a~ontribution
to mitigation of GHGs.

World electricity production is expected to grow by an annual rate of 3% in the period
1995 to 2020 according to IEA projections. Coal retains a strong position in world power
generation and will continue so. However, gas is expected to grow faster at 6% than
solid fuels at 2.9% (e.g. coal) [I 13. This is because, in countries where gas is available at
competitive prices, gas-fired plants are cheaper to build and operate. D e r e ~ l a t ~ ohas
played a role in opening the way for gas to compete with other fuels. Coal is still the
favoured fuel in locations close to low-cost coal production (e.g. p a t s of North America,
Australia and South Africa), in areas where gas is unavailable or expensive (as in those
deveIop~gcountries that have coal available, like China and India), and in areas where
there are existing coal-fwed units.
Prior to deregulation, utilities tried to predict the future energy demand in their area and
build new capacity accordingly. In a deregulated energy market gener
current demand is and try to fill as much of the demand as possible
plants. The predicted growth in the demand for energy on a wor
provide an incentive for generators to build new plant or extend their existing capacity to
take advantage of this trend. Competition rules will determine the market players.
However, the only players in practice who can invest in new capacity are those who feel
they can achieve a competitive advantage. In deregulated markets this should not be market
access or cost of capital but a genuine advantage such as feedstock, technology, captive
market of heat, extension of existing plant to take advantage of existing assets,
refurbishme~t,etc. The possibility of having stranded costs would seem to rule out new,
ensive power plants. Most of the additional capacity is expected to come from
incremental i n v e s ~ e n t in extensions done as part of general ~ p ~ v e ~ e or
n t s
ma~ntenance.New plants are likely to be smaller, more cost effective, and close to areas of
demand that can compete effectively for local market share. This means that there could be
a swing away from large fossil-fuel-fired plants in the ene y mix towards sma~ler,less

Energv ~ e n e r a ~ under
~ o n the New Envirolment

intrusive plants sited close to the area o f demand. The fact that industrial sites are now
allowed to install their own genera~ngcapacity and export electricity to the grid could lead
to an increase in smaller scale distributed g ~ e r a t i n gcapacity.


~ Q w ~ r

The operation o f power plants is also changing dramatically in dere

Generating companies are no longer obliged to generate electricity;
generate and sell their electricity when they think it is profitable for them. This means that
most of the generators will want to operate their plants at base load where most profit can
be made. There is little incen~vefor the generator to provide electric~tyfor more expens~ve
intermediate and peak demand, which make up only a small portion of the market. As
d e r e ~ l a ~ i proceeds
an increasing number of players enter the system which is no
centrally controlled. This makes the quality and reliability issues more difficult to m
Experience so far shows that deregulated markets can reliably meet demand and are
expected to do so in the foreseeable future. The UK systems re~iabilityand availa~i~ity
actually increased between 1992 and 1997 when the transmission and dis~ibu~ion
was restructured [4]. It i s believed that the system will work without problems of security
of supply for the next 5-10 years.
Coal contracts are also affected by changes in power plant operation. There is a general
move to shorter term fuel supply contracts to match the electri
sales contracts in
deregulated markets. ~ ~ e x i ~ini plant
l i ~ operation i s an adv
the competitive
small-scale units
market where conditions change quickly. Distributed gene
could also give more flexibility to the system. An advantage of coal is the fact that it cm be
easily stored in stock~iles,whereas storing gas is much more complicated and expensive
and restricted to certain quantities. In deregulated markets demand and a v a i ~ ~ ~o fi l i ~
dictable and therefore the risk of disruption in fuel s u ~ p l yis more
es can ensure security of supply for the generator.

Utilities are forced to operate in a more reliable, economic and efficient manner and plan
their expansion investments more accurately. There are a number of reasons promoting
among utilities. These include economic interch~nge,Brm power and
energy transactions, wheeling, improved operating reliability and ~ ~ x i b iand
l i reduction
in installed generation reserves. Usually utilities construct new power plants to meet the
increas~ngdemand or to rep~aceold plants, which need large investments, ~ o w e v e r ~
~ t ~ r ~ o ~ ~utilities
e c t emay
d jointly install a generating unit in which the utilities may have
different or similar shares or the interconnected utilities may buy a certain perce
the output of a generating unit, which already exists in the other utility, Therefore, the
failure of a jointly owned generating unit will cause a decrease in the available capacities
of all the sharing utilities simu~taneous~~.
Because of this correlation, the conventional
model of a ~eneratingunit cannot be used to represent a jointly o ~ e generating
The re~iability modelling and evaluatio~methods of composite ~efierationand
transmission systems need to be extended when the system being analysed includes
generating units that are jointly owned with other interconnected systems. This is because

Power System R

~and c~ ~ r~e g ur l ~it i o~n ~

the modelling of jointly owned units causes two major problems. The first problem is that
they cannot be included in the area generation model in a conven~ionalmanner because a
jointly owned generator contributes generating capacity to two or more areas.
Consequently, a failure or derated state of a jointly owned generator affects all the sharing
areas. This condition cannot be incorporated in the traditional generation model, which has
an inherent assumpt~onof independence among generation models of various areas. The
second prob~emis with the transmission model. In the absence of jointly owned units the
transmission links are used only for emergency help and energy transaction^^ Since the
ontracts and the transmission c
ity states are fixed, emergency help th
n e ~ g h b o ~ nareas
g is fixed.
when jointly owned units are includ
reliability analysis of the system, common generation flows are present and vary depending
on the states of jointly owned units. Consequently, the emergency help that can be given to
neighbouring areas is dependent not only on the tr~nsmissioncapacity states and energy
contracts, but also on the common generation flows which vary according to the states of
the jointly owned generating units [12,13]. Further research on a detailed system
representati~nis necessary to consider the particular operating features of jointly o w e d
units so that their impact on the reliability performance of the respective power systems
can be i n v e s ~ i g a t ~ .
It is impo~antto ~nderstandthe market response to the increased risk associated with
the introduction of competition into the market for generating electricity, Typically a
v e ~ i c a l ~iyn t e ~ a t e dstate monopoly deals with fluc~ationsin demand and r ~ d o m
equipment failure by carrying excess capacity, including redundant backup capacity. It
may also address predictable fluctuations in demand by offering peak-load pricing
schemes, although the incentive to do so is weakened by state ownership or regula~on.
Competitive generation produces at least two additional sources of
complex pricing structure, and loop flow problems when independent
electricity into the transmission network. Moreover, electricity flows along the path of least
resistance. Thus, for example, electricity sold by Generator A to Industrial Customer
may not travel along the contract path that is, the shortest line within the network tha
directly links the buyer and seller, Depending on circumstances, electricity introduced into
the network at any point may give rise to loop flow affecting ail suppl~ersto the grid.
Loop Bow can disrupt the quality and reliability of service to everybody taking electricity
from the grid at the moment additional power is introduced.
If decentralised markets introduce additional risk, they have to provide a bro
ways of dealing with it. All of these sources of risk potentially influence the
service to the final consumer of electricity. In general, the market offers methods to reduce
risk and to price risk so that it can be spread or shared optimally.
Consider how a generator faces the risk of uncertain prices for electricity. Firstly, the
producer can sell power by long-term contract to large industrial customers and regional
distributors. ~ o n ~ a cspecifL
prices and adjustment clauses. Thus, only a small proportion
of its output may even be exposed to unknown price fluctuations [ 141. Se
the spot market on a regular basis offers normal returns because prices
mean over a large number of sales. By selling regular~yon the spot market, the producer is
reducing risk through diversification. Thirdly, the producer can hedge spot market sales in
the futures market.

Energy Generation under the New Environment

Fuels used to generate eleclricity are produced using the follow~ngfuel sources: namely,
coal, nuclear, natural gas, ail, hydrogen and renewable resources. ~ e n e w a b ~resources
include hydro power, geothermal, biomass, wind, solar and p~otovolt~ics.
Coal is the
predominant fuel source. ~ u c l power
e ~ is projected to decline her over the next 20
years owing to retirements of existing units, Generation from both natural gas and coal i s
pro~ectedto increas~to ofset these retire~entsand to meet the growing demand for
e l e c t r ~ c iThe
~ . coal trade has been increasing and is expected to continue doing so in the
future. It is expected to increase faster than coal production. Between 1992 and 2010 the
coal trade is projected to grow by an annual 4.3% whereas coal product~0nwill
2.3% a n n ~ a l ~[15j.
y Coal prices dropped during the 1990s in line with compet~t~on
with the fact that there is excess capacity for mining coal for the international market.
Cheap coal i s seen as being readily availabie in the short and medium tern. The ~ollowing
sections s ~ a r i s the
e discussions of issues related to the markets for coal nuclear,
natural gas, oil and renewable fuels, followed by electric power industry res
fuel markets.
Power generators will attempt to pass on market risks to coal producers and carriers
wherever they can. As a result^ coal purchase contracts will ~ i k e ~become
s ~ ~ in~ e r
duration and lower in price.
The existing capacity of the power industry in each country will play an important role
in its ~ t u r fuel
e mix. In the EU, 17% of the conventional thermal capacity is over 30 years
old, indicating that much of the plant is in need of refurbishment or replacement [16].
Where coal-fired plants already exist it is usually more economic to operate them rather
than build new gas-fired capacity. Refurbishing or repowering an existing coal-fired plant
can reduce costs as the entire i n f r a s ~ c ~ uremains
in place. Retrofit of pollution ~ n t r o ~
e ~ ~ i p m e nmay
be necessary to meet environmental standards. In cases where
h y d ~ e l e ~ ~a ~n ~ oi nuclear
tr y
power dominate base-load generation other fuels notab~y
coal and gas wiIl compete more strongly for position in the mid-merit market for

wer plants are expected to become uneconomical. ~ o m p e ~ i t i ev el e c ~ i c ~ ~

prices may be so low that nuclear power plant operators will not ee enough income to
enable them to recover the costs of operating and maintaining the ants and the costs of
capital ~~provenients,
such as steam generator replacements. In the immediate f u ~ e ,
some nuclear power units will be at risk of early retirement as a result of r e s t ~ c ~ ~The
additional inability of plant operators to cover a plants full costs, ~ n c ~ u d ~capital
n g costs,
under restructuring produces stranded costs. For nuclear plants, operating costs after
deregulatio~will be driven mainly by plant size, age, capacity factors, and requirements for
new c a p i ~ limprovements. Average fuel costs make up only about 0 n e - f o ~ hof the
operating costs for nuclear power plants, but the competitive environment created by a
r e s ~ c ~ electric
e d power industry will encourage nuclear power plant operators to ~ d u c ~
all o ~ e r a t i ncosts,
~ inc~udingthe costs of purchasing and managing nuclear fuel. ore over,
if early retirements of nuclear power plants result from competition in electricity markets,
the deniand for nuclear fuel will be reduced. To compete, suppliers in the n u c l e ~fuel

Power System ~ e s ~ c ~ rand

i n~ge r e ~ l a t i o n

~ d u s t r ywill be forced to reduce prices or improve efficiency, In 1996, 434 nuclear

reaclors in operation in 32 countries produced 2400 TWh of electricity avoiding an
estimated 10%of global human-made emissions of carbon dioxide.

gas is primarily used during peak demand periods and is the prefe~edenergy
source for new generating capacity. The electric power and natural gas industries are both
network industries, in which energy sources are connected to energy users through
~ s m i s s i o nand distribution networks. As the restructuring of electric^^ m a r k e ~
proceeds, the develop~entof htures contract markets and electronic auction markets could
lead to greater integration of the electricity and natural gas industries and the em~rgenceof
competitive energy markets. The availability of market information and public markets for
natural gas and electricity will be a key to the development of an integrate
for those commodities.
The use of natural gas in electricity generation has been growing rapidly. According to
the IEA World Energy Outlook, gas-fired e l e c ~ c i t youtput will almos~double ~etween
1993 and 2010, even under an energy savings scenario. Low capital cost, short
construction time and competitive fuel price make natural gas generation attractive,
especially in deregulated markets. Technologies being
in current c o ~ e r c i a l
operation are gas turbines and gas engines. The rapid devel
o f gas turbines in recent
years - bringing higher efficiency, lower cost, reduced NO, emissions and increased
ope~ationalflexibility . puts natural gas electricity generation tec~ologiesin a position to
make a large contribution to GHG mitigation. For large gas turbines, complex cycles (Le.
reheat, intercoo~edcycles, etc.) may hrther improve efficiency. Gombined-cycle power
plants attained thermal efficiencies of 40% in 1970, and are now close to 60% ~ ~ i c i e n t ,
Gas turbines and gas engines for small-scale generation need firther to improve their
e ~ c i e n c yprice
and e n v i r o ~ e n t a performance
to gain wider application in the market,
Conver~iontechnology using electrochemical reactions, namely he1 cells, should become
competitive in the near future. Natural gas-fuelled fbel cells can attain 50% e f ~ c i e n ~ y
(under very h i g h ~ t e ~ p e r operation),
which would be further i ~ ~ r o v to
e d70% if used
in combined cycle.

Oil prices have ranged between US$l0 and 20 per barrel during the 1990s and &ere is no
sign of any shortage in the short or medium term. Owing to assumptions about electricity
industry restrucbxing prompting the construction of Iess capita-intensive and more
efficient natural gas generation technologies, the share of coal generation will e ~ e n ~ a l l y
decline while the natural gas share will continue to increase. With the d e r e ~ ~ a t i oofn
electricity generation and the resulting incentive for power generators to lower fuel costs,
the use of relatively expensive residual he1 oil for electricity production is likely to decline
even fisther. As a result, petroleum refiners may be faced with a growing ~roblem:that is,
how to dispose o f leftover residual fuel and petroleum coke. Among other options, two
po$s~bilitiesare related to electricity markets: (1) selling petroleum coke to e l e c ~ c i t y
generators for use as a fuel component, and (2) gas~~cation
at the refine^ by using
integrated gasification combined-cycle (IGCC) technology to produce steam for process
heat and for electricity production.


Energy ~ e n ~ r a t i under
o n the New ~ n v i ~ o ~ e n t

~ e c a u s ee l e c ~ c i t ygenera~ionfrom renewable sources generally is more

conventiona~sources, constrained competition in electri
result in a reduced role for renewables. As a result, a variety of propos~~s,
schemes and policies incIude specific ~rovisionswhich are used to s~pportthe c ~ n t i n ~ e
ment and use of renewable energy. Renewable portfolio standar
ing and
charges are among the programmes being considered. Green
pric~ngprog~ammes,already being im~lementedby electric utilities, may also provide a
se c o n s u ~ demand
for electricity from renewable fuels. The role of
y sources in competitive electricity markets will also depend an the cost
of the indiv~dualrenewable fuels. In addition, because renewab~ee ~ e r g y
generat~g~acilitiesgenerally depend on the availability of energy resources at s p e c ~ ~ c
sites, often at sites remote from major electricity grids, transmission issues will affect the
pene~ationof renewable fuels in the electricity ~enerationmarket.
e an essential element of the climate change p r o g ~ ~
ssions and ~ ~ ~ i ~ clower
a n levels
~ l y of other ~ ~ l ~ u t a n ~ s ~
ort for renew~bles,policies and prog
stry to become comp~titive.
supply a proportion of renewable powcr
ren~wable~eneratorsc ~ n ~ ~ e that
n c ethere will be a market for their pro
genera~ionschemes, using established te
power at prices which are more or less competitive
mains~eamcoal and gas. Figures 1.1
1.2 show the changes in the arke et shares and
the geneTa~ionmix ~ ~ s p e c t i in
v ~the

Links First Hydro Others

1pp* 7%




-. .



1.1 C ~ a ~in~the
e market



Power System Restructuring and Deregulation



igure 1.2 The generation mix

Althou~ha number of the technologies are inherently small-scale c o m p ~ with

e ~ central
station power generation, this has some distinct advantages suc
d operation. As electricity markets are restnuc
is likely to expand and renewables will become
There is a more diverse range oE techno~ogies,
0th their technical and economic devel
energy crops, p h ~ t o v o l ~ i cfuel
s , cells,
ass residues, wave power and geothetrnal energy. The world is c h a n ~ i nand
es are driven by the use of energy.

n operates on a small to m
d combined cycles can also
a d v ~ ~ of
g er e m o v ~ ~allg p ~ i c u l a t e sfrom the co
iency of over 85%. This teclmology is close
Eurther ~evelopmentis the fuel cell, where a
version at conve~ingche
i authorities, difficult
f trade or promotional orga~isatio~s
w tariffs for sale of bi
ackup electric supplie
costs also consti~teserious barriers.

Energy Generation under the New Environment'



Fuel Cell

A fuel cell consists of two e~ectrodessandwiched around an e ~ e c t r o l ~ e ~

over one electrode and hydrogen over the other, generating electricity, water and heat. Fuel
cell systems will compete with other distributed generation technologies, inc~uding
micro~rbinesand reciprocating e n ~ ~ iavailable
at prices competitive with e x i s t ~ g
forms o f power ~eneration.Fuel cell systems will have a competitive advan~agein that
they can be more easily scaled to residential size and will be more efficient in handling the
load profile of residential customers. They will be quieter, e n v ~ o n m e n ~cleaner,
efficient, and less expensive to install, service and maintain. Fuel cell systems will also
te with solar and w~d- ower red systems.
enerative fuel cell technology, National Power rece
developed a new electricity storage technolo
change the way power systems o f the future are planned and opera
the world's most ad~ancedr e ~ e n e r a t ~fuel
v ~cell t e c ~ o ~ o gRe
be attractive as a closed-loop form of power generation. Water is separated into
and oxygen by a solar-powere~el
water. The water i
cell, which genera~eselectricity, h
solarpowered ~ ~ e c ~ o ~and
y sthe
The e ~ e ~ ~ ~ o ~process,
h e m ~which
~ a l operates like a giant rechargeable b a ~ has
~ the
e ~ ~
potential to deliver commercial, operational and environmen~~
benefits for electricity
suppliers worldwide. It stores electricity when demand and costs u e low and releases it
when demand and prices are high, removing the need to call up more expensive pawer
plants. The system, which can deliver power instantly, can therefo~eassist deman~
planning, improve the use of power station assets so that less capacity is n~eded,enhance
operational. control and give customers greater security of delivery. It will also offer lower
lifetime costs than convent~onalstorage. The single biggest i n v e s ~ e n ~
Regenesys is that: it will offer lower lifetime costs than either pump
ry plants - energy storage that could curtail peak demands
stored, power electronic developments offer 8 fast respo
Work and electrical DC energy stored in batteries. These considerations
underline the potential value of energy storage in curtailing daily peak periods and that it
would most e~ectivelybe located near the source of load variations, the consumers in the
distribut~onnetworks [183. Coupkd with advanced power electronics, storage systems can
reduce h ~ o ~d iis ~co ~ i oand
n s elimina~evoltage sags and surges. Most ~istribu~ed
o n ~so
~ that,
storage y ~ ~ m
can be made ~ u l t ~ - ~ n c t with
~ o nlittle
a ~ or no ~ d d ~ t i cost,
example, both uninterrutable power supply (UPS)and energy ageme me^^ applications
can be served by the same equipment. In combination with renewable reso~ces,energy
storage can increase the values of p~otovoltaic(PV) and w~nd-generated e ~ e c ~ ~ c ~ t y
supply ~ o i n c i d ~with
n t periods of peak consumer demand. Energy storage systems
used to follow load, stabilise frequency and manage peak loads. ~egenesyshas a.
number of distinct a d v ~ t a g e sover existing electricity storage technologies like
hydro rind battery storage. It offers all the benefits of pumped-hydro, but can be located
here on a power system thus avoiding environmental problems. Though similar to a
battery storage plant, ~egenesysis much more flexible. Unlike a battery, the power o u ~ u ~
and storage capacity can be specified individually, Based on h e 1 cell technology,
~egeneyscan be built in modules to the required size ranging from 5 to 500 megawa~sof

Power System R ~ s ~ c ~ rand

i n ~g~ r ~ g u l ~ t i o n


capacity. It i s able to provide vital services to elec~icitygrids, ~ncIudin

voltage control. Regenesys could meet peak demand and maximise inve
allows better use to be made of the cleanest generating plant by reducing the need to
operate less efficient peaking plant. It can also enhance the value of renewable generators
such as wind and solar power.



Cunently some 50 countries have major wind power ins~allations~

Europe is presently the
most important market but demand in Asia is growing strongly. Ease o f rapid installation
(six to nine months) and a free local source of power make wind an attractive technology
in developing countries.
Over 1300 MW of wind-electric capacity has already been instal~edin Germany and
more than 1000 M W is on-line in Denmark. The Danish goal is to provide 10 % of its
elecwicity consumption through wind-electric energy by 2005 and more than 40 94 by
2030. At about 4 US cents per kW of installed power, electricity from Danish turbines now
costs around the same as the average cost for electricity from coalfired power plant.
However, there is no such thing as a single price for wind energy as the costs depend on
both wind speed and the accessibility of sites. Wind-electric energy has the potential to
supply 25 % of Europes electricity needs. Some countries could also export power to
neighbour in^ countries.

Potential applications of PVs range rom basic electrification for the 2 billion people of the
world without electricity to the integration of PVs in building structures in deve~oped,
urban areas. Customers need complete systems of PV modules, panels and arrays to
provide electricity appropriate to their needs. Improved light-to-electricity conversion
efficiency of individual cells is less important than reliable, integrated systems. The
flexible thin-film amorphous silicon panel is at the forefront of PV technology. D i s ~ i b ~ t e d
generat~onwith PVs has been tested to relieve substation o v ~ ~ h e and
~ ~ as
~ na gmeans to
defer transmission or distribution system upgrades. Remote locations in developed
countries are also prac~icalapplications for PVs. ~xamplesinclude water p u m ~ ~ n fence
and radio station power supply. PV is one of the most flexible technology
s u ~ ~options
available for electric power product~onbecause they can supply loads from
several watts to megawatts.

More than 350 MW of electricity are generated by commercial solar-thermal power plants
in the USA. To exploit s o i ~ - t h e ~ apower
hlly, broad~r coop~~ation
g o v ~ ~ m e nelectric
utilities and private industry i s ne~ded.The major investments ~ieeded
to develop and market solar technology must be supported by stable ~ o n g - t re ~
e ~ l a ~ o ~
policies, which can only be provided by government. For example, in the UK recent

Energy G e n ~ r ~ t i under
o n the New Environment

studies point to the need of tax equity to improve the economic ~ompetit~veness
of solarthermal plants more than ~echnolog~cal

World concern over carbon emissions, new domestic pollution regulations, ~mprov~ng
small-scale technology, and the: prospect of open competition for energy markets are forces
that converge to demand greater efficiency in energy generation - to lower h e l costs,
iiicrease marketable products and reduce emissions. These forces argue strongly for a new
paradigm o f dispersed, combined heat and power (CMP) plants that have double the
efficiency and produce half the pollution. Although large units will continue to operate in
the short term, most will eventually be replaced by new facilities and virtually all new
growth will come in the form of small units.
Readily available technologies now exist to combine the generation and supply of heat
and power. By capturing unused heat energy, generators and consumers can, in effect, use
the same fuel twice. Combining heat and power production reduces the net fuel demands
for energy generation by supplying otherwise unused heat to residential, commercial and
industrial consumers who have heating and air-conditioning needs.
CHP technologies can be widely implemented. In almost every case, such teGhnologies
will save enough money, now spent on fuel, to pay for their capital cost. By combining
roduction and supply, 80 to 90 % of the useful energy in fuel can be put to
beneficial use. When these plants extraGt steam from the turbines ar relatively low pressure
to drive industrial processes or provide heat, they lose some electricity production, but
capture all of the heat, eliminating the use of other fuel to make this heat. Total ef~ciencies
can reach 90%, d e p e n ~ n gon how well the electric and thermal needs are matched or
balanced. CHP takes energy from a central electric plant and distributes it to end users as
steam, hot water and chilied water using piping networks.
An increase in efficiency of 1% would result in a 2.5% reduction in CO, em~sions,An
UK study suggests that half of the CO, savings required up to 2010 can be met most casteffectively with CHP. CHP can reduce fuel use, cut emissions and save money. Policy
makers should take a ~ ~ ~ asteps
~ i tov encourage
use of CHP. The technology is ~eadily
available, has a net economic benefit and can cut fuel consumption and pollutant emissions
in the e n e supply
~ ~ ~industry in half. There are many ways in which r e ~ l a c i nseparate
heat and power generatiQn with CHP systems can reduce emissions s i g n ~ ~ c ~ n tFor
example, producing 1 kWh of electricity, and a given amount of heat, from hard coal in a
CHP system can reduce emissions by almost 30% compared with producin~both
s ~ p a ~ a t efrom
~ y the sanie fuel. Using natural gas in the CHP system can reduce e~issions
by almost two-thirds compared with generating the heat and power separately from coal.
CHP meets energy needs and can save money for a wide range of energy c~stomersincl~dingpublic sector users - and also helps preserve the earths precious energy
resources, reducing the impact on the environment of harmfbl pollutanls. The GHP shares
of European power generation range from about 34% in the Netherlands to about 6% in
Sweden, s ~ ~ g e s t i nscope
for large increases in some countries. Energy m ~ k e t
deregulation could produce more favourable conditions for CHP, by increasing investmen<
innovation and market entry, and decreasing the costs of backup power and natural gas.

structuring and ~


capital costs of these systems may deter

consumers inter

er such i n v e s ~ e n t under

is fair. In some

renewable energy sources. In Italy, for example, new legislation requires that from 2001 all
generators and ~ m p o ~ e of
r s electricity will have to supply into the system a quota
generated by renewable sources [X 91. The EU directive allows member states to
n with public services where this is necessary in the general interest of the
vided they comply with Community law. Examples could be an oblig~tionfor
to p ~ c h a s ea certain percentage of electricity from r~newableenergy
sources or an obIigation for distributors to supply all customers in their area at an equal

s been good value, and now it is even more so, with the UK
g o v ~ ~ m e n tdecision
to exempt
d-quality CHP from the Climate Chan
starts in April 2001. This exemp
will apply to electricity generated fro
CNP and used on site or sold directly to other bus~ees.The govemm$nt belie~eswith
f a fair and appropriate fiscal and r e ~ i a t o~ ~~ e w o r k ~
other measures such as negotiated ag~eementswith indu
ewable genera~ionand efgcient CRP will be ~creased,This should
deliver substantial increases in CBP capacity in the coming years. It should en
govemment to a ~ ~ o u n cin
e , the coming months, a new CBP target of around 10
of the draft Climate Change P r ~ ~ a ~that
m would
resent more than
s CHP capacity. Action by the UK government an
essential to provide a market environmen~with incentives and penaiti
that the new tec~ologiesbecome available at competit~vecost and in ample quantity. For
generators, there have been concerns about treatment of ~ ~ s ~ i bgeneration
o ~ i they do not
by public electricity suppliers (PESs), especially distributed e n e ~ ~ t i that
er the new a~angementsa dis~ibutedgenerat~rowned by a PES will be
to formal arrangements with the distribution business in the same w
ted generator. The same r e ~ u i r e m e ~tot p u b ~ i ~the
h a
minimise the risk of the ~S-ownedgenerator bein treated in a more favourable way than
The p o ~ ~ t decisions
~ ~ a l set the economic framework in which
n e ~ o r k sw311 d e t e ~ i success
or failure in meeting the target. Private deve~o~ers
install the CHP and the renewable energy plant if they see a return for their investment, If
developmen~sare to happen, unpopular measures will be required, such as
ssions, incentives for the deve~opmen~
of s u i i ~
n ~~~ l a~t i o~nand
s ~ the
relaxing of restrictions imposed by ~ ~ ~ regulations.
~ ~ i Inn order
g to meet the new
o b ~ ~ ~ a tai ~uppIier
can either supply the requ~redamount of renewable e l e c ~ i cor
~ buy
upplier who fails to meet the obl~gationwill be required to make a
government has recently announced the basis for its new renewable
energy support mechanism. Suppliers will be able to meet their obl~~ation
~ ~ t h by

chasing tradable green c e ~ i ~ c a t eA

s .~ ~ e ~ i a ~ v e ~ y
purchas~g~enewableenergy or by
of their obligatio~~
able to buy out a
ligaticsn and the associated inc
e total cast of meet
t ~ o to~ the
g end
~ user. In addition, the provision of a
le sources at p r e ~ ~ uprices
m via the NFFO and also the D
's New and Renewable Energy ~ r o g r has
~ iresulted
There are a number of le~~slative
and policy ~ e ~ ~ l o ~ mc e~net ns ~inl yhand h hat will
impact on d i s ~ r i ~ u ~g e d~ ~ r a t i oand
n influence its growth. The Utility Bill is aimed at
p u ~ the
~ customer
first. The Bill will ~ntrodu~e
i r n ~ ochanges
~ t
to the I98
Act. These changes will include the in~oductionof new ~ a d i n g
and seXling electricity, separation ofthe PES supply and dis~ibuti
ion on s u ~ ~ l i etor smeet targets an renewable electricity. AI1 of these c
e ~ m ~ l i ~ a t i ofor
n s some if not all distributed generator^. In gove
for ensunn that energy e f ~ c ~ e n c y
d e p a r ~ e has
~ t a ' een ~inister'with responsibi~~~y
targets are met. Tar~etshave been set in some ~ ~ ~ a for~ sourc~ng
e n ~ene s
renewable sources (such as wind) rather than conven~~onal

has led the e l e c ~ c i t yi ~ d u s to
t ~focus a~entionon the costs of
and provides incen~ives
ors to reduce their costs and ~ ~ i r n itheir
s e ri
investing in smaller scale
Capital costs, construction time, h e 1 costs, up
r n ~ t e n a n c ecosts will
d ~ c ~ s i oonn what p~antsare

osts ~
e on the
~ s pee c i ~~site
~ as~ well as the s ~ e c i ~ c a ~(size,
i o n oper~tiona~
reliability, e n v i r ~ n m performance,
safety r e q u i r ~ m ~etc.).
n ~ , Costs will be
ant built an the gr~enbeltCO
existing ~ i i f r ~ s ~can
c ~ber used.
Plants close
oses and avoid costs for CO
rent sourc~sas each project is site
s-fired plant can vary &om US$300
om ~ S $ 9 ~ ~for~ W e
advanced c o a ~ - ~ r e

Power System Restructuring and ~ e r e ~ i a ~ o n

corresponding to the replacement of major plant components after 20-25 years, whereas
coal-fired plants can reach up to 30-40 years of life.
A l ~ o u g hgas-fired tecknology is cheaper in U S $ ~ W eterns there are other factors that
should be taken into account. Natural gas is not available in every country and prices are
not always competitive. Moreover the i n f ~ ~ ~ c ttou produce
than the equivalent costs for coal. As discussed
more capital ~ntens~ve
upstream capital costs are considered in the competitiveness of gas
coalfired plants then the capital expenditure associated with both ~echnologiescould be the
~ can outweigh the difference
same. The high costs of the pipeline network to t r a n ~ p ogas
in capital costs for plant construction. If in place, the electricity generator can benefit from
d build cheaper gas-fired plant. However, as d e ~ a n d
cture will be needed. It is estimated that to c
in Europe (1.7% annual growth from t 999 to
i n f r ~ s of~ US$l00-200
c ~ ~ ~ billion will be required [23]. Such inv
unde~akeiionly in the fr~meworkof long-term contracts and it i s unc
rofitable in competitive electricity and gas markets.


Technology Advances - Clean Coal ~ ~ c ~ n o ~ o ~ i ~ s

Clean coal technolog~esis a tern used for ~ e c ~ o l o g ithat

e s achieve a higher effici~ncyand
ns for converting thermal energy to electricity than conventio~alpul
on (PCC) with subcritical steam and without emissions control. The
also u s ~ dto include e ~ s s i o ncontrol systems such as 0, control equipment. Clean coal
technol~giesare the way forward for coal as they can ensure compliance with the
env~onmentalstanda . There has been considerable effort to develop these
t e c ~ o l o g ~at
e scompe~itivecost eserves of coal are large and w i d e l ~~~stributed
likely to continu~to be widely used, so more efficient and cleaner coal technologies
(CCTs) are an i i n p o ~ a noption
in a future energy strategy. CCTs will enable the use of
coal. with higher ene~gyefficiency and minimum e n v i ~ o n ~ e ni ~~paa~c t s .
types of coal technologies applicable to large-scale power ~eneration:
PCC t e c ~ o l o g ~ ewith
control e q ~ i p ~ e(n ~
ng fluidised bed combustion
C); pressurised fluidi
and ~ntegratedgasi~cationcombined cycle (IGCC) t e c ~ o l o g ~ e s .
status of these technologies today and a compa~son
technologie~with gas-fired power generation in various c
ing and construction of plants using these technologies worldwide
(241. CCTs can also be used to repower existing coal-fired power stations a~proachingthe
end of their lifetime, instead of buil~ingnew plant, and therefore r e d ~ c eoverall costs.
~ e ~ o f i pollution
~ ~ n g control equip men^ is also important as future and exis~jngcoal-fired
plant may need to meet increasingly stringent environmentai standards.

nergy is one of the most critical r e s o ~ c e sfor

that energy c o ~ s ~ p ~will
i o nat least do
facto~of up to five in the next 100 years. At present 1


Energy Generation under the New Environment

energy poses threats to the climate, with potentially severe enviroi~men~al

given the levels o f consumption likely in future, it will be an immense chal
the global demand for energy without unsus~inablelong-term damage to the environment.
This situation has attracted the attention of political leaders across the world, and at the
Kyoto meeting of the parties to the UN Framework Convention on Climate Change in
D e c e ~ b e rI997 there was agreement to tackle one aspect the amount of greenhous~gases
emitted to the atmosphere. The levels of atmospheric CO,, for example, have increased
from 285 ppm before the ~ndustrialRevolution to about 350 ppm now. Xt is now generally
accepted that there is a strong case for acting to mitigate the threat of drastic clima~e
change associated with the unrestrained continuation of this trend. The Kyoto meeting
produced pledges by the industrialised nations to cut their GWG emissions, by 20 12, to an
average of 5% below the 1990 levels.
Deregulation could play a positive role by giving flexibility to different plants or even
countries to trade emissions. In this way a generator could have a portfolio of plants
including some using renewable energy and therefore meet overall environmen~al
requirements. It could also help the development of less costly pollution coatrol
technologies. In the single European electricity market, however, where electricity will be
traded between member states, it is not yet clear where to allocate emissions. It could be
the country where electricity is produced or where it is actually used, This is particularly
important in the view of commitments to reduce GHG emissions.
US e n v ~ r o n ~ e nregula~ions
have caused a niajor shift in demand for lower sulphur
coal supplies. Since the 1990 amendment to the Clean Air Act, there has been a noticeable
shift in coal use by ~eneratingcompanies in the USA towards lower sulphur coal.
~ e r e g u I a ~increases
the o p p o ~ n i t i e sfor using CEiP, since the power ~ e n e r a ~ ecan
more easily be distributed and sold. GWP units can supply both electricity and heat at the
same time, achieving high efficiencies and therefore reducing emissions to th
compared with separate generation of electricity and heat. In all c o u i i ~ ~ s
economical on industrial sites or community heating schemes where there is
heat. In deregula~edmarkets industrial users can set up a small CHP plant on their sites to
sup~lyheat and sell any surplus electricity to the local grid. Before deregulat~onthis
practice was either not allowed, or at least not encouraged in many countries 1241.
There are two ways to reduce GHG emissions. One way is to increase our r e l ~ ~ n cone
nuclear power; the other is to develop a wide range of alternative methods of e x ~ a c t ~ n g
energy from nature. The nuclear option is clean and feasible but it is hard to See
opin~onwould switch from its present hostility to the acceptance of a massive pr
of c o ~ s ~ c t of
~ onew
n nuclear power stations. The role of nuclear power is ex
decrease in Europe as the perception of its environmental and economic p e ~ f ~ ~ a has
substan~iallychang~d,In the 1970s nuclear power was regarded as a source of cheap and
electricity. High costs invoived in decommissionin~nuclear reac~orsand
the unresolved issue of nuclear waste have changed the image of nuclear plants. Italy has
phased out nuclear generation since the early 1990s after the Chernobyl accident. ~ e ~ a n y
decided in late 1998 to phase out nuclear power and is now d~seuss~ng
possible ways for
~ nplans
to start phasing out nuclear power in
implementation. The UK ~ o v e r n ~has
It is clear that the construct~onof new nuclear plants in Europe will cause pubI~coppos~~ion
and is unlikely to materialise, particularly in deregulated markets where such ~ n v e s ~ ~ n ~ s
are not competitive, as they are too expensive. The contribution frorn nuclear power to the
fuel mix is expected to decrease and will be replaced by other sources ~ne~uding

Power System R e ~ ~ cand

~ ~i e rn~ ~ u l a t i o n

power, the power system must evolve to deliver

11 reinfor~ethe need 10 ensure diversity f b m
~ a market
~ ~ thed e n v ~ r o ~ e nimage
t a ~ of fuels and t
e decisions taken by developers and ~ o ~ ~ ~ ~foc i a n s
~ o m p e t i t ~ oinn retail will certainly create
c o n s u ~ to
~ ~influence
~ ~ v e l o p ~ e nAlthough
cost an
~~a~~f a c ~ ao~~f ~ c t i nc g~ ~ t o choice^
~ e r as e ~ v ~ r o n ~
be ~ n f l u ~ c eby
d the e n ~ i r o ~ considera~io~~
e n ~
suppliers are ~ ~ ~ n or~ have
j n launched
e l e ~ ~ ifrom
c i ~r ~ ~ e w a benergy
projects. An opinion poll in the
6% of c o ~ s ~ i ~we ro su prefer
~ ~ to buy e l e c ~ from
c ~ ~renewable sources, but only 21%
e p r e p a r ~to~pay more for it. In ~ a ~ ~ f o ran
n ienergy
supply company has
~nergyscheme which gives eustomers the option to buy a part of or all
om r e n ~ ~ a benergy
sources 1251.
some c o u ~ ~there
~ e shas been opposition to the cons
1 r ~ a o ~ The
. poor environmen~lim
plants of an earlier g e ~ e r ~ ~ iThis
erive from the pollu
state-of-the-art pl
act on new projects.
where the r e s i d u ~are
~ re~sedin building ~ a t e r i a l scan ~ o ~ ~ n e ~
the ~romotionof CCTs and their excellent e n ~ ~ r o n m e nperfo
a role for coal plants in the re [24f.

f the ge~erating~ ~ n c t i ohave

n chan
d new capacity, and, if t h e i ~ ~ u d gise ~ ~ ~ t
face an additio~al u n k ~ o ~that
n is,
. To ~ i n i ~their
~ s risks,
ds and low unit capital CO
e, it is expected that ne

ercut c ~ n ~a ~
l ~u ~~ iicosts
ol ~~and
~ have

grid is fin e l e c ~ ~~~ s~ ~l ~set

ya of
t eg e~n e ~ f i ~ ~ r s
of c ~ s ~ o m[28-403.

Energy Generation under the New Environment

any studies indicate that distributed generation (DG) might play a s i g n ~ ~ c arole
n t in
the future power system structure. A study by the Electric Power Resea
(EPRI), for example, indicates that by 2010,25 % of the new generation will be distributed
[41]. Owing to variations in ~ o v e ~ m eregulat~ons,
different de~nitionsfor DG are used
in different countries. In England and Wales, the term dis~ibutedgeneration is
predominantly used for power units with less than 100 MW capacity. In Sweden, DG is
oRen defined as generat~onup to 1504 kW.In Austra~~a
DG is ofken defined as power
generation with a capacity of less than 30 MW. In New Zealand, DG is often considered as
generation up to 5 MW. There is no special definition of DG in the Californian and
N o ~ e g i a nelectricity markets.
A general ~ e ~ n i t i o
forn DG could be an electric energy source c o n n e c directly
to the
distribution network or load centre. DG is decentralised and located closer eo the point of
reater economic and env~ronmen~l
sense. Several main reasons have
combincd to make DG a technically, commercially, environmentally and, to an extent,
politicalIy attractive proposition.
Customers benefit from the success of DG because:

The use of distributed energy will allow improvements in the dispatchab~li~
resources and improve the integrity of the ~nstnissionand dis~ribu~ion
Identii~cationand use of alternatives to power generation, transmission and systems
controls will ~mproveload levelling, load manage men^ and overall power quality,
The system will become more robust in its ability to tolerate natural disasters, suffer less
damage and minimise the dependence upon the need for ~ ~ e d i ares~oration
of rhe
grid system.
Over~llsystem reliability will improve.
To get a better unders~ndingof the possible fbture develop men^ of DG in a com~eti~ive
market, some examples of typical DG applications are as follows:
~eiiewableenergy technologies, e.g. wind power or solar power. These projects
receive certain subsidies, or customers might pay premium prices for renewable en
Peak supply systems, based for example on emergency generators or on-site
uch systems ~ ~ i c a lsell
l y to the wer exchange for only a very short period per year
to capture exlremely high peak pri
CWP systems, e.g. district heating, whereby a high efficiency can be achieved and
additiona~revenue from selling heat can be obtained.
On-site generation based on microturbines or fuel cells. Electricity as well as hear are
most likely to be used locally.

1.I U.1

Market Regulation

In competitive power markets, DG competes with cenlralised power generation. Hence,

market regulatiosls should ensure that DG can act freely within power markets, similar to
centralised generation. Tt is, however, often argued that most market ~ e g ~ l a t i ~used

Power System K e s ~ c ~ and

~ n~g ~ r ~ ~ l a

worldwide have been designed with large centxalised generation in mind and that,
therefore, DG ofien faces significant barriers w~thinthe competi~~ve


The Power Pool

The power pool is used to create an efficient marketplace for trading electricity. The power
is usually
by a c e n ~ a ~ ~ s independent
sation that defines the
ards for ele
rice bids and the eva~uationof thes
s, as well as organising
the bidding and eva~uationprocedure. The evaluation of power p o d r e ~ ~ a t i o regarding
the t r e a ~ ~ofn DC
t is a very complex issue.
The main difference between various approaches for e l e c ~ c i t y~ ~ r k e ist sthat the
trading o f electricity through a power pool (or power exchange) is optional in some
a ~ , m a ~ d a t oin~ others, e.g. ~ n g ~ and
a ~ d
countries, e.g. in Nord Pool ( S c a ~ d ~ a v i and
~ a ~ ase well
as in the National Electricity Market in Austra~ia.In ~ a l i f o ~ i the
ation in the pool market is optional, except for three large private utilities. They
trade through the power exchange until the year 2002.
The rea~onfor a regulator to set up a m a n ~ t o r ypool system instead of an op~ional
market is usually to achieve a high market transparency~e.g. to prevent some large
~ ~ n e r ~ tfrom
o r s gaining market power. In ge~eral,all market pa~icipantswill b e n e ~from
arent power market however, other options are also possible to prevent large
rs g e ~ ~ market
power, e.g. by splitting up the generators as was done in New
The disadvan~ageof a mandatory pool approach is that all market p a ~ i c i p a n ~
have to join the pool. That leads to various fixed costs, e.g. members~ipfees, and or
energy fees. Both fees are a way to recover the cost for the operation of the power pool.
The me~bershipfee is usually a fixed annual fee and the energy fee is based on the energy
a c ~ a l l ytraded via the power exchange. These costs may be a major b
owned generation companies that focus on DG to enter the electricity
market. Therefore, exception to the mandatory rule were incl~dedin the re
~ n ~ l a nand
d Austra~iafor small-scale generation. The exce~~ions
depend on ~ n s ~ l l e d
ver, there is no obvious reason for a
capacity (30 to 50 M ~ of)the DG source. N
source with a capacity of 25 MW to be treat
fferently from one with a capac~tyo
u ~ h e ~ o rtechnical
limitations in a distribution n e ~ o r kmay
aural iand an urban distribution network. Mence, regulations based on a certain installed
capacity influence the way certain market pa~icipan~s
to behave.
The cost problem for p a ~ ~ c i p aint ~the
g pool market, however emains, even if certain
capacity limits are removed, This issue is of particular interest or 6 concepts that aim at
power generation, probably for only a few hours r year. To c a ~ ~the
ing e ~ ~ ~e o ma ~~p peaks,
~ c e these dis~ibuted~eneratorsmust p ~ ~ i c i p a t e
change. Therefore, high annual fees can be seen as a major barrier for
nerators to participate in a power market. As a solu~ion,the cost recover for
o f the pool e x c h ~ g eshould mainly be based on energy fees, In additio~,it
oned that within the national electricity market in Australia d i s ~ ~ u t e d
to sell all generated power within the d ~ s ~ b u t i no ne ~ o r k[
i~cantlyreduces the market o ~ p o ~ n i t of
~ esmall-scale
e treatment of the individual imbalance of each market ~ ~ i c i p isa ~ t
ant for fluctuating power sources, such as wind or solar power. Such

Energy ~cnerationunder the New E n v i r o ~ e n t

t e c ~ o l o ~ i have
e s the d ~ ~ a ~ that
v the
~ ~power
g e output during an upcornin
urs, can only be pre~ictedwith some ~ c e ~ afor
i ne ~
are three main ~ r o b l associated
with the pool price:

ts effectively bypass the pool.

a1 price is paid to all, it i s ~ a t h e m a ~ ~ c a l l ~
3. Average pool prices bear no relation to any real price p
hence of gene ratio^ has been falling steadily since 1990.
until about 1994, s t e a d ~ and
e ~ ~now seem set on an U

Figures 1.3 and 1.4 show the pool and

an er at ion, but most renew
low (33 kV or below) voltztge networks. So c l e c ~ i c i ~
wholesale prices, w h is wrong. The c h ~ a c t e ~ s to~ c s
c o ~ p l eof~ bids
001 capacity ~ a y ~ ~ These
lack of tr~sparencyin contracts for
onsumer c o n ~ ~ e n c eAs
. a result, n
Contracts for

re I.


needed reforms

Energy Generation under the New Environment

e n f ta sv o ~
renewable and CWP enerators, are c o n c e ~ e dsince the a ~ ~ ~ e ~will
and those gene~torswith ~nflexibl
tors with flexible and predic~ble
redictable o u ~ u will
t face
ill b e ~ from
~ ~thet
oked at in a wider context.
er d i s ~ b u t e dgenerators are likely to grow s
coming years and the government has, therefore, paid cmfbl attention to
t the economics of DC. It is i ~ p o ~ aton t
new e l e c ~ market
c ~ ~ that may adversely
CHP, obtain access to the el
e n s ~ r ethat ~ i s ~ b ~enerators,
~ ~ e d inch
META, a ~ ~ g e i ~ e that
n t s wil
d ~ s ~ i b umarket
~ ~ o on
~ fair terms. As p
to ana age their risks and achieve fair
osals too, to deal with the needs of

A n ~ i ~s l~a~~i care
e sthose

nctions ~ e r f o to~ s~u pdp o the

~ basic services of
c a p a c i ~energy
supply and power delivery. The costs for ancillary servic
s i ~ n i ~ c a nfor
t ; e x ~ p ~ine the
, USA the total costs for ancillary services are about

and mark^^ ~ a ~ i c i p a nthat

~ s we able
, the ancillary services are split up i

erat~onof ~ l e c ~ i yc ~istrib~ited
issues concerning real and reactive
r qua~ity[ 1 ~ , 3 0 , ~ 4 ] .

ution networks operate on a radial or open-r

designed broadly on
principle that load
reduces along the I
of each distr~~utor.
d i s t ~ ~g~~ t~ ee r~a t effectively reverse th
point on a distributor or interconnected network and this could affect c o n v e n ~ ~ Q ~ ~ 1
automatic voltage control schemes which cater only for conveneio
the design of protect~verelaying systems i s much more complic
going both ways.
buted generators, such as the majority of wind gene~atorsa d sma1Is~a~e
ased on induction ~ a c h i n e which
have no stead~-sta~e
generation c a p a ~ i ~There
i ~ . is a need to import react~vepower to provide Geld exci
ators, partic~lar~y
s ~ ~ c h r o n ogenera~ors,
can lead to localised increases
ich can potentially exceed the sho~-timeratings and ~ a ~ i ~n tg i n o~f s

~ o t e pn r ~o ~ l~arise
e ~ ~with systems us
create h a ~ o ~disto
s y s t e ~ ss ~ b ~ etoc trap

inversion (e.g. PVs

erspective, the effect of DG is that networks will be~omemore active in

le in behavio~r.From a g e n e ~ ~ o r perspective^
althoug~it may
to overall capacity, the c h a r ~ c ~ e ~ s of
t i cge~erators
tible, and network c o n s ~ a ~ could
n ~ s result in ~enera~ors

I n c r ~ a s ~use
d of CMP and co-generatiQn will result in lower usage of the ~ e ~ in? o r ~
terms of energy ~ a n s ~ o ~ ~ aand,
t i o ntherefore, po~entiallylower lev~lsof income. The
e to i n c r ~ s rather
~hanr e ~ u c~ ae p ~e~ l
olling a more compl~xand increasingly
~ ~ e r a t Qsuitably
located may also offer benefits to a d ~ s ~ i b u t oby,
r for ex
o f f s the
~ need
~ ~for~ re~nforcementor provis~onof other s e ~ i c e such
s as voltage
ayments to generators will be s u ~ s t i ~ t i nfor
g other ex~enditur

uppose t

is a need to replace a circuit breaker as

the fault level. It is i ~ p o ~ a to
n ts~ress

Energy ~ e n ~ ~ tunder
i o nthe New E n v i r o ~ ~ n t

installed because of all ge~erators.The contr~butionof each generator can be re~dily

onventional short-circuit analysis tools. These con~butionsto the s h o ~ ate the cost of replacing the circuit b
such as there would not be a need to
ear, cannot be credibly used to re
entry to recover all system reinforcement cost. In this case, the distri
rep~acesthe circuit breaker, and in the following price review peri
system charges accordingly to all generators with respect to their con~ibutionin order to
recover the system investment.
The der~vationof charges for assets that provide the connection of a discre~eplant to
the system should be differentiated from those for the use of the system. In the former case
the asset i s provided for a sole user and could have been financed directly, and even
owned, by that user. In this instance charges should be based on the histo~ccost of the
asset and a fair return on the cost of the capital provided by the d~stributioncompany. In
the latter case the assets are used by a number of system users, past, present and fbture, and
charges should be on the basis of a tariff differentiated by voltage. The d ~ ~ arises
c as
u ~
to how reinforce~entcosts of the infrastructure of the system should be treated when a
new user joins. There is also a d i ~ ~ with
u 1the~ costs of s ~ r ~ d iend~ a s ~ c t u assets
when an existing user departs.

In regions where renewable energy resources are abundant but usually situated in remote
locations, connection to the central power grid is expensive and in many cases ~ ~ ~to ~ c
provide. Small-scale, autonomous generation schemes, on the other hand, are both
economical and practicable. They utilise the energy resources available and supply the
consumers in the local regions. The system cost can be reduced by using c a g e - ~ e sdf,
excited i n d ~ c t i oge~ierators
(SEIGs) [47-521 since these machines are cheap and r ~ a d ~ l y
~utonomouspower systems often employ single-phase g ~ n e ~ t i oand
n dis~bution
schemes for reasons of low cost, ease of maintenance and simplicity in protect~on[53].
When a three-phase SEIG is used to supply single-phase loads, however, the stzator c
are s e r i o ~ s ~unba~anc
causing degrada~ion in generator perfo
o v ~ r c u ~ e novervoltage
efficiency and machine vibration. These
xtent by the use of the Steinmetz c o ~ n ~
can be alleviated to a c
the excitation c a p a c i ~ c eand load are connected across different phases. For isolated
operation, however, perfect phase balance cannot be achieved when the load is purely
The objective of this case study is to introduce a modified ~ t e i n m ce o~ ~ e c ~ i othat
a s ewhich supp~iessingleenab~esperfect phase b a ~ a ~to
c ebe achieved in a ~ e e ~ ~ hSElG
phase loads. A general performance analysis is presented and experimental results are
given to validate the princip~es.

~ ~ r ~ ~ ~ i ~t and ~

n ~




l ~

Figure 1.5 shows the mdified Steinmetz connection (MSC) for a ~ ~ l ~ - c o n nSEIG,
which supp~~es
a s ~ n g ~ e - ~load.
~ a s eIt is assumed that the rotor is driven in such a d~~ection
that it ~ ~ v ~the
~ stator
s e swinding in the sequence A-B-C, i.e. in h e same direction as the
positive-sequence rotating field. Hence, if A-phase is taken as the reference phase, B-phase
is regarded as the lagging phase. The main excitation capaci~nceG2and the auxiliary load
t e dB-phase (the lagging phase), while the ~ u x i ~ i a ~
r e s ~ ~ ~ a nRL2
c e are c ~ ~ ~ across
excitation Gapacitance 6, and the main load resistance R,, are connected across A-phase
(the reference phase). Compared with the original Steinmetz connection [54],it is no
that the auxiliary load r ~ s ~ s RL2
~ cand
e a u x ~ excitation
l ~ ~ capacit~ceC, have
introdu~ed.These circuit elements provide additional current components that result in the
flow of bdmced line currents into the SEIG.
In a practical aut~nomouspower system, the auxili load resistmce RL2 cm be local
loads such as lighting, storage heating or battery charging Alternatively, it could be a
portion of the remote loads.
For the purpose of analysis, all the circuit parameters in Figure 1.5 have been referred
to the base (rated) frequency hose
by introducing the per-unit frequency a and the per-unit
speed b [55]. Thus, each voltage shown in Figure 1.5 has to be m~ltipl~ed
by a in order to
give the actual value and the per-unit slip is equal to (U b)/a. Besides, the motor
convention has been adopted for the direction of phase and line currents.
The ~hase-balancingcapabiIity of the MSC for a three-phase S E E may be studied by
reerence to a ~ o l t a g e / c ~phasor
~ n t diagram. It is assumed that the values of C,and C,
are su~cientlylarge so that the SEIG has built up its voltage and is supplying the loads.
Figure S.6 shows the phaasor diagram for the SEIG under balanced conditions. Because the
is delta ~onnected,the line currents I,, I, and I3 lag the c o ~ ~ o phase
n d ~ ~
voltages V,, V, and V, by (ld, f d 6 ) rad, where lli, is the positive-sequ~nceimpedance
angle of the S E E .
The line current 1, is contributed by the current Ia through C, and the current lR2
through RL2. ~ ~ e a n w h ithe
~ e line
, current I, is contributed by -Icl(where Ictis the current
through 6 , )and -IR,(where IR,is the current through RLl). It can be shown that the angle y
between 1, and I, is equal to (4 2 d 3 ) rad, while the angle Sbetween -IR,and I , is (5x16
bP) rad. The phasor diagram in Figure 1.6 can be drawn only when la leads 12,which
implies that perfect balance can be achieved for values of #p ~xceeding2x13 rad.

Energy Generation under the New E ~ v i ~ o ~ e ~ t


~~g~~~1.5 Modified Steinmetz connection for three-phase SEIG

From the current phasor triangles in Figure 1.6, the following relationships can be deduced:

For a given total output power, (1.1) to (1.4) can be used to determine the values of the
load and phase converter elements required for perfect phase balance, provi
and a of the SEIG are known.
Equation (1.2) shows that B, vanishes when 53, = 5n/6 rad, which innplies that the
auxiliary capacitance C, can be dispensed with. When #, exceeds 5a/6 xad, B, becoines
negative, i ~ p l y i n gthat perfect balance can be achieved with an auxiliary induc~ance. In
practice, however, the full-load power factor angle of an SEIG ranges from 2 d 3 rad to
4n/5 rad, and hence it is very likely that an inductive element need be used.

Phasor diagram of SEIG with MSC under balanced conditions

A general analysis of the SEIG with MSC can be carried out using the method of
be ~ o n s t a ~ t
s ~ ~ e ~Gompone
i c a ~s. All the equivalent circuit parmeters are as
nce air gap
except the magnetisi reactance, which is a fbnction of the posit
voltage. With reference to Fig. 1.5, the following 'inspection equations' E561 may be


1 = G1+ J
y ,=Z1


~ q ~ a t (1.6
~ oj nimplies that z ~ r o - s e q u ~ voltages
and Gu~entsare absent in the SE1
solving (1.5) to (1.8) in terms of the delta system of synmetrical ~ o r n p [57],
o ~ the
~ ~
volta~eV, and nega~ive-sequ~nce
voltage V, c m be d e t ~ ~ i n e a :

Energy ~ e n e r ~ tunder
i o ~ the New Enviro~ent




Y2 -t- Y p + Y,,


Y2 +

Yp+ Yn

where Ypand Ynare the positive-sequence and negative-sequence admittances of the SEIG.
The input i ~ p c d ~ Zc, e of the SEIG when viewed across stator terminals 1 and 3
(Figure 1.S) is given by

Yz + Y p + Y n
3 Y pY , -iY p Y2 + Yri y2


Appiying ~ ~ c ~voltage
o f law
~ tos loop 1345 in Figure 1.5,

For successful voltage build-up, I, f 0; hence




Equation (1.15) can be solved for the excitation fkequency a and m a ~ e t i s i n greactance X,.
d X, have been d e t e ~ i n e dthe
, positive-sequence air gap voltage is found from
tisation curve. The generator performance can then be comput~dusing (1.5) to

The input impedance Z,n as given by (1.13) involves the generator admittances 5 and Y,

whose real and i m a g i ~ parts

a ~ are high-order polynomials of a
X,. As a result ofthe
algebraic manipulations involved, both R,, and &,! in (1.13) are extremely complicated
functio~sof the above ~ W Ovariables. Serious difficulties will be encount~redwhen solving
(1.15) using conventional techniques such as the Newton-Raphson method [47] owing to
the lengthy mathematical derivations required. To overcome these d ~ ~ c u la ~function
~ ~ s ,
minimisation t e c ~ i ~ is
u eemployed in this case study for solving (1.15). This is based on
c ebe ~ o ~
the o b s e ~ ~ t that,
~ o nor given values of a and X,, the input i m p ~ ~Z,~ can
The following scalar impedance function is first defmed:




Power System Restructuring and Deregulation


and X , are respectively the equivalent series resistance and reactance of&.
olution of (1.15) is next formulated as the following opti~isation

For given values of load resistances, excitation capxitancm and speed, determine the
values of a and X, such that thefunction Z(a, XJ is minimum.
It is obvious that Z(a, ) has a minimum of zero and the corresponding values of a and X,
also satisfj (1.15).
Any o p t ~ ~ ~ s a talgorithm
that does not require the evaluation of ~ ~ c t i do ~nv a t i v e s
may be used for the above problem. In this study, the pattern search method 1583 is used
for ~ n c t i o n~ ~ i m i s a t i o The
n . method employs two search strategies, namely exploratory
rn moves, in order to a r b e at the optimum point. A ~ n c ~ i evaluation
required each time an expioratory move or pattern move is to be made.
For normal opera~ionof an SEE, a is slightly less than the per-unit speed b whilst X, is
less than the u n s a ~ a t e dmagnetising reactance Xmu. A c ~ o r d i ~ ~bl yand
, X,,,could in
general be chosen as initial estimates for a and X, for starting the search procedure. In
practice, it was found that a smaller initial value for the variable a (say 0.97b) would give
more rapid converge~ce.
To simplify the calculations and for easy comparison, all the machine p~ameter$are
expressed in per-unit values using the rated phase voltage, rated phase current and rated
power per phase o f the induction machine as bases. TabIe I. 1 shows typical computed
results for the $xperi~en~al
machine. The hnction minima obtained imply that very
accurate so~utionsare possible. Over a wide range of load, the number of hnction
evaluations Nrequired to reach a solution varies from 350 to 450.
~ a b 8.1
~ eComputed results for SE16 with MSC







0.977 193
0.975 109
0.9672 18






b = 1.0;ail= 0.97b: X,,,

C, = 47 PF;Cl

= 2.48 p . ~ .
146 PF;R u = 2.3 P.U.

To illustrate the phase-bal~cingcapability of the MSC, ex~erimentswere c

2.2 kW, d e ~ ~ - c o n n ~ c induction
machine whose equivalent circuit data i s given in the
Appendix. The speed of the S E E was m a i n ~ i ~ eatdrated value (b = 1.0>and the values
of RLi9C,, RI.2 and C, were carefully adjusted until perfect phase balance was obtained.
ical results are given in Table 1.2, The good ~greementbetween ~ o ~ p ~ and

neration under the New Environment


results confirms the principle o f phase b a l ~ c i n gfor a three-phase

for perfect phase balance in three-phase S E E with MSC

































I .64






Normal: experimental values; bracketed: computed values

~iguresI .7- I ,9 show the steady-s~atep e r f o ~ a n c eof the SEIG with

elements fixed at the following values: C, = 47 pF, C2 = 146 pF and RL2
seen that the SEIG i s balanced at a load current (experimental value) of 1
co~espondsto a phase voltage o f 0.86 p.u. and a phase cunent of 0.92
electrical power output is 1.63 p.u. (1940 W, or 88% of rated power), of which 80% is
delivered to the main load RL, while 20% i s consumed by the auxiliary load RL2. Under the
above conditions, the p e r ~ o ~ a n cofe the SEIG is the same as if it were excited with
balanced capacitances and supplying a balanced load. For loads close to the balanced
opera tin^ point, an experimen~alefficiency of 80% can be obtained. Very good c ~ ~ e l a t i o n
between computed and experimen~~
results is obtained; hence the validity o f the
a1 component analysis and solution technique is verified.
1.7 and 1.8 show that, when the values of the phase converter elements are
ents and voltages in A-phase and B-phase may exceed the rated values when
the load is reduced, particularly when the SEIG has been balanced at heavy loads.
m e t h o ~to alleviate this undeirable effect i s to balance the SEIG at part load (say 80% o f
full-load current). The ~ e r f o ~ a n of
c ethe SEIG will then be a t ~ s f a c t oetw
~ we^ this load
and full load. Another method is to balance the SEIG again at smaller loads, which
involves ~ ~ l t i ~ vphase
a l uc ~o n~v ~ ~elements
controlled by a s ~ p s w
~ i e~ h i n gs ~ a t e ~ .

Power System Restructuring and ~ e r e ~ ~ a ~ i



igure 3.7 Phase voltages of three-phase SEIG with MSC

Phase ciurents ofthree-phase SEIC with MSC. P,: output power to main load RLI:P,:
output power to auxiliary load R,,


re 1.9 Output power and efficiency of three-phase SEIG with MSC

Energy ~ e n ~ ~under
a ~ the
o nNew ~ n v i ~ o ~ e n t


~ i m ~ i P~a~e-balancing
~ ~ ~ ~ r n e

In circumstances where it is not pract~cableto provide auxiliary loads, or when a u x i ~ i a ~

loads need not be supplied, the simplified Steinmetz connection (SSC) shown in ~
be employed. In this case, all the electrical power output o f the $E
to the sing~e-phaseload &,. The phasor diagam for the MSC (Figure 1.6) and
ondiiig equations (1.1)-(1.4)may be used to identify the conditions for perfect
phase balance for the SSC. Since the auxiliary load resistance R,, is absent,
in (I .3) is forced to a s s u ~ ea zero value. Accordingly the posit~ve-seque
angle bpo f the S E E must be equal to 2n/3 rad for (1.3) to be satisficd. F
and (1.4), the values of the load conductance and phase-conve~ers
in a b a ~ ~ c oepde r a ~ i ~ofnthe SEIG are: G,= 3 YJ2, B , = 43 YJ2 and

~ j ~ p iSteinmetz
i ~ e ~connection for three-phase SEIG

The a u x i ~ i ae~x c i t a ~ ~capacitance

C, is thus one-half of the main exci~a~ion
y s e l ~ c t i ~proper
values of C, and C,, perfect phase balance can be
of stator current.
with the SGG is simiIar to that for the SE1
ow equal to (0 +&). Figures 1.11-1.13 s
e x p ~ r i ~ e n pt ae~~ o ~ a n of
c e the SEIG with the SSC at rated s
excitation capacitances fixed at 110 pF and 55 pF re
at a load c ~ e n( te x p e r i ~ e nvalue)
of 1.13 P.u., whic
voltage of 0.985 p.u. and a phase current of 0.77 p.u. Under this
p.u. (1320 W) is delivered to the load and the efficiency o f the SEIG is 79.6%. Again very
good agree~entb e ~ w e ~the
n c o ~ p u t e dand experimental results is observed.





4 Phase vohges of t ~ ~ ~ p hSEIC

a s ewith S

hase currents of ~ h ~ ~ - p hSEIG

a s e with S





Energy ~ e n e r a under
~ ~ ~ the
n New ~ ~ v i r o ~ e n t

1 ~ ~ a c h has
~ nthe
e follow~ngpa~icula~s:
.4 A, four-~ole,50

three-phase, d e l t a - ~ o n ~ e ~ t e

e ~ i a c ~p ia ~r ai ~ ~(in
~ eper-unit
~ s values) are:


0.098 1


de A l m e r ~(PSA)
in Spain,
xi@ and success. The key c
its seaona~cycles. This results in s i
the collector f X d and the plant a

set of system p~ametersoptimised for a prescribed range of operations have proved to

cently, fuzzy logic control (FLC) schemes, which enco
like approach of processing and handling of information, have been
of n o n - ~ i n pe ~l a ~ with
~ s pKomising results. However, early studies show that in such FLC
schemes the optimis~t~on
of the if-then rule base is often a c ~ b e r s o and
~ e la~orious
rocess ~ ~ v o l v itrial
n ~ and error. Genetic algorithms based on the i i a t u r ~law
~ of
volutio~lend themse~vesas an ideal op~i~isation
tool to be used in c o n j ~ n c ~with
i o ~ FLC
syst~ms.This s ~ is one
~ of
y the first of its kind to show the d e v e l o ~ ~ eonft a
scheme aimed at o p t i ~ ~ s i the
n g response time of a solar power plant to input power and
t e m ~ e r a demand.

The solar power plant under investigation, Plataforma Solar do Almeria (PSA), in
Almeria, Spain

Figure 1.15 shows the block diagram o

a d i s ~ ~ ~collector
~ t e d field called the
solar collectors a r r ~ gd in 20 rows foming 10 p
long. The oil is pump d through the receiver tub
the receiver tube walls. The storage tank is filled with oil in the far end. The oil is heated
and then in~roducedinto the storage tank to be used for e l e c ~ energ
plant [64]. The system
feeding the heat exchanger of a desa~~nation
three-way valve located in the field outlet that all
its outlet t e ~ p e r a ~ Kiseadequate for entering into the
m in a dis~ibutedcollector field is
sired level in spite of disturba
level, cloud ~ ~ v e ~ emirror
n t , reflectivi~or inlet oil te

Energy ~ ~ n ~ ~under
a t the
i oNew
~ ~nviron~~nt






Distributed Collector Field

(20mws, 1 D loops)


Storage System

Power Conversion




Block diagram of the solar power plant


~ o n t r~~t lr ~ c t uorfethe Plant

ed to the plant with

shows the overall control bloc diagram of the FLC
ted that the o ~ t ~ e ~
the proposed GA optimisa~ionscheme. For this solar plant, it
t e ~ ~ e r aof~ the
r e field depends on other variables such as solar r a ~ a t i o nI and the inlet
~ has an influence but ch
tempera~reto the field 7;.,. Mirror r e f l e c t i v ~also
that it may be co~s~dered
constant. Hence dynamically the out1
e ~ ~ ~ e sass ea dn o n - l i ~ ~e ~n c ~ if oofn oil flow U,solar radiation
(of the ch
The linearised model is based on p a ~ ~derivatives
ATo with respect. to changes Au, dl and AT,,):


The ~ a ~ de~vatives
i a ~ can be co~isideredas transfer fitnctions re~a~ing
the var~a~ion
outlet t e m ~ e r a ~AT,
~ e to variations in oil flaw Au, solar r a d i a ~ i o ~
ATin, res~ec~vely.
The mathemat~~a~
model which accoLin~s
B ~ ~ f l u ies ncomplex.
~ ~ ~ To approximate these effects,
in series with the FLC s shown, has been develo


0.78691 - 0.485(~- 15 1.5) - 80.7


where !,is

the oil flow

U i s the t e ~ p e r a ~set
r epoint,




1.16 Control structure of plant

i f - ~ ~ e mles
n in

where aj, pi

xi ,6 i ,E, E

ase ofthe FLC as


I } , Rule 1 is not s i g n i ~ ~ a nwher~as
. It is found that using a higher number of
r o v e ~ e n ~ins ~ e r f o ~ a but
n ~ ei ~ c r ~ a s
~ i ~ n ~ ~ The
~ a entire
~ t i ~y h. r o m o s o ~
Xeis o f the f o ~ a ~

e there~orehas a total of 245 bits of i n f o ~ ~ a t i o n .

icai ~ ~ o r n ~ ~

Energy ~ ~ n e r a t under
~ o n the New Environment

11 1Z 10001 1 111 I 1000110000~00011111Q0
I1 ~ 0 0 0 1 0 0101
1 ~ 110001I1 0001I 100

The chromosome

Rule base consisting of 49 rules

7 ~ ~ r o ~linked
o ~to rule
~ ~base
e s

1.18. Firstly, the GA r
nto an ini~~alisatio~

Power System Restructuring and ~ e r ~ g u ~ ~ ~

Step 1:

Initiaiising pool by
randomly. (size=30)

geiierating chromosomes

Step 2:

run = run i1 ;/*mn = 0 initially */

Ben = gen + 1; /*gen = 0 initially" /
Calculating fitness of individual chromosome fram
initialisation or mutation pool.
Copying high fitness chromosomes to reproduction
pool. (Roulette Wheel method)
Selecting chromosomes randomly from mating pool
and crossover.
/*Mutation */
Copying new chromosome into mutation pool,
mutation probability is 0.001.

Step 4:

Step 6:

If gen = no-gen
Goto step 3
If run = no-run
Goto step 2

~ s e u d o ~ c or
o ~ the
e GA

~ x p e r ~ ~results
e n ~ on
l the simulator of the plant have been taken to verify the proposed
GA-FLC s c ~ e ~Ine .Figure 1.19, the effect of GA o p ~ ~ ~ i sofa ~thei orule
~ base on the
e r f o ~ a n c of
e the plant is illustrated. The upper graph shows the eiTor versus the number
of generations. The error, an index of the fitness of the c h r o ~ ~ ~ ois~seen
o ~ to
e , decrease as
. The middle graph show
bottom one shows the corre
emcnt of the dynamic response o
scheme on a day wh
tional PI control s c h e ~ e .It is
the plant's robustness when external
. Since there is only on
u n ~ ~ u ~d~fferen~
in any time interval, we
in real-time. The validity of the comparison ~ e ~ e the
e nPI and GA-FLC
~ 0 ~ s ~c h ~e ~0e slies
1 in the fact that the simulator is a proven ~ o of the
~ plant
e [63]
~ and
one can ~ ~ pthe~ solar
r eradiation in a particu~arperiod and use it as one of the i n p ~ to
the simulator. The simulator's output is then compared under different control schemes.
The current ~nvestigationis based on this principle.

Energy ~ e n e ~ a t i ounder
n the New E n v i r o ~ c n t

35000 30000 25000


20000 -



300 -

300 1




~ ~ f c con
t sthe ~

et point

~of thef planto by the

~ GA ~optimisa~~on

arison of GA-FLC with PI scheme un er extreme external dynamic c

neration under the New ~ n v i r o n m ~ n t


such as l a r ~ e ~ s expen
e ~ ~ s t cannot
o ~ be~ sec
~ s

Energy Generat~onunder the New E n v i r o ~ e n t


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~ a n a g ~ ~ ~ n t


Energy Generation under the New E n v ~ r o ~ e n ~

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1W e i ~ I ~
n t rao ~d u~~ ~to
i ~~n ~ ~ i m i ~~ uh t ei oo ~ ,
L.L. Lai, T.E. Tong, A opt~~isation
o f rule base in a fuzz
plant, ~roceedings ox the I n ~ ~ r n a ~ i o n~a l ~ n ~ ~ on
r ~ Pno w
c ee~ Utilip
~ ~ ~ e~ e~ s ~~ a~ and
~~ Power
~ ~~ roTechnologies
~ ~ n ,g 2000, City University, London, IRE]E,
p d 2000, p p . 2 2 ~ - 2 2 ~

A. ~

of ~using thea neural i

and genetic algorithm or fault secdon estimation, P E PrQceeding~ ~ e n ~ ~ f f ~

~ r a ~ ~and~ ~ ~ ~ . $~ ~s rvol.
~ ~o145,
~~ No.5,
u ~ ~~ eo ~ ,~1998,
e ~p ~~ e . s ~ ~ ~ - ~ 2 ~

Miss Vee Shan Uuen

Prof. Mwok Lun Lo
i ~S
The University of ~ ~ a t ~ c ~ ~ d e The U n i v e ~ of
~ l a s g o w~ ~ c o ~ l ~
~ ~ a s ~ ~ocwo ,t ~ a ~ d

The success
tisation o f the airline, teleco
~ e r e g u l a ~ ~ ~tructming of the electricity
ers in ~ r i v a ~ ~its~ vertically
i n ~ ~ g r ~el~ e d
in 1990 and 1996 ~es~ectively.
d Norway has encouraged other countries worldwide
at have been ergoin in^ energy ~ e r e ~ i l a ~~ i c~ n~ ~ d e
ain, Taiwan and ~ a l a y s i a .
s used to refer to what one wouM regard as
d e r e ~ u l aof~ ~~~ ~
l ~~ utiliti
c ~ c
le the two words are d ~ f f e r e~iteral~y,
Ironically, neither is th
~ e ~ t 2.5,
i o none
titi ion or o ono^^^^. It i s ther~fo
sive exercise of rn

~ e ~ ~ ~afaElectric
t ~ oUtiliti~s



structuring and ~ e r e ~ l ~ t i o n

the details of der

latiara of Electric ~ $ ~ l i t i e ~

2.4. I

exercise market power and control the price of e l e c t r ~ ~ i ~ .

itions where the providers of a service can c
ose that would be established by a coinp~ti~ive
actual prices and the prices that would arise from
the assumption that the generators are priceta
en a major impediment to price reduction in the Engl
Pool. Efforts are being made to eliminate market
~ a ~ ~ c u lhere
a r , will be a d r a ~ a ~reform
of the energy market
the year 2000.

Access to the ~ansmissionsystem is one of the main issues in energy

open acces
and sound r~gulationsare required to facilitate ~ransmiss~on
ng, TOA refers to the regulating construct such as the rights, obli
dures, economic cond~~ions9
etc., enablin~two or more parties to use a transniission
etwork. With equal rights of access to the transmission network, it has become ~ ~ a s i b l ~
or loads to arrange transactions with each other and hence c o ~ p e ~ i t i o n
is am on^ the key elemen~sfor facilitating competi~ionin the ~ ~ e r g y
on will look at the details of the two issues.


it^^^ in the ~~~e~~

~ o m p e ~ is~ the
~ ~main
o n goal of energy p r ~ ~ a ~ ~ s a Ideally,
t i o n . from
view, perfect ~ o ~ p e tis~the
~ ~iiiost
o i desirable
market structure.
cmre ~hara~terised
most notably by a situation in whic
are p r i ~ e ~ a ~and
e r sthere is freedom of entry into and exit from ih
ng to these three criteria: inde~endence,product s ~ i ~ s t ~ t u ~ a b i l i
wever, in any real markets, it is rare that all of the
Considering also the te
ints caused by the intrinsic properties
can be d ~ d u ~ ethat
etition does not exist in the e n e r ~ ~
by its social welfare. Social we~farei
d the benefit of the energy to socie
for it. ~ a x i m ~social
welfare i s
~equentlyoperates at a s ~ i b o p t ~level.
been introduced in most deregulated m
their own s u ~ p ~Retail
~ ~ r ~. o m ~ e ~ i t i o n
c u s ~ o m ~ rare
s abie to select their
ated by the issue of direct access
tec~nQlogy.In some countries9solid regul
costly for res~dent~a~
customers t

e issue of e n e r g ~subsid~es
the depos~t~on
s~randedcosts have also c o m ~ ~ ~ c efforts
a ~ e d on energy ~ ~ v a ~ i sne aform
~ ~of~energy
subsidies refers to those given to generators to purchase highly priced coal in order to
sustain the Iocal coal industry. Generators receive s ~ ~ n i ~ c a nfewer
~ i y subsidies after

e r ~ ~ l a ~OS
i oElectric

that time were su

e less WQ~hy
and i ~ v e s t o could
~ s end up b e ~ ba
n involves the d e t e ~ ~ ~ a t of
i othe
n degree of recove
e ~ a l i f o ~ Pool,
~ a n the 8
in the e ~ e c ~ ibill.

a price and the ~ a x i IIU~ u ~

tted offers are r ~ e lowest

, each seller i ~ ~ ~ i asub

are w ~ ~ ltoi ~make
i ~ avail

om a seIler 10 a buy
ed ~ a r k ~the
~ sQ,

~ n s u f ~ c ~because
e ~ t ne

r ion ~acilities~
henever each whee

~ ~ r e ~ l a of
t i Electric
o ~ i Utilities

o f the line is now res~aine by its t h e ~ alimit

perect~yinelastic ( e ~ a s t i c ii~s zero) mand which is no
generator 61 is met when 6 1 is forced Buy some of its el
raise its price as hi as ~ossib~e.
~enerator6 2 is said to have a c ~ ~ i r e d
~ i i I ~ ~m~ t w
e d~ o~w e r~. ~

Transfer L

i = 1~

~ 0 / ~line ~


~ l ~ ~ s ~ r aoft im
o n~ kpower
~ t caused by congestion

~ i g ~2.3e ~ l l u s ~ a t e s iflerent ~ongestion pricing ~ ~ t h o d o l o

c l a $ s ~ ~ ~ a t iPriva~~sation
s is ~ ~ n e (e.g.
n t diffe
coordination betwe
Europe and different states in
e$sential to alleviate congest
co~gestiofl~ ~ c i n ~ .
calculated as dual
~ u l t i p ~ ~from
e r s optimal po
ons. These we based
~ ~ c iIn~places
g . where nodal pricing is adopte~,differences in nodal prices c m ~ e s uin
arket ~ a ~ ~ c i ~can
a n hedge
congestion contracts which are also
and give their holders
~ a ~ s m i s s ~system,

[9, Z 51.

Q e r ~ g ~ l ~oft Electric
i o ~ Utilities

a h a ~ f ~ h o u basis.
r ~ y Many customers will pay for electric power based on this price^ e~ther
irectly ~l~rough
their distribu~~on
utility or t ~ o ~ ag private
power supp~y
e Pool price. The IS0 can also operate markers for a n c ~ l t a ~
wer, spinning/non-spinning reserve and losses. The roles of the

2.6. I

~ and i

n Section 2.5.2 ~ifferentkinds of auction ~ e c h a n i ~ r were

n s discussed. T
uty to set the e l e c ~ c i ~price.
y Pricing is done essentially in eith
ex ante or ex post. An ex ante market is one in which the price o f the CO
is set prior to its del~verywhile an ex posl marke~is one in which the
n the
e d time o f delivery. In an electricity market, a
c o m I ~ i o d iis~d e ~ e ~ ~ at
is like a b~~ateral
market in which ~aders/pa~ic~pants
agree on the a ~ ~ o ~ ~
electricity to be delivered at a certain time in the future at a certain price
Nord Pool combines ex ante and ex post pricing. In its spot market, syst
prices are set up the day prior to delivery. Any differcnce in the forecast wi
delivery results in a discrepancy with the pre-set price and the spot price. This is
c o ~ p e n s a ~ cby
d the presence of the ex post mechaiiism. In the ord Pool, there is a
buy~ackmarket to make up for this difference. ~imilarly,genera~orbids are also s u ~ i ~ i ~ e d
on a o ~ ~ ~ ~ a y basis
- a lin~the
~ ~
and Wales Pool, and participants are paid at the
end of each day for their transactions plus CoInpensation. The England and ~ a ~ Pool
e s is
the~eforealso an ex ante market with an ex post mechan~sm.Ex post markets also exist and
examples are the New Zealand and Australia markets. In the New Zealand e l e c ~ r ~ ~ i ~
mar~et,ge~eratorsand loads are aflowed to change their bids until 2 hours prior to d e l i v e ~
and the market is cleared re larly d u r i ~ gthe bidding process. Ex post prices are c a ~ c ~ ~ a t e
using arke et-c~ea~ng software with the latest offershids and the actual r n e ~ demand
~ r ~ ~
of ex a m and t?x post p r ~ c i nfor
together with losses. Figure 2.5 illustrates the ~n~eraction
e i e c ~ r i cmarkets.

~ ~ ~ all particip ts Rave to bear a certain degr

As in any other c o m r n Q market,
rket. The $ys~emo~erator o has a share o f the risk
rep an^^ of the forecast wi
chal demand. The degree
IS0 depends on the pricing ~ ~ c h a n i sof
m the market. For ex sate
s of market p a ~ ~ c ~ ~ina ~
n ti s~ a tceo ~n ~~alc ~depe
stem price in the future. In a ~
~ m ab~ k elike
~~ ~
ior to delivery, and any real-time power imbalan
xhibiEs the ex post m ~ c ~ a n i ~ i ~
is therefore much more susc
y financial comrni
e a serious issue w h ~ nc~ngestionis comm

Power System ~

~ and
c ~ e~ r en~ ~ gl a t i o ~





actual demand


final clearing price

e.g. Nord Pool, E & W Pool

~ ~ r e ~of Electric
l ~ ~ Ui ~ iol i t~i ~ s

tier prov~ders~
play an
nine years after the e s t a b ~ ~ s ~of~ Be n ~
c o n s ~ e r rather
than be c B ~ t u
11c o ~ s u ~ eshould
have access

is a type of b i l ~ t e r ~ l

eregulation of Electric Utilities

to meet forecast demand. It is a ma

By 10.00 am. every


+ 0 . 0 2 and
~ ~ ~

.7(a) The network; (b) unconstrained dispatch; (c) constrained d i s p a t ~(Source: [151)

h is shown in Figure 2.7b

Wh (~igure2.8a). A that
~ ~
e ex ante price the day
tice during real-time opera

costs of u
~ and constrained
~ e nare
t ~listed in Table 2.1.

Deregulation of Electric UtiIities


(a) SMP; (b) G1 cost function and adjustment; (c) G2 cost function and adjustment
(Source: 1151)

Me 2.1 Gmerator payments and demand charges (Source: [IS])

Demand Payments
Demand Charges (PSP) (Eh)


Total Charge (E/h)





G e n ~ r a t i nCosts
~ (Light-shaded Areas) (Eh)



Generating Payments from Pool (Ou~ut*PFF)(E/h)



Adjustments (Dark-shaded Areas) (E/h)



Total Payment (Sum of Generating Payments and

Adjustments) (f/h)




has been a significant drop in electricity prices in ~nglandand Wales

this price drop does not hlly emulate the cost reduction of g
are not passed on to customers entirely but are partially r
es in the form of higher profit. Also, there has not yet been a
decrease of price in the retail market. A possible reason for the i n e f ~ c ~
wholesale market is that the three largest generators could game and m ~ ~ p u l a the
w h o l ~ s amarket.
The market lacks small IPPs which could potentially f ~ v o ~
u o~~ p e t i t i o n
and reduce the market power of the large generators.
In view of the existing problems of the pool, the director of the Office of Gas and
~ l e ~ ~Markets
i c i (~ ~ f published
~ ~ mthe~NETA [$I, for England and Wales in 1898. The
reforms should commence in 2001 and should lead to significant chang~sin the exis
market. First of all, a d ~ ~ ~ ~ m iauction
n a t owill
~ replace the uniform auction. Sec
d e ~ ~ a n d - sbid
i ~ edin^ is allowed so the market will transform into a bila~eralrn
reform are designe~in such a way that pa~icipan~s
can choose over a i f f e ~ ways
e ~ ~ they
ate in the market. In a different time frame before actual delivery ~ a ~ c i p a can
choose to trade in the following markets:

Forwards markets: these are optional and are operated by i n d e ~ ~ d e on tr ~ ~ i s a ~ ~ 5 ~

sign~ bilateral
contracts that are up to sev~ralyears ahead as desired.
P a ~ i ccan
i ~
S h o ~ - t bilateral
market: this is optional and open from 24 to 4 h ~ u r sahead of the
period, All trades will be organised by a market operator (MO).
s is also optional and it is open 4 hours ahead to
he SO obtains full control of the system after the close
market. 4t would engage in trades to ensure that generation and d ~ ~ a nared balan~cd,
into a c c o ~and
t resolving any constraints on the ~ansmiss~on
al-time power ~
~ charges~are imposed
on ~p a ~ c~ i whose
p ~ ~~ c o ~ ~ ea c ~ e d
~ o u nist different from the actual metered amount and they could be based on the costs
0 to settle the imbalances. The r ~ f o feature
~ $ full dem
bids and simple offers and bids, and they aim to
higher flexibility over different ways of tradin , Neve~he~ess,
eptical about the proposed r e f ~ and
~ sbelieve
this is not the solu~ion
to get rid of market power and reduce prices [20,21], Moreover, there i s concern^ under the
sed reforms, over the possibilities of exploitation of generators market power in the
ing r n a r ~ ethrough
the incremen~and d ~ c r e ~ ebids.
n t Inerement bids r e p r ~ s e the
p a ~ i c i p ~wish
t s to be paid for an increase in output or are willin
increase in demand. ecrement bids represent the prices they are willing to pay for a
d e c ~ e in
~ output
s ~ or wish to be paid for a decrease in demand.

eration e o m ~ e n c in
e ~Norway two years a&er the pass
d from the former C
optional pool was sufficient because o f the la~gen
Norwegian power system ha
ission n e ~ o r k which
tatnett, which is also
ket. The ~ o ~ e spot
g market,
i ~ the Nord Pool or Elspot, is
icipants are free to trade in the bilateral contract
power is in ~ a l ~for
c eg e n e ~ ~ o rlarge
s , custo~ers
land and Wales Pool, the Nord 001 utilises ex ante pricing to set the
or to delivery and compens s power i m b a l ~ c e susing ex post
generator offers and
ahead of actual delivery, the Nord Pool acc
our of the following day. The system pric
emand curve meets the ag
price auction by paying all generators the last
en bidding areas d ~ r i n gthis process,
reas. In the s u ~ area,
~ ~thes area price is
by an amount equal to the line capac
y the right shifting o f its supply curve

Deregulation of Electric Utilities

price in the su lus area is set up in such a way that it should

demand which has a quantity equal to the capacity of the c o n s ~ ~ ~ ~ e
hand, in the deficit area, the area pkce is set
encouraged to supply an ~dditionalamount equal to the capa
p a ~ i c i ~ a incur
n ~ s an ad itional cost and this charge is called the '
is the dif~erenceb e ~ e e nthe system price and the area price. (A
iilus~atethis m e c h a n ~below)
on is broadcast to pool participants by 2.00 p.m. on th
power imbal~ncesare compe~sa~ed
in a separate
rators can submit buyback bids after the d a ~ - ~ e amd
is ~ ~ i s ~These
~ e dbids
. reveal how much a generator is willing to pay to buy
surplus power and how much a g e n e r ~ ~costs
o r to produce the deficit a ~ o u n t .
system operator selects the cheapest a v a i ~ a ~generators
to buy or sell in case Q
and c ~ ~ g e s ~ ~i o~na g e m e nand
t , all in-merit generators are paid the price set by the
h i ~ ~ ecost
s t block. S ~ ~ ~ e misedone
n t ~ s ~ ~ ainl W
l yOweeks.

~ ~ Q I t ~e ~
Q ~~the
s ~, area

situation. This is reflected in the area prices. Also, because of the physical flow of 10

Power System ~ e s ~ c and

~ i ~i ei r ~~ ~ ~ a t i o

Area 1

Sumlus Area












(a) Unconstrained Dispatch; (b) Constrained Dispatch (Source: [ 151)




61, Ll: surplus area

G2, L2: deficit area







.I0 (a) System Price; (b) Surplus Area Price; (c) Deficit Area Price (Source: 1151)

Various Prices and Settlement

Capacity Fee in Surplus Area, C,
Capacity Fce in Deficit Area, C,

= P, -Pi = 0.72 f M h

Settlement Price

P, = 6.52 E/IMwh

Charge Credited to Ll and G2 (Mc)

ebited to C1 and L2 (Md)

= PLl*C,

Net Income o f Grid Company

= Capacity * (Ph - PI) = 337 E h

= PI, - P, = 2.65 f/&W?h

+ PG,*Cd = 73.32 51%

= PGI*Cs+ PLZ*C,= 410.32 E

The ~ o ~ e g i energy
markets have been a successful example of energy ~ e r e g u ~ a ~ i o n .
ket power has not been an issue, ~ e v e ~ h ~ lthe
e s management
of power im~a~ances
arouse^ concerns since it costs the SO money to resolve bo~Ienecksin the regulating
market. ~ o ~ n a it~has
$ ~only
y contributed to a sniall amount of S tmett operating ~ u d g e t
SO f a [I
cong~stion~ ~ a g e ~will
e nbet costly when con~est~on
becomes more
er, the selection of ~egulatingbids using merit order, which is easily
c o m ~ ~ ~ ~ ~ by
n s participants,
does not necessarily result in the lowest cost to alleviate

Deregulation of Electric Utilities




The ~ n e r g yPolicy Act PACT) of 1992 clarified the d e t e ~ n a t i o nof the USA for a
com~etitiveenergy market. It is not m a n d a t o ~to implement a wholeale c
energy market in the nation. Individual states pursuit difl'erent policies an
ending on their electricity prices. States with relatively high
California, New York, Massachusetts, etc., arc more aggressive in
implemcnting reforms. In 1998, California embarked on a four-year transitional period of
~ t r a n d ecosts
~ have com~licatedderegulation in California. The state gov
solved this problem by issuing bonds to inflicted companies to compensate for thei
Customers' bills include a small amount of charge (e.g. 4 cents~Wh),the so-calk
competi~ion~ a n s f e charge
(CTC), to account for stranded costs.
During this transitional period, participation in the pool is optional, ap
large private utilities, which have to trade through the PX until March 2002. One ~itinct
d i ~ ~ r e n cb ee ~ e e nthe Californian Pool and the England and Wales Pool i s that in the
former case market clearing and bids matching are under a separate entity, the PX, rather
than embedded in the duties of the ISQ, as in the England and W
C a ~ ~ ~ o r ntwo
i a , types of bilateral contracts exist: Contract for
Access Contracts. The fact that CFDs are tied to pool prices has 1
game the market using their market power, The idea of Direct Access Contrac~sis to
c o ~ t e ~ athis
c t problem: Direct Access Contracts are not bonded to the PX and pa~icipan~s
only have to request their transactions through the ISd).

ge (CalPX) is responsible for holding auctions for the

competitive forward markets (day-ahead and day of markets). Th,e day-ahead market is
similar to its c o u n t c ~ ain~ Norway and England. Market pa~icipan~s
provide hourly
supply/demand bids to CalPX one day prior to physical delivery. MCP is actually the
equivalent of system rice in Norway or system marginal price in England and Wales.
~ n ~ ~ pricing
o r m is adopted and all pa~icipantare paid or debited the
market provides pa~icipantswith the chance to make up for system imbalances by ~ o l d ~ g
auctions at various times during the delivery day.
Zonal pr~cingis cm~loyedfor congestion ~ ~ a g e m e nMarkcl
p ~ c ~ ~ acan
n tsubmit
the so-called schedule a d j u s ~ e n ids (SABs) which are similar in nature to the r e ~ l a ~ ~ g
bids in the Nord Pool, The S
represents the desire of the ~ a ~ i c i ~to
a nadjust
price varies. When there i s congestion, the region is ~ ~ v i d einto
d zones
ates the zonal prices using SABs. The PX uses this i n f o ~ a t i o nto work
out the final prices for participants so that upon settlement the PX remains revenue n e u ~ a l

stage in California and it is premature to c
o on the ~
various markets. However, there is concern over the
operation of the spinning and non-spinning reserve markets. ~ e n e r a ~ ohave
r s to reserve a
c e ~ a i na m o ~ n tof their c a p ~ c in
i ~order to bid in the reserve ~ a r k e t s ,They are not


Power System ~ e s t ~ c ~and

i n~g e r e ~ ~ a ~ i

e n c o ~ a ~ to
e ddo SO unless they can make more money in the reserve markets than in the
ecause of that reason, generators submit very high bids to the r e s e ~ e
markets, resulting in n o n ~ c o ~ p e ~ i treserve
i v e prices. ~on~spinning
reserve has a relatively
higher price than spinning reserve because there are insufficient pa~cipantsin the noninning res~rve~ a r k e For
~ . maintenance of system security, the IS0 has
certain amount o f both reserves. Since non~spinnin~
spinnin~reserve, the consequence is a higher price for a 10
r e s ~ is
~ not
e as worthy to the system as spinning reserve is). These exemplify ~ ~ k e t
caused by unapt market rules.

Scotland, u n ~ i ~ e
Since the commencement of energy privatisation in 1989 in the
~ n ~ l a nand
d Wales, has not acquired a competitive and e f ~ c ~ e n t sale m a r ~ ~Also,
for various reasons, Scottish customers have benefited much less than their counte
and Wales, despite the fact that the England and Wales PO
mar~inalgeneration COS& in Scotland, even after
into ac~ountthe
smission losses, interconnector access charges,
r transmission and distribution are regulated using the price-cap c o n ~ o l
which depends on the inflation rate and electricity prices are set based on the pool ~ r i c e in
~nglandand ales with a d j u s ~ e n t made
after ~ i n into
g account the ~iffe~ences
of the
land is chara~te~sed
by a surplus of generation capacity
on c a p a c i ~almost two limes the total maximum demand [2
g e n e r a ~ types
o ~ inch ing dual oil and gas, coal-fired, hydro, pumpe~-storageand nuclear.
The two ~ e n e r a t i o c~o m p ~ i e s , Scottish Power and S c o ~ ~ s~h y ~ o - ~ l have
e c ~ c
~ n t e r c o ~ e c ~grids
e d and Scottish Hydro-Elec~iccan access the grid in Eng~andvia
cottish Powers transmission system. Even ough these two d o ~ i n a ~privatised
~ e ~ e r a t i o~no ~ p a n iremain
e s ~ vertically inte~rat after ~rivatisation,they are re~uiredto
keep separate accounts for separate busine s, i.e. tr~smission,
d i s ~ i ~ u t i oC
n .o ~ p e t i t i obetween
the two companies is made possible t h r o ~ g$econd~
tier suppliers who are autho~isedto supply ~ ~ e c ~toi customers
c i ~
ou~sidetheir supply
ent trading in Scotland. Firstly, the ~ W Q
otential obstacles to e
ondly, the market is loo small to be
ertically integrated.
eneration capacity indicates that there i s
Moreover, the substantial surplus
no need to build new generators in the coming hture. Finally
c ~ o c to ~ ~ ~with
e t e Scottish Power or Scottish ~ y d r o - ~ l e c
etween the two countries. In view of the above,
and ~lectricity~ a r k e ~will
s , focus QXI reforms for the Scottish markets which will remove
the obstacles and be consis~en~
with the NETA [25].

The voluntary wholesale electricity market in New Zealand c o ~ ~ e n c eind 1996, but
before that there had already been limited competition in the supply sector. It is operate^


etplace Company L (M-COLtd) which has recently b

s in the C a l i f o ~ Pool,
i ~ market p ~ c i p a n t sin New
outside the pool through bilateral contracts, provided that the system o p e r a ~ is
r ~ f o ~ e d
of the ~ansactions.
In New ~ e a l a n d~enerationis d o m ~ ~ a t by
e d hydro power, which is located in the
Island. The load c o n ~ e n ~ a t on
e s the North Island which is connected to the ~ o u t h~sland
by an HVDC interconnec~or.Even though the three gove~ment"ownedgeneration
~ o ~ p a n i ~ominate
the wholesale market, the market remains s spa rent t ~ o u g hthe
broa~castof predicted prices and load forecast. Effort was spent only on i n ~ o d ~ ~ ~ i n g
co~petitionin the retail sector between distibutor and the state-owne~generation
c o ~ p a n ybut
, it was soon realised that retail compet~tionalone was not e n o u ~ hto re
elecwicity prices and hence the wholesale market was developed subsequently.
The New Zealand spot market: is an ex post market featuring nodal pricing. Nodal
on the theory of spot pricing [26].Under nodal pricing, if the arke et is
s h o ~ - t eprice
~ signals so generated should enhance the efficient
. ~owever,there have been ongoing discusions on effe~tive
opera~ionof the m
als and the management o f the losses and ~ o n s ~ a i n ~
.Expost pricing in the physical spot market is acco
using the latest supply and demand bids and the actual measured plus losses
actual demand is vital and it is one of the main roles of
onciliadon Agreement. Final prices are published a few
actual dispatch.

and debate, The Council for the European ~ n i o neven

Afler years o f negot~a~on
adopted Directive 96/92/EC in ~ e c e m ~ e1996
r to liberalise the e l e c ~ i c ~ tin8
According to the ~~rective,
members of the EU are required to open their
y the year 2006 at least one-third of the EU-wide energy market will h
rent European countries can liberalise their markets at their own pace, as long
nts set by the directive are met, Apart from i n ~ o d u competition
in the
wholesale and retail sectors, the directive also features U
. ~ o u n ~ ate sthe
forefront of liberalisation include Spain and the Netherlands
the existing one in England and Wales, will be developed
hourly supply and demand bids, while in the N e t h e r l ~ d sthe Elec
m ~ d a t e sa complete l ~ ~ e ~ ~ l i s aoft ithe
o n generation section by the year 2 0 ~ However,
~ .
there are also coun~ies,like France, Italy and Belgium, which keep their l~be~alisation
ess to the minimum level requ~redby the direc~ivebecause o f domes~icpoIi~ica~
e ~ a n opened
its market to all suppliers and end users. As it is n
ely few natural resources, two-thirds of the energy con~umedis
imported from other countries, Effort in deregulation is therefore focused on the
~8intenanceof security of supply. Under the Energy Law A~endmentnet owners are
required to provide o en access to facilitate competition. However, only 8 few out of about
700 net users have so far published the charges for using their networks [29]. At present,
nmst net owners also operate the grid; t~ereforethe issue of se~arationof owne~sh~p

Power System R e s ~ c t u ~ xand

ig ~ere~lation

opera~ionwould need to be looked into, Also, practically small custo~er$have not bcen
able to change their suppliers easily under the current legislation.
The ~ e ~ project
a n group on the energy market is ~ r a ~ an poten~~al
project sketch
and it is likely that
concept for the pote~~tia~
energy ark et will be similar to the
EX [30] (European Energy Exchange). It is envisaged &at the d ~ v ~ l o p ~ofe n t
ill be done step by step. The first step will be the ~ e v ~ l o p ~of
e natfutures
market where bilateral contracts can be traded ahead of time. Then a spot market will be
founded for physical and short-term power trading. efore reaching that step, Gemany has
to work on the i n ~ a s ~ and
~ ~r er~ e~ a t i o nfor
s fast and rel~ab~e
w ~ e e l ~which
essential for efficient ~ ~ i ofnthegspot market.

Energy Information Administration,~ t t p : / / ~ . e i a . d o e . g o v / e m e u l ~ e ~ e l e c ~ c i .

BTM consult Aps, hnp://www.btm.dWArticle~~ed-globaf/Eed-glo~al.h~.
Stefmo Zamagni, Microeconomic Theory: An Introduction, Basil Blackwell, Oxford, 1987,
John Bernard, Robert Ethier, Timothy Mount, William Schulze, Ray D, Zimmerman, Beqiang
Gan, Carlos Murillo-Sachez, Rober J. Thornas and Richard Scbuler, Markets for electric
power: Experimental results for alternative auction institutions, availablc via
h ~ t p : / / ~ ~ . p s e r c . w i s c . e d ~ i n d e x ~ u b l i c a t i Proceedings
o n s . ~ ~ l , of the Hawaii ~n~ernation~l
Conjerenceon Sysfern Sciences, January 1997.
John Bernard, Timothy Mount, William Schulze, Ray D. Zimmennan, Robert J, Thoinas and
chard Schuler, Alternative auction institutions for purchasing electric power, available via
Frank A. Wolak, and R. H. Patrick, The impact of market rules and market structure on the
price determination process in the England and Wales electricity market, selected paper
presented at the POWER Conference, March 1997, University of California, Berkeley,
Berkeley, California, February 1997.
Tim Mount, Market power and price volatility in restructured ~~~e~ for electricity,
available via hnp://~.pserc.wisc.edulindex.gublications.html, November 1998.
NETA, New Electricity Trading Arrangements for England and Wales, are based on proposals
published by OFFER, Office of Electricity Regulation, July 1998, available via
lielix F. Wu, Coordinatedmultilateral trades for electric power networks, 12th Power Systems
Conference, Dresden, August 1996.
K.L. Lo and Z.Q. MO,Methods for determining wheeling rates, submitted to the special issue
o f International Journal of @stem Science on the Beslnicttmring of the Electric Power Industry,
lgnacio 3. Perez-Arriaga, Hugh Rudnick and Walter 0.StadIin, 'international power system
transmission open access experience, IEEE Transactions on Power Systems, Vol. 10, No.1,
February 1995.
Young-Moon Park, Jong-Bae Park, Jung-Uk Lim and Jong-Ryul Won, An analytical a ~ ~ r o a c ~
for transmis5ion costs allocation in transmission system, IEEE Transactions on Power
Systems, Vol. 13, No.4, November 1998.

Deregulation of Electric ~ t i ~ i t i e s


[13] J.W. Marangon Lima, M.V.F. Pereira and J.L.R Pereira, An integrated f r ~ e w o r kfor cost





a~locationin a mu~~-owned
transmission system, IEEE Transuct~onson Power ~ s ~ e m s ,
V01.10, No.2, May 1995.
J.W. ~ a r a n g o nLima and E.J. de Oliveira, The long-term impact o f transmission pricing,
IEEE ~ ~ n s a c t j o nons Power Systems, Vol. 13, No.4, November 1998.
K. Lo, Y.S. h e n and L.A. Snider, Congestion management in d e r e ~ l a ~ eelectricity
Conference on Power Utility ~ ~ r e ~ ~ a
markets, Proceedings of the I~~erna~ionul
~ e s t ~ c ~ u rand
~ nPower
T e c ~ n o l o ~ 2000,
i e ~ City Universiw, London, IEEE, April 2000,
Michael D, Cadwalader, Scott M. Rarvey, William W. Hogan and Susan L. Pope,
congestion relief across multiple regions, Harvard Energy Policy Papers,
available via ~ . k s g . h a r v a r d , ~ d ~ p e o ~ ~ e / w h o g a i ~October,
~ d e x . h1999.
R.S. Fang and A, . David, Qptimal dispatch under transmission ~ontrac~s,
T r a n s a ~ ~ ~ oon
n sPO
Systems, Vol.14, No.2, May 1999.
sco Galiana, Lester Fink, Power Systems R e s t ~ ~ E~i ~~~ i~n e~e rnand
i r~~ ~:
r Academic Publishers, 1998.
ie and Ivar Wan~ensteen,The energy market in Norway and Sweden:

Energy Institute, September 1999, available via

[22] The Nordic Power Exchange, The spot market, available via
[23] For derails and examples refer to, Zonal clearing market prices: A tutorial*, available via
[24] $ c o ~ i has
~ d 10,000 MW generation capacity against maxim^ demand of around 5,750
data taken from Review of Scottish trading arrangements: A c ~ n ~ u l ~ adtoi cou~~~e n ~The
Office of Gas Electricity Markets, October 1999, availabIe via
[ZS] Details of future proposals can be found in the latest documents publishe~by O f g e via
~ its
web site: h ~ ~
: l t ~ .uM,
t261 Fred C. Schweppe, Mchael C. Caraminis, Richard D. Tablors and Roger E. Bohn, Spot
Pricing o ~ ~ l e cKluwer
t ~ ~Academic
i ~ ~ ~ b l i ~ h e r1988.
associated with a discussion of the losses and
c o n s ~ ~ isurplus9
Marketplace Company Limited, July 1999, available via

[2S] Greenpeac~,G e ~ ~ a n *y ,S ~ r o ~inaDeutschland:

r ~
Vom Monopol zum ell', ~ o v e ~ b ~ r
1898, a v a ~ ~ ~via
b I h~://
[29] ~ n ~ o ~ a tobtained
i o n in the Strombijrsensection at: h ~ t ~ : / / ~ . s t r o m . d e .

Un~versityCollege Dublin

Prof. Chen~ChingLiu
Universi~of ~ashingtQn
Seattle, USA

~ l e markets
c throughout
~ ~ ~the world
~ ~are undergoing major chan es 111. These changes
are varied in their nature but h e uiiderly~gtrend is towards a more CO
and this results in electricity being traded as a c o m ~ o d ~ ~
e markets to facilitate this trade. Political forces [a33 are driving these
changes. A compe~~tive
electricity market is one in wh
are c o m ~ e ~ i ntog sell their e l e c t r ~ cto~a~ number
(loads). Here we are concerned with c o ~ ~ e ~ i tin
i oanwholesale electricity ~ a r ~where
e t
the c~istomersare lap consumers or a retailer who will resell the e l e c ~ i to
c ~th~
A l t ~ o ~ electric
energy can be stored in batteries it w
tities and hence ~ l e c t ~ is
c ia~ r ~ a l - t i ~corn
The electrici~demand
d also has a significant random
Id in an ~ ~ ~~ ~c ris~energy,
~ ec t iTh ~
active ~ o w e rand au~omaticgen~ratorcontrQ~
Er that the electricity system can
need to be ~ r o v ~ d eand
d an e$ec~icitym
of t ~ e s eservices [ 6 ] . The g ~ e r a t o ~
ically and K ~ c ~ olaws
f ~ s
system. The consequence o
ystem and altering the s u ~ (g~~ierator
~ l ~ ou~uts)
iates this c ~ ~ ~ ~ e s[7].
y, a n ~ ~ lservices
l a ~ and

Competetive Wholesale Electricity arke et


with the real-time stochastic nature o f the electricity deman makes des~gningan
arket a great challenge.
s in a wholesale electrici~market will be connected to the highsystem as opposed to the Iow-voltage distribution system. This
~ansmissionsystem an sports the electricity. In some markets single entities
generati~gunits, transmission systems and supply the customers directly. These
are ~o~
as vertically integrated utilities (VIUs) and can be monopolies. Where
opol~esexist or where a ~ o ~ i n market
a n ~ position is held in one part of the ~ n d u s t r ~ ,
c ~ i ~ agenera~ion,
au~oritiesare implementing new market s ~ c ~ r toe es n c o u r a ~ ~
[2,3]. It is ~ i f o accepted
~ ~ y that the transrnissi~n sys
n ~ o ~ o p oand
l y in this new environmen~it should be regulated to ensure
open market [9]. Here it is assumed that all other aspects of the w
market are competitiv~,a
it is recognised that many who
tive. For example, in Norway
redefined limit are compensate
limit are not [no]. Co~sumerdemand is largely inelastic but demandc o ~ p e ~ ~ t~i av ~
e k ei st tse c ~ i c a l l yfeasible and is becoming more CO
In a monopo~istic ~ameworka re lated VIU makes pl
isions based on a least cost objective, subject to constraints (
~ ~ ic ~l ~ ti e~~
r 1~ ~a ~ 1This
3 1 . p ~ a ~and
i ~operationa~
f scheduling algorithms, each one s
roblem over a distinct time frame.
ch ~~gorithms
which achieve a real-ti
and demand in a least cost manner. More advanced economic
e consider the optimal
the optimal ~ o w e rflow
c o n ~ ~ a i n~ncluaing
e limits, voltage levels,
e frames unit commitment (UC)

s which are limited by these type

replaced by ~robabilisticmodels [IS]. Ln this

ns are made. This planning and o ~ ~ r a t i o n
e time for delivery approaches, the sc~edulesand ~ ~ s ~ aare
to current circu~stan~es.

Power System ~

~ and ~

these markets result in cost m~nimisationin the short tern but their CO
aspect should in the long Tun serve to reduce these costs even further. In the c o m ~ e ~ i t ~ v e
market situation ~hereorea set of markets need to be developed that mimic the VIU least
cost objective, subject to opera~io~al
and re~iabi~~ty
constrain~s.In p ~ i c u l
are being replaced by markets for energy, transmission and
Just as with scheduliiig algorithms these markets have di
The real-time or ba~ancingmarkets are run very frequ~ntlyto main~hn~alance~ e ~ e e n
supply and demand and to ensure system security and are similar to economic d~spatchand
OPF al~orithms.In many markets there may be a need to run day-ahead ~ a r k e t that
s will
be like the unit ~ o ~ i t m eprocess
[22]. L ~ n g - c~a ep a~c i ~markets may also be a
feature hn some systems where or reliability reasons generators are compensa~edfor
keeping available capacity 1231.
~ o m p e t i t ~ velectricity
inarket design is a highly complex exercise
not only by economic and engineering considerations but also by histo
social cons~aints.Many of the current designs have ~ecQgnisabIe
ibutcd to both technical and non-tec~icali ~ ~ u e n c e s .
to be assessed with these factors in mind. Lessons can be
generally every market has particular c i r c u m s ~ c e swh
ity market designs in di~erentcircums~ncescan be e q ~ i a ~e ~f yf ~ ~ ~ i v
ired result, an efficient and reliable electricity supply. Different rna
~ i r c ~ s ~may
c e also
roduce the same desired results. There i s no
i ~ ~ k de
~ t
olution to the complex problem o f e l e c ~ c m
ators will agree that competitive e ~ e c t r i cmarkets
i ~ ~ will resat1
society there are some very s i ~ i ~diferenc~s
c ~ t of op~nionon some
issues, These differe~cesof opinion can be d o ~ ~ ain~nature
i c and s
to cloud the issues. Each regiodcountry should choose a design tha
ition but suits their particufar social, e c o ~ o and
~ ~political
re a broad o ~ e ~ i eofw wholesale elecbi
on of the independent system operator in
which describes wholesale e~ectricitymarket charact~r~st~cs
follows in ~ e c ~ i o n
incl~deauctions, b i d d ~ nprici~ig,
ential markets, congestion man
ary services, physical and ~ n a n c ~m
s are given to illustrate these cha
ty markets Section 3.4 describes
le e ~ e c ~ imarkets
c i ~ are still an active area o f rese
the challenge^ in the design and opera~ionof these
A c ~ o ~ ~ ~ d are
g eInmSection
e ~ ~ 3.6 and a CO
S e c ~ i 3.7.

C o ~ ~ ~ t e~~hi vo el e Electricity
s ~ ~ Markets


As more and more regions/countries open up their electricity markets to competit~on,the

~uestionof how to des~gnthe market in the best interests of the consumers and s u p p ~ i is
of prime importance. Central to this are the energy, transmissio and ancillary services
markets and how they are coordinated. The competitive market
demand ~ n c ~ ~ effect~vely
in many markets, e.g. stock market
delivery of a product is required by a stock market whereas in an electricity market a
p r o ~ u must
c ~ e v e n ~ a ~be
l y de~iveredins~ntly(i.e. no storage) and its
ower system. The closer we get to physical delivery th
the operational and reliability constraints. These basic principles are
n many ~ ~ c ~ i o nmarkets
i n g and it is universally accepted that e
system opcrator (ISO). Although an accepted pri
market structures require a large role for the
the IS0 is a hotly debated topic. S
w h ~ others
roach. This operator
disc rim in at^^ to all
e market hence the
operator. In general
responsible for tasks such
g of load for all users and e n s u ~ n gcom
standards. The IS0 will o ~ ~ r the
, open access to the transmission grid to all users
gestion and constraints on a n e ~ b o ~ ~
system reliability the IS0 should also
hancements, The I S 0 may also pro
led basis and perform the s e # ~ e ~ e ~ t
of aspects that need ~ ~ a g i n ranging
c o ~ e c ~ i o~no l i c ~ econ~est~on
management and the a ~ i n i s t r a t i o nof ene
n po~iciesare an ~ m p o ~ a naspect
of the ESO res~onsibili~~es.
and charges that all participants must meet in order to connect to the grid and
in the marke~.The trans~ssionsystem is made up of a
e n e r a ~ r sand cons~mersare located, and these buses are
lines. These lines transport the electrical energy around the hi
t r a n s ~ ~ s ssystem
i o ~ and have limited capacities, which for security
[26], When a line is at its limit the system is congested
er inj~ctionsat every node in the system. Relieving th
generator^ andfor consumers to alter their quantities. ~ ~ e f o congestion
r e
puts a
c o ~ s ~ r aon
i ~the
t e n e r markets
and in many instances may render them non-compe~itiv~
[27]. Losses on an e l e ~ ~ i grid
c i ~are u n a v o i ~ b l eand can be substantial. A market
nts p~ysicallocation on the transmission system, i.e.
portan ant factor in wholesale electricity markets. Th
~ d ~ e n of~ establishing
a ~ s
the instantaneous Iocati
of electricity. For e x a ~ p i e a, generator that is injecting p o w ~ r
location at one i n s ~ nin
t time can cause substa~tiaIlydifferent losses and c o n ~ e ~ tthan
i o ~a
similar i n j e c t ~ oat~another
location andlor time. The cost of these loss
s y ~ t ne ~e to~be~~ l ~ o c ain
t esome
manner to the

Power System ~ e s ~ c and

~ ~ n g

electricity market and this is not a trivial task [29]. The revenues collecte~by the TSO
from the ~enera~or
and loads for these ~ansmiss~on
s e ~ ~ c e(co~ection,

ay for the ~ a n s ~ i s s i o ny s t e ~in tbe short an

In the VHU environ~entthe least cost objective ~ p ~ c a rl e~~ye ~ ~e idi l yto the cost of
a n 6 i l l a ~services such as r ~ s e and
~ e vol~dge~ o n t r owere
~ ~ e a t as
opt ~ ~ is atioprocess
and their cost may not have been e x p l i ~ i ~ ~ y
illary services is costly, and the ~ u a ~ ~ ~of ~ ~ ~
reserv~are services that generat~ngunits provide
they have significant costs associated wit11 them D23. ~ ~ ~ will~ a
not provide these services unless they are ade~uatelycompensa~ed[33]. In s o ~ cases,
howev~r,g ~ n ~ r a ~ may
o r be obliged to provide these services in order to be all~wedto
arket. Ancillary services can be self-~~ovided
by the e ~ ~ r g y
nsible for a ~ q u the
~ ~ n ce.
~ ~ h y s i c a ~selfly
~ r o ~ i s i af
Q nthese s
ient and ener~y~~k~~
these services from others. Therefore in c o ~ p e t i t whole

a state where load shed

and reserve that must
rocess, then the ex

~ncentiveto ~ a i n t a units
i ~ [41]. A strong ar
fines are not n ~ ~ e s sasa pure
~ , market forces
in the competitive enviro
the event of a shortfall in gen

In a ~ ~ o ~ eelectricity
s a l ~ market ~ u l t i ~ l e
being traded over
d ~ $ ian~e li e~~ ~ r i ~ i ~
number of choices
a t ebasic c ~ a r a c ~ e ~ s t i c s
s ~ s model
~ e ~is used to i ~ ~ u s ~ the

ity markets are used here to illus

refe~encesto existing wholesale ele
eneral these exist in^ m
characteriti~s but it should be no
which do not allow them to be c
lso be noted that even at the time of this writing rn
re a v a ~ ~ a bthel ~ relevant web sites are giv
r sh


~ r nTest
~ ~~ yl s ~ e r n
test system c o n s ~ s ~ ~ofnag supply si
d a simple ~ ~ e e - bnetwork.

~ i n i ~ uand
mr n a x ~ gen

tors have quadratic production cost

con~aintsgiven by

are the power outputs in MW of generator #1 and

ic utility curves and

n i m ~ mand max~mum

Power System ~ e ~ t ~ a ~d ~ i n g

Line A


Line AC


The coef~cientsof P, and Pzare the line sen~~~ivities

of the respectiv~lines to inj~ctionsat
buses r~spectively[27].

us A

Line A

s ~central
s ~ auction
istinct ~ a d ~ ~n g~ c h a n ithe
iers and ~ustomersboth s u b ~ i t
the market clears, i.e. d e t e ~ i n ~
m [46]. In their simplest forms these centralised auctions
to a im~le
merit order economic ~ s p ~ a~l gc oh~ i [12].
~ h ~ The
d auction for
auction m e c ~ a n i s ~ ~

Competetive Wholesale Electricity Markets



idding into a simple central auction i s similar to the process of each generator submi~i
cost data and each load submi~ingutility ( ~ l l i ~ ~ e s s - t o - pdata
a y )to the
used by the VIU to dispatch the system. In an ideal world with a
electricity market the bid data should be the same as the ~roductioncost (utility) data or
o p p o ~ n i t ycost, wRicRever is eater. The o p p o ~ n cost
i ~ is the r~venue
p ~ i c i p would
expect to get by selling in a different market. This price
assu~ptionin a competitiv~market is an optimal strategy for a market particip
n the
The p ~ c i nmechan~sm
i an important factor in this p r i c e - ~ i n ga s s ~ ~ p t i oand
to the seminal paper by Vickrey [49]. The fixed costs are not
d ~ u a n ~ i t yi.e., clearing the market. The incrementa1 costs
are all that are needed to clear the market. Here it will be assumed
no opportunity costs and that all market p ~ i c i p a n t sbid at ~ c r e m ~cost
case where bids vary from incremental cost (utility) is dealt with later in the section on
~ S e ~ t i o3.3.9).
The cost (uti~ity)curves and the increme~talcos
small test system are given in ~ ~ ~3.2r and
e 3.3
s respective~y. T
(utility) curves result in linear increnienta~cost (utility) curves.




Power (MW)

Cost ( ~ t i lcurves
i ~ ~ for the small test system









3 I ~ ~ r e ~ e icost
i ~ a(utility)
curves for the small test system

C o ~ ~ e t e ~Wholesale
Electricity Markets

Profits for the ~ e n ~ r aare

~ ~c ar ~s c u ~by
a ~t ea ~~ i the
n ~di~erencebetween the r e ~ e n ~ ~
e cost. The cost in t h ~ calcu~ations
is taken to be the
i~noreother fixed costs such as eapit
ce ~ e ~ e the
e nutility
p r ~ c~i~~c h~ a n i sisi npay as you bid w h ~ pra~~ i c i ~ a pn ~ s
is prQ~osedthat this type of d i s c r ~ ~ i n a ~ opricing

ts (3.11, (3.2), (3.3) and (3.4) and (be load balanc~c o ~ s ~ a ~

roce~ (a ~ ~ a d r a ~p ir co g ~ a ~ i n g
ils of solution) the no-load and fixed
et in h i s m ~ n e with~ut
~ ~ c r e a s ~[ndg~ c r e a s ~ ~ g ~ ,

Power System R ~ s ~ c and

~ ~n e rge ~ l a t i Q n

constraint (3.9) and the assumption of a lossless system, the pool (central auction) is
revenue neutral, i.e. what is paid in by the loads is paid out to the ~enerators,
le 3.1 Market clearing, transmission uncQns~ained
G e n ~ ~ ~ Q r / Quantity
~ Q a ~ (MW)
Generator #I
409. I
Load #\
Load #2


Price (

~ Profit
) ( S u ~ l ~($A)

21 10.3
437 1.9

~ a rTiming
~ ~ t

to the stochas~icnature of the demand [ and the need to s c h e d ~ e~ e ~ e r a t i o n

resources in advance, electricity markets can
characterised by timing. Forward
s are run in advance of the delivery time. This enables suppliers to
e~erationto meet the demand and for the IS0 to coo~dinate~ a n s r n i ~ s and
ervice needs. The forward markets also perform a very important financial
ants by locking in prices an
ractice [SZ]. In power
I-time (spot) markets and is
systems with large themal plants that are in
unit constraints these
1. There may be a m u ~ t i ~ of
d ef o ~ ~ ~a r kd e at
ahead, month ahead and day ahead. In C a l i f o ~ i athe power
(PX) m s three different types of forward markets [53,54]. The day-ahead
lishes prices and quantity of electricity for delivery d
~ each
~ how
n of ~the
. The day-of~our-aheadmarket o erates similar to the day
ding closer to the delivery hour.
pa~icipantscan buy and sell energy months in ad
order of min~tesin
ance of delivery are deeme
a ~ p r o ~ ~ real-time
markets are needed to ensure supply and
adapt to unforesee~c~rcumstances.These real-time markets are in
d Norway the respecti~elSOs operate
market for real-time a d ~ u s ~ [55,
e n ~101. The p
r e a ~ -basis
~ i ~but~ this is set to change with the ~ t r o d u c ~ i oofn a binding day-a~ead~ a r ~ e t

The core product being soid in electricity markets is energy. U l t i ~ a ~ e the

l y coordi~&ti~n
of units (sc~eduling)and of the ~ransmissionand a n c i 1 1 services
enables its
e l e c ~ c market
structure is one in which the energy t ~ a ~ ~ d
ndently of the transmission and ancillary services. The provision of the
e ~ e r g y~ a d in~ an ~
tlal trans~issionand ancillary services needs follows
sequentia~~ ~ a n n eIn
r . ~ a l ~ f oforward
~ i a energy ~ a r k e t are
s con
real-tinre energy, congestion management and ancillary services
a l i f o ~ ~[58].
i a There i s a strong physicai coup1

Compete~iveWholesale Electricity

s e ~ i c e and
s congest~onmanagement and this is reflec~ed some markets where
cbre is one in which
ded s ~ ~ u l t a n ~ o u sAl ys~muItaneo~s
electricity market
a n ~ ~ u s lwith
y the transmission and ~ c i l l a r ys
ania, New Jersey, Maryland, USA) ~ n t e ~ c o ~ e [60]
this simultaneous c ~ a r a c ~ e ~ t i cThe
. i ~ t ~ ~ r n
r pool is to use a hybri se~uent~a~simul~aneous
arket structure in Alberta may also be a h y b ~ $as the
the energy market and the ancillary services markets as
eously [56]. In the uncons ined m a r k e t - c ~ e ~ n g
the ~ a n s ~ i s s i line
o n power ws are given in Table
le 3.2 Power flow, market clearing, transmission ~ n c o n s ~ ~ n e d

Line AC (PAc)
Line BC (PBc)



The line c ~ n ~ e cbus

t iA~to~ bus C is overloaded by 137.5 M
with this ~ o n g e s ~ is
o nto clear the ~nergyand transmission mar
h the e x a ~ that
~ ~ will
~ e be given here will deal with
~imulta~eouslyit c
to deal with energy
smission constraints in the
ed line. This can be a c ~ ~ e v e d
social welfare (3.8) subject to unit const~aints(3.1), (3.2), (3.3) a
ons strain^ (3.9) and the transmission ~ons~raint
(3.5), (3.6) and
hic that illus~atesthis arke et-clea~ng m e c h a n i s ~ ~
c o n s ~ a ~ nen~rced
Table 3.3 gives the ~uant~ties,
prices and p
the power flows.
Market clearing with transmission constraints

Generator #2
h a d #I
Load #2




Power flow, market clearing with ~ransmissio~


Line flows (MW)

Line limits &IW)


Line AC (PAJ



structuring and Deregulation

ce the ~ n ~ o d u ~ tof
i othe
~ o t i c that
e in Table 3.3 the price at each bus is differe
price at each bus is the
term locationa~marginal pricing or nodal
1 cost of the next ~ ~ g a w aoft t po
I is active then typically the price at each bus
ipants at different buses receive (pay) a d~f~erent
price and this is
the ~ c r e ~ e n tcost
a l i s different at d~fferentlocat~~ns,
the appropriate price signals regard in^ their location. ~ e n e ~ t o r
#l is poorly located in co~parisQnwith generator #2 as it is

~ e ~ thee ~oe buses.

ain as the revenue for the generators will be les

and New ~ e a l ~ ~

can r e a ~ a n gthe
~ result of the ener

~ o m ~ e t e t i Wholesale
Electricity Markers

~ q ~ a n and
t i ~price) ar
is trading ap~roachhas the
ut the cheapest generators.
ot c ~ e n t l y~ e ~ i in~ e d
must be traded through the cen
is set to change in Engl
may be net inject~onswhich may c
n management process these
If these transacti
m have been changed as
se bilateral trade
transmission c o ~ $ ~ a i nfor
t s the central auction:
Line A

ine A


arket clearing with transmission constraints and bilateral ~ ~ ~ s a ~ ~ ~ o

~ e n e ~ a#It o ~
~ e n ~ r a tfc2
Load #I
Load #2




Power System Restructuring and

Table 3.6 Power flow, market clearing with transmission constraints and
Line AB (P&)
Line AG (PAJ

Line Rows (MW)


Line limits (MW)


The bilateral trades have altered the central market result. In order for
be allowed they need to pay for the tranm~ss~on
service. The ~ ~ s ~ i s
b i l ~ t e ~W1
a l is the product of the q u ~(10t MW)
~ ~by the i n c r e m ~ ncost
~ l of ~rans~ission
between bus A and bus C ((23.3-13.9) $
i.e. 94 $/h. The ~ ~ s m i s i charge
product of the quantity
ntal cost of ~ansmision
d bus G ((2~.3-20.2)$ / ~ i.W ~ ~ ~
ilatera~trades re in a
that relieved congestion the price diff~rential~
would be negativ
~ ~ ~ s m i s s charge
i o n would be negativ~,i.e. the bilateral trade would be re
estion the bilateral trades can be ~Qnductedindep
stem becomes c ~ n g e s ~ ethen
d there
to pay the ~ a n s ~ i s s ~
o n these ilatera~~ a d e have
been eEe
central auction. This concept is r e c o ~ n i s ~indNorway where zonal
ement ~ u ~ o bilateral
trades b e ~ e e nzones
c e ~ ~auc~ion
[20J P
ith locarional (nodal
is mandatory partic

able to match the p a ~ [67].

e ~ It is
ng schedul~from a central a~iction

Competetive Wholesale Els&icity Mmkets

scheme in the ~ a l i f o ~Pi a [54]. It is interesting to note that this iterative bid~ingscheme
proposed for California proved impractical and has not been
In the VIU envi~onmentgenerators were typically
This UC a ~ g o ~uses
ts and accounts for the inter
r a m ~ ~ nrates
g [l5]. In so
need to be ~ n t e ~ a l i s eind the bids of the p a ~ i c i p ~16
the prices in advance [69] and bid so that the
pro~table. This self-schedu~~ng
approach is in existence in the ~ a ~ i f o r n ~ ~
and Norway [70]. Bilateral trades are by their nature self-s
security reasons, self-scheduling may be subject to approval by the IS0 "711.
a central auction process can also involve a firm that owns mui~pleunits
submitting portfolio bids. These bids represent an aggregate offer. Afier market clearing
the firm can then decide how it will schedule its own units to supply the q u ~ t i t i e s ,The
CalPX allows portfolio bids.
An alternative to self-scheduljng is centralised scheduling where a UC-type algorit
i this auction m e c h ~ i s mis very
is used to clear the market [41]. ~ i d d i n gi n f o ~ a t i o iin
~ e t ~ ~ ~n ~~ e~ ~all
u 9dcost
~ gdata and a p p r Q ~ ~ atechnical
cons~aints.In the
clearing examples above the optimisation problem variables were
which are
of social
con~inuo~s.In a centrally scheduled system the objective is th
welfare, subject to ~onstraiiits9
but the variables are both continuous (quan~ities~
discrete (turn a generator on or off) [72]. In PJM some units can choos
scheduled while others with bilateral contracts can self-schedule. In the
e n e r market
i s a centrally optimised UC process but this is set to change

In perfectly competitive electricity markets the most profitable swate

p ~ i c i p a n tis to act as a price taker and bid at incremental cost [48].
a s s ~ p t i o nassumes an infinite number of competitors so the bidding beh
player cannot affect the markets, i.e. influence prices. In the real world, however, there are
only a finite number of market participants and each participant has to some degre
to increase their own profits. There is a mu
power, i.e. they can bid s~a~egically
possibilities for this type of gaming behaviour in ellectricity markets [73,74]. De
bids from ~ncremen~al
cost can also occur because a p ~ i c i p a n wants
to en
schedule [66] or it knows it has another opportunity in anorher market
incremental opportunity cost.
As an example consider generator #I in the constrained market above.
i n c r e m e ~cost
~ ~~ e n e r a ~#oIr is making a loss (Table 3.3). In this: case ge
alter its bidding strategy so as to avoid this loss. Table 3.7 gives the result for one strategy
wbere gen~ratQr
#I ~ncrease~
the linear part of its bid (3.1) from 12 ~
~ to W
14 h

Power System R e s t ~ ~ and

~ n g


atkec clearing with ~ansmissionconstrain~and ~ e n ~ s a tktoltbidding

strategically, i.e. the linear coefficient is changed from 12 $ Mto 14
Generator R
Load #1
Goad #2

Quantity (MW)
48 1.3

Price ($/NIwh)


Profit (Surplus) ($/h)


erator # I by a~tenngits bid away from ~ n c r e m e ncost

~ l has tu
le 3.3) into a profit of 25.2 $/h (Table 3.7). ~enerator## 2
incre~ingits profits from 2871.1 $k(Table 3.3) to 3075.1 $k(Tab 3.7). Load# 1 and
2 have both also gained as their surpluses have increased. y b ~ d d ~above
g its
ntal cost generator # 1 has increased its price and reduced s quantiw and most
are a balance betureen ~ c r e a s price
~ g and reduc
q~antity, ~ i t inelastic
e is more scope for driving up prices w~thoutexcessi
ads can also bid strategically. The price differenti
bus B: has reduc~d(T
7) and hence the loser in this g
revenue from the c ~ ~ g e s t i o n
ment has reduced from 23 15
ties and these exist in
here pa~icipan~s
are in collusion 176,733. Cen
the market power. ~ o w ~ v e tr r, ~ ~ ~ i s s i o n
mall pockets with very few ~ ~ i c i In
p this
~ ~ .
s with little market power ~ l o b a ~cl y
ransmission systems that are prone to
tive electricity market difficult. S
their nature [26] pose s i ~ i l adiffic
ed that must run for r e ~ ~ a b i lreas
R) generators are ~ o ~ p e n s a t outsi
market results [8OJ.
In the example above it should be noted that the strategy of g~nerator# I is not op~imal.
i n ~ re~u~es
ptirnal s ~ a ~ e g ican
e s be found, however [S1,821. Successful ~ a ~behaviour
ts to have good information about other p a ~ i c ~ pbi~ ~ and
s to consider the
n a ~ r of
e the p r o b ~ [83].
and g a ~ i n gbehaviour act to reduce social we~fare. Table 3.8 below
the social welfare for some of the ex
sion c o n s ~ a ~and
t s all ~ a ~ c i p ~ t s
social welf~reis a ~ a x i m u m .With the ~ a n s m ~
lace of cheaper power and the social we1
are bi~dingaway from ~ n c r e ~ e n tcost
a l ( ~ t i l i then
~ ) the social we~fareis her r~duced,

Wholesale Electricity Markets

Social welfare



Social welfare ($h)

No t ~ ~ s ~ i s sconstra~nts
tab^^ 3.1)
~ r a n s ~ i s s ~constraints
(Table 3.3)
Gaming and transmission constraints (Table 3.7)



A n c ~ i Services

s e ~ i c e sare required for the reliable operation of the power sys

s ~ n ~dre d~ n i ~ of
~ othese
n services is not globally accepted. AGC, resesve (s
s t a ~ d b yload
~ , fo~~owing,
v o ~ ~ control
and b ~ a c ~ - sct aa~p a ~w~ oi u~ be
ised services. The generat5rs
ically provide these ~ n c ~ l ~ a
can also provide some. New
these s e ~ i c e are
s not
term contract. Some of
~ ~ k eInt ~. J AGC
~ is, se
~ the IS8 operates a
they are L ~ w i orl ~ ~ ~then
acquired by cons~aining
e process of a c q u ~ this
energy and ~ansmis~on
congestion manageme~tmarkets.
Consider the simple test system. Assume that the IS
spi~iingreserve is required for system r e l i a b ~ and
advance by acquiring it in a ~ o ~ amarket,
r d e.g. day ahead. Spinning reserve is the a~~~~~
of an on-line erator tor (bad) to increase (decrease) its output (c
period of time. The time per~odwill be d e t e ~ ~ by
e dthe s y s t e ~ t for smaller s y s ~ e ~ s
the time period is nemlly smaller in order to avoid large ~ e ~ u ~eviati5ns
e ~ ~ c[38,86].
Assume that gesler r # 1 and generator #- 2 can ramp up by 25% and 50% respectively of
acihes in the s ~ ~ ~reserve
i n gtime period. It is also ass
loads are ~ncapableof p r o v i d ~
~ ~ reserve. Therefore the ~

1I- 0 . 5 ~ ~ 0-0P2)2 200

Table 3.


the r e s ~ of
~ ~clear
the market with the above constraint (3.13)
m~ssionc o ~ s ~ a i n t s

Power System ~ e s ~ c ~and

~ ~i ne rg e ~ I a ~ ~

Market clearing, reserve constraint, transmission un~ons~ained


G e n e ~ a ~ o r ~ oQuantity
Generator #1
3 16.9
Generator #2
Load #I
Load #2


Price ($/MWh)

Profit (Surplus) ($h)







The first thing to notice about Table 3.9 is tkdt in comparison with Table 3.1 the
quantities have altered substantially. In order to meet the reserve c o n s ~ a i n(3.13)
g e n ~ a t o#2
r has had its quantity reduced and loa
is largely unchanged and load #2 is unchanged. Although generator
reduc~ionin quantity it i s more profitable than the unc~nstrainedcas
reason for this is that the price has increased. Although generator #2
cannot complain about its profits. The biggest gainer out o f this si
whose profits have more than tripled. This high1
with ~ e c ~ i cparameters,
i.e. generator # 1 has
It should be noted that if both generator #I and #2 had the ability to ramp up to m a x ~ ~ u m
output within the s p ~ n i n greserve time period then the market would clear at the same
price and q ~ ~ ~asi int Table
3.1, i.e. the reserve constraint (3.13) will not be ~ ~ n d i n g .
Here the binding reserve constraint has caused the social welfare to reduce to 11095 $/h
from 11511 $/h in the ~ c ~ n s ~ i case
n e (Table
3.8). It shou~dalso be noted that in the
event o f this reserve being used then generators # I and #2 woufd be paid the real-ti~e
price for their energy. This scenario, where both g e n ~ r ~are
t o bettcr
off because o f the
~ c ~services,
~ l i sanot~always the case and eref fore if a constraint causes a red~ctionin
profits a p ~ i c i p a n tshould be compensated for its o p p o ~ n cost
i ~ [60]. The ~ y b r ~ d
approach in the New England Pool requires the ca~culationof this o p p o ~ cost
n ~ for
An alte~ativeapproach for the provision of ancillary services is to set up m ~ ~ k e t In
s. a
competitive e n v i r o ~ e n the
t bid curves for reserve and other ancillary services should
reflect a pa~cipantsexpected o p p o cost.
~ ~ Expected
o p ~ o ~ ~ ncost
i t ywill require
f o ~ e c ~ s tofthe
i ~ g energy spot price [69]. In C a l i f o ~ i the
a ancillary services markets fo
in sequence after the energy and congestion management markets. In this way capaci
progressive~ya s s i ~ e dto the various tasks 1551. In New Zealand the ~eservem ~ k e is
cleared simul~neouslywith the energy and transmission markets. With ~ a n s ~ i s s i oand
reserve constrai~tsthere may be a need to account for the interact~Qn
between the two, i.e.
in the event that reserve is needed it will require ~ a ~ s m ~ s s[87].


ieal and Finan~ialMarkets

~ a r k e can
~ be physical or financial. If the markeE is physical then the quantities are to be
physic~llydelivered in contrast to a financial arke et where no p ~ ~ s i c da le ~ i v eis~
reqMired. In advance of physical d e l i v e ~the IS may well receive i n f o ~ a t i o nthat is
of the physical deliveries. However, at some point in time the I
~ n f ~ of~ the
e dbin~ingphysical c o m m i ~ e n t sso it can c o o r ~ i ~ athe

C o ~ ~ e t eWholesale
t ~ ~ e Electricity Markets

security and reIiabi1~~.Deviations from these binding c o ~ i ~ are

e n ~
with by buying or selli the differences at the real-time price. In C a l i f o ~
submit binding schedu and any imba~ancesare adjusted in the real-time m ~ k e that
t is
operated by the CAISO.
ecause of price volatility many ~articipantsin a central auction rocess may wish to
acquire financial contracts which hedge their position. In Alberta
effectively hedged against the pool price. Alberta currently has only
and this has been possible because of the large-scale hedging w
p a ~ i c i ~fiom
~ t sprice volatility, This situation is set to change wi
being introduced in the near future 1561.
teral trading is one m e c h ~ i that
s ~ can be used to hedge the vola~lityin a central
a load that are participating in a central auction can ~iavea
a price P,,. If the pool market has a uniform price of P, then
and the load pays the same amount. his can be ach~eved
at zero price and the load requesting MW and i n d ~ c ~ t ~ g
he market price P, is higher than
oad. If the market price P,, is lower than the
P, - P,) to the generator. The net effect is
W at a price P,,. The two
that thc ~eneratorand load h
of the uniform price. The s
bil~teralc o ~ ~ aare
c t perfectly
hedge is known as a Contract for Difference (CFD).
~ o w e v e r ,this hedging mechanism is u n d e ~ i n e din a system that
congested and has a ~ocationalcongestion ~ a n a g c m e nsystem.
are at the same bus then the hedge is still perfect. If, however, the I
different buses they will have to pay for transferring Q MW from the gen
~ be revenue depending on the price d~fferenti
load bus. This p ~ y n i e ncould
and the generator split this payment (revenue) between them is their own business. There
involved: the IS0 which collects the charges for co~ges~ion
~ a ~ i o nprices
a ~ can be very variable and ~ e n c ethe price of
ly voIatile. A solution to this difficulty is the conc
~ r a ~ s ~ i s srights
ion ~
~ where
T pa~icipants
) can in advance ~ ~ r c h a fr
right to collect the ~ a ~ s ~ i s scharge
i o n for Q MW between two buses [63].
load and generator are again hedged. If these transmission rights are compe~~tively
then their price should reflect the expected price ~~fferential
b ~ ~ e the
e n load an
generator buses. The IS0 must also ensure that these ~ a n s m ~ s s ~rights
o n are feasible9i.e.
its t r a n s ~ i s s i ocongestion
income in the physical market covers the p
these rights. Trans~issionrights may also be subject to gaming behav~our
of ~ u l t i p l etrading o p p o ~ n i t i e (bilateral,
spot market, forwar
to optimise their portfcdios
the wholesale electricity market ~ a ~ i c i ~ win
a n ~endeavour

From the el~ctr~city

arke et characte~sticsdec~~bed
above it is eviden~that there is a
esign choices for electrici
lco r n o ~and
~ l the ~ i ~ a t e r a l
sion and ~ ~ c i ls~e ~ai rc e~s

pool and bilateral aspects with

rates all ~ h y s markets

~ ~ a ~ forward

and cost ( u t ~ inform

i ~ ~ ~

p a ~ c i p a n self-schedule.
This model oflers all the ~ e n ~of~ co~prehensive
in the cen
c ~ ~ i coif sthis
~ type of
ically not ~ i q u and
e the
is very sensitive to algorith~p ~ a ~ e t e which
could lead
consequence of the i~tegern
dificulty the prices are set by
lex algorithm whic

oach should m i ~ i ~ i any


~ l e ~markets
~ c are
i ~highly complex systems that consist of a number of ~ t ~ e l a t e d
m ~ k e t sfor different commodities (energy, ~ansmissionand a n c i ~ services)
different time frames (real-time, hour ahead and day ahead). There are still man
lems in the design and operation of e l e c ~ ~ i tmar~ets.
when the pure economic theory is applied to a power syst
e economists want the electricity markets to embrace the laws
d with simply ideal examples they can show the benefits af such a
. The real-time nature, physical constraints and reliability issue all
act to make the development of an ideal market impossible. It should be noted that it is
well accepted that all markets, even those for simple c o ~ o d i t i eare
~ , not ideal. T h e ~ e f o r ~
the goal should be to develop a market that is a bestfit to the ideal.
Several wholesale electricity markets have been established around the world and most
of these are in a con~nuousprocess of change. This evolut
by the need to address some of the outstanding issues in the
these markets. Here some of these challenges are outlined.


~ a rPower
~ ~Evulualion
and ~itig~lion

e t
valuation of market models can have many differe~tv i e ~ o i n ~ sThe
. ~ a r ~ must
dmction in a reliable, efgcient and fair manner. The generators will want to maximise
their profits t ~ o u g hthe markets. The consume^ will seek the best value for the service
they receive which may conflict with the aims of the generators [SS]. This will ne~essitate
analysin~the social benefit that the market offers and the prices that are charged. It will
also be dent to ensure that market power and gaming do not exist and that m ~ k e t are
not overly volatile.
on there are some a v a i l a b ~simuiat~on
and a ~ a l ~tools.
simulation model that considers the market s ~ c t u r and
e estimates
and ~uantities.Kumar and SheblB [93] have dev~lopedan auctio~
s et al. @ I ] have developed a framework to in
market simulator.
when all p ~ c i p a n t are
s maximising their own
and ~ e w b [94]
e ~investigated the UK market using the supply curve
T h ~ is~ little
e doubt that market power is bei exercised regularly in many electricity
rices, which are well above co~petitive
m ~ r k [95,96~.
~ ~ s This practice is characterised
~ y profitable for the ge~eratorand ult~matelycostly for
levels, The result is ~ i c a l very
s power can be exercised in many ways. aerators with global market
power can manipulate the marginal (spot) price as in the gland and Wales p o ~ e pool
[96]. ~ransmissioncongest~~n
can give p ~ i c i p a n t slocal market power and they can
~ a n i ~the
~ Iocational
~ ~ t e marginal prices 1971. Some possible solutions to this problem
i n c ~ u dthe
~ following [76]:

Competelive Wholesale Electricity Markets


Better market design. Some markets have experienced difficulties, which could be
resolved by better design [24]. The congestion management process in California has a
gaming problem and the Federal Energy Regulatory Commission (FEW) appears to be
encouraging the adoption of locational marginal pricing as a solution [3,64].
reaking up the large generating companies into smaller co~petitiveWI
oliticd issue, which may not fully solve the problem. In the
perceived that the two dominant generation companies exercised their market power to
raise prices above competit~velevels [96].
~ u ~ more
~ ~~ansmission
n g
so as to avoid creating o p ~ o ~ n i t i efor
s local m a r ~ e t
power. Over-building transmission may seem wasteful but with this ~ a n s r n ~ s ~ ~ o n
capacity in place local market power can be removed and generators may act more
e ~ ~ v e [8].
l y This additional ~ansmissionwill also increase the r e l i a b i ~ oi ~f the
system. There is, however, significant environmental concerns related to b ~ ~ d i more
n here the load is
Making the load more responsive to price. In the examples
responsive (3.3); however, this masks the reality where in mo
markets the load i s largely inelastic. Any generator hoping to
find that a responsive load will reduce its quantity and reduce
. For domestic customers this may be very difficult to i
e customers may be capable of ~ n s t a ~ ~equipment
that can respond to the m a r ~ e t
In the long run new technologies may make distributed generation (e.g. fuel cells) more
prevalent and this will reduce the need for further investment in transmission [%I. It
will also combat market power, in particular, if this type of generation is owned by
groups of consumers (i.e. if the market price is too high they will generate themselves).
If this does happen then the electricity market will become part o f a larger energy
In some markets if the price rises above certain levels the prices are capped; however,
this distorts the price s a1 and may have long-term negative consequences~ Price
capping has been used at one time or another in most wholesale electricity markets. For
e x ~ ~ ~theI California
ancillary services markets have had price caps i m p ~ ~ [79].


~ y s t Capacity

The issue of p l a ~ i n gin generation and transmission must be a d ~ e s s e dwith a view to

ma~ntenanceand enhancemen~sto meet increasing demand. On the generation side these
functions are generally left to the market, the assumption being that energy prices will
signal the best times to maintain units and when to build new plant. The energy price
spikes in the Mid West (USA) in June 1998 highlight this issue. A market for generating
capacity over a fonger time frame (more than one year) may provide the necessary market
signals h ensure that the system will expand according to the needs of the c o ~ s u m ~1233.
The concept of marginal cost pricing [99,100] for electricity is based on ~ndamental
microeconomic principles [50]. In an ideal market bidding at ~ n c r e m e ncost
~ is an
optima^ strategy [48]. However, the resulting schedule may be unprofi~ablebecause of
costs such as no-load costs, startup costs and fixed costs (Table 3.3). In the VRJ
environment with spot pricing Schweppe et al. (281 introduced the concept of revenue
where ~ a r g i n apricing
may not be sufficient to cover all costs and give a

Power System R e ~ ~ ~and

~ Dere
r i n ~

reasonab~eprofit. ln competitive markets revenue reconciliation shou~dbe redun

that m ~ ~cost~ pricing
a l will in the long i-un resolve this issue. In the lon
not suf~cientto cover
business. However, this i
in the ~ n g l a arid
~ d Wales power pool ere are
c a p a ~ pi ~
p ~ i c i p a n t sreceive in addition to the market spot
~ a l i f o no
~ ~such
st in the energy market but there is
ctures would appear to fail in
in new trans~ission [8,102].
This may be a p r ~ a ~ r e
i n v e s ~ e is
n ~a long-term issue [30 d the markets have only been recently
i n t r ~ ~ u c e dAlso
. it could be argued that the tran
sion system was over-bu~ltin the past
and the excess capacity is only being utilised rec
, In addition environmenta~c o n c e ~ s
are also a factor in the lack of investment in the tran~issionsys
i n v e s ~ e n in
t transmission does not keep pace with the increasing de
there will be ~ o n g - t eeconomic
and reliability problems. The
when transmiss~oncapacity is needed the market &I
ction delays etc. this could lead to periods of u ~ e l ~ a b i ~and



W h ~ it~ is
e desirabIe to encourage co~npetitionin the e l e c ~ i c arke
i ~ et to reduce the costs
e quality for consumers,
also v ~ ~ ai~ml yp o ~ tot ~ a i n ~the
. In an operational envir ent, an important re~~ability
~ e a u r eis
em security refers to
systems a b i l i ~to w ~ ~ h l is~ et l y~ ~
A system is said to be in a secure state if it is able to meet the Load d
c y ~ as a line or
without viol at^^ the erating constraints in case of a like c o n ~ n ~ e n such
with re spec^ to a set of next
In other words, s e c u is
~ defin
g ~ ~ e r aot uo ~ g e11
ies that are likely to occur. Gatas hic failures of power
c ~ c a d e devents that are co~binati
n a ~ r acl a l a ~ ~ t i(e.
q ~ i ~ m e ~n at l ~ n c t ~ odesign
n s , flaws andor h ~ a en~ o r s[
security assessment is to reduce the likelihood of catastrophic failures.
uch effort in the past decades has been devoted to the develop~entof c
for s y s t e ~ e ~ ~ r i assessment.
These tools include state estima~ion,
select~on contingency evaluation, external network equivalents and 10
ustry evolves into a competitive environ~ent,system securi
~ n c t i o n .In this new env~ronmen~,
the p~~~ responsible
or a similar entity. Since the e n v i r o n ~ ~isnm~
ical challenges. For example, the level of unce
as increased s i ~ i ~ c ~ tThis
l y .is due to the fact that
~ e n e r a ~ patterns
and the market outcome may not be easily p r e ~ ~ c ~ ~Cbo lne~.e q u e ~ ~al y ,
s y s ~ eng~neer
at the IS0 who studies system security may find it d ~ ~ ~to upredict
l t the
eneration and load conditions for evaluation of system security.
defined fo
city market
ity Gouncil
nes ATG as

Competetive Wholesale Electricity

the Total Transfer Capability (TTC), less the Transmission ~eliabil~ty

Margin ( T ~ less
~ ,
the sum of e ~ i s ~~ansmission
c o ~ ~ t m e n(which
includes retail customer s e ~ ~ can
11061. Note that ATC is d e ~ n e dfor a ~ c t ~ t ~ o u
presents the amount of power that can be Van
ng the ~ a n s ~ i s s i osystem
contraints~such as line flow limits.
ing condit~onof a power system; the syste
de thermal, voltage and stability limits.
the effect o f various unce~intiesin system condi~ionson ATC,
smission ~ a n s f e rcapability reserved by load-serving entities to ensure ~ h e i ~
erations from interco~ectionsto meet the system r e l ~ a b irequirernents.
e x a ~ p of
~ ethe
d e t e ~ i n a ~ based
~ o n on power flow c ~ ~ ~ ~ l can
in Bergen and Vittal [
To determine the ATC for a path from X to Y, one can ~nject
an a ~ o ~ofn power
at node X and remove the same amount of power at Y and calculate
the i n j e c t e ~ r ~ ~ o amount
v e d i s increased to a level that c
the power flows.
h its capacity, the amount can no longer be increase
wer ~ a n s ~ise rthe TTG. hen a iven line cont~ngencyis ~ a ~ in
flows of the post-continge~cy operating conditions also nee
transmission line conskaints. ~onsequeiit~y~
the ATC may not be as high
the ~oiitingencyconditio~i s not considered. The s ~ e a d y - s ~power
flow m e t h o ~can be
exte~dedto include s y s t e ~d y n a ~ ~ cTime
s ~ domain simulatio~scan
various levels of power ~ a n s f eto
r evaluate system stability including vo
s y ~ c h r o n i so~f the ~eneratorrotors. When dynamic security is considered in ad~itionto
the steady-state operating cons~aints~
the resu~t~ng
ATC may further be
the availability of ancillary services such EIS reactive power sources can

e aware of the ~im~~ation

of the path-based ATC concept [ 1081. The
existence of the multiple transactions is a reality in the market environment. When the
ATC of a path from X to Y is being evaluated, one needs to consider other t r a n s a c ~ ~ that
have to be ~ccommodated. For the power flow method, other transactio
wer inject^^ into and removed from other areas of the system. These
taken into ~ccountsimul~~eously
when the ATC for path X to U i
le kansact~on~ a ~will
e lead
~ to
s differen~values of
illustrates the concept of multi-dimension
ower transfers over tie lines 1 , 2 and 3 re
projection of the thr~e~~imensional
region on the P,,-P, plane resern
describe the secure power transfer
point inside the ~~ree-dimens~ona~
ot violate the security conska~nts. The projec~ionon other
similar manner. Now suppose the power
1 P,, is at the value of P,,,, the maxi
eases to the value o f PTIZ,
Waisfer level for P,, increases to Pn2. NQWit is not difEcult to see th
p o ~ e~r a n s ~level
e r P,, increases fro^ the zero level. To s u ~ a r i s ethe
parameters of the operating con
the other ~EIn~~ctions.
, represented by a tie line in F
on the levds of other
ented by other tie lines.

Power System R


Illustration ofa power system security region

~ andc

Wholesale Electricity Markets



~ e g ~ d l e of
s s wholesale electricity markets power system p l a ~ i n gand opera~~on
many technical challenges. With the advent of wholesale electricity markets new and
d~fferenttechnical challenges may arise which need to be addressed. The comp~~ationa~
aspects of the electricity markets are one obvious area of interest [l09]. There are also
interesting technical challenges related to the management of a large number of
transactions [I 101. The OPF algorithm which i s at the heart of the marginal cost pricing
paradigm [ZS] and of power system security analysis will have to meet ever-~cr~asing
challenges [ 1 1 17.
In the m ~ ~ m a l iIS0
s t model with ~elf~schedu~ing
the UC a l g o r i t ~is being implicitly
solved in a d i s ~ b u t e dm a ~ e by
r the market particip~ts11121, which may or may not
produce results which are as good as conventional UC algorithms. In the interest of
efficiency these decentralised UC approaches need to be analysed. In the r n ~ ~I S ~0 ~ ~
model a cen~alisedU ~ / ~ ~ F - t yalgorithm
is required [1131, Although s e c ~ t y constrained UC afgori~msexist [ 16,171 a UC algorithm with a full QPF formulation for a
practical-size power system is still a significant computational challenge. The UC
algorithm itself is still a very active research area with many issues unresolved [114,14].
In particular, solutions are invariably suboptimal and not robust [92].
In the short-term, regulators, system operators and market ~ a ~ c i p a nwill
t s have to face
the challenges described above. However, any actions need to allow market forces to push
the indusfxy towards possible long-term competitive solutions.

The authors would like to thank ESB National Grid, UCD President Res~archA w ~ d and
Fu~brightfor their financial support. This work is partially supported by US ~ a t ~ o n a l
Science Foundation through Grant ECS-9612636 with matching funds fiom Alstom ESCA
Corp. The authors would also like to thank Prof. Richard Christie, Universi~of
Washington, and Mr John Kennedy, ES National Grid, for their useful c~mmentsand


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Cliff Walton
London Electricity Group

Robert Frief
London Electricity Group

Dr Loi Lei Lai

City University, London


Transmission and d i s ~ i b ~ ~ are

~ i ostill
n regarded as the natural monopoly elements in the
r e s t ~ c ~ r UK
e d energy market. Since privatisation in 1990 there have been a number of
changes in the structure o f the industry which have impacted on the dis~ibutionbusinesses
and the i ~ ~ t r o d u c of
t ~ othe
~ Utilities Bill heralds a further change in the relationship with
g o v ~ ~ ~ ethen regulatory
body and consumers.
One of the main objectives of privatisatio~was to promote compe~ition. This has
focused on the supply (Le. the retailing) of electricity and gas and has encompassed the
associated aspects of metering.
A c o ~ p e ~ t i framework
was developed for new connections to distri~utionnetworks
defining certain elements as contestable work, but to date this area has not seen the widescale competitive activity expected and the regulator has indicated his in~~ntion
to review
competition in the gas and electricity connection markets by March 2001.
The biggest effects on the distribution businesses have resulted from the price control
mechanism. Distribution businesses in the UK are price regulated, a part of which is to
allow a return on the assets purchased at vesting and the i~vestmen~s
made in the
subsequent years. The latest price review, which came into effect in April 2000, saw the
regulator propose reductions in distribution business income similar to those following the
last review, None of the UK ~ i s ~ ~ b u tcom~anies
have c ~ d i ~ e the
~ ~o~ue~dc ~ of
r nthe
latest review, which implies that the companies believe that they can achieve these savings.
The only st~cturalchange at the time of writing has been the announce~entby London

Distribution in a Deregulated Market

Electricity and Eastern Electricity of a joint venture to operate their n e ~ o r k s with

asset ownership remaining with the parent companies,
Since the latest price control the UK r e ~ ~ a thas
o r i ~ ~ l e m e n t ae dpr
the ~ ~ f o ~ aprav~ded
t i a ~by the regulated di~ibutioncompanies and
incentives to introduce an element of competition. The details of any such scheme are still
to be decided, but it sends a clear signal that after 10 years there remains much scope for
a ~ oand~the electricity distribution industry.
menls in ~ e ~ lpractice

4.2. I

~ o ~ ~ e t iin~ Supply

The development of competition in the energy supply market in the

develop~nentof two distinct activities in the UK public electricity suppl
t y gas
and distribut~on. The supply businesses are responsible for the sale of e ~ e c ~ c iand
whilst the d~stribMtionbusinesses manage the cables, lines, ~ a n s f o ~ eand
r s switchgear
which form the power supply networks between the EHV grid system and the end users.
The development o f competition in supply as part of the process of d
subject in its own right. Certain aspects of the process to deliver a CO
market have had a significant impact on the PESs distribution businesses.
The most visible aspect of this has been the moves both physically and ~ ~ ~ c itoa l ~ y
separate the retail and ~ i s ~ i b u t i obusiness,
and in some cases the sale of retail businesses
to third parties. This process has involved the rebranding of the separate bus~esses. It
was intended that the PES distribution businesses be rebranded and this will
case, although those generators who have acquired retail interests (National
and PowerGen) have essentially rebranded their retail arms (Mid~andsand


The ~ ~ s p 5 n s i b i l ioft ~~~es~ aand

i l ~ist~ibution

retail business bulk

hases both electricity and gas and supplies them to their
custo~ersover the electricity and gas networks. A great deal of work has been required to
the necessary systems to effect a competitive market.
of this ~ a r k e ~ l a the
c e retail businesses have taken responsib~li~
for meter
r e a d ~ gwith
the intent that this service be procured from ~ ~ t e r - r e a d i nservice
on a compe~itivebasis. The development of competition in the mete~ngsector will
even~allysee the pr~visionof meters to suppliers by meter asset ana age^ and opera to^.
The distrib~tioncompanies manage and maintain the electricity d~stributio~
network. This
involves both the technical asset manage~entand planning services and the b ~ ~ofl use
~ g
of system charges from suppliers and the management and maintenance of the existing
meter assets.


Power System Restructuring and

eration services organ~sationin London has been estabiishe

from the n ~ ~ o asset
r k manager, with an a ed scope and level o f s ~ ~b e~ ~ ce een

ive for separation o f businesses is a reui~emento f establishing a ~ o r n p ~ ~ i ~ ~ v

in the supply of energy [I]. In essence the incumben~d i s ~ i b u ~may
the position of the domina~thost supplier to the d e ~ r n e of
~ t custom~r
Five potential means of achieving this have been i d e n t i ~ ~ ~ :
a combined dis~bution
could disadvantage comp
charges to support the suppliers retail tariffs.
s pote~tiallyhas access to i n f o ~ a t i o nthat other ~upp~iers
will not
le, the names o f customers supp~~ed
by a second-tier supplier.
intentions o f a dis~ibutionbusiness. For e x ~ p l e ad
ze and nature of changes to use of system
4. Cross-subsidisa~ionby a d i s ~ r o p o ~ o n aallocation
of costs
overheads to the d i ~ ~ i b u ~business.
A small reallocat~onwill have
i ~ p a in
c ~a retail i n d u s ~that has very small ~ a r g i n s . The regul
this issue in the 1999 price control review by realloc
tion to supply before assessing the relative ef~ciencies
ution business will in some way ~ o ~ g r the
~ service
d e to a custo
s ~ ~ p ~For
~ example,
the response to power o u ~ ~ ~ ~ .

ion businesses ~ e s u l t i nfrom

c ~ m ~ e ~ i t in
i o ns
s e p ~ a t i of
~ nthe two business areas are:

on businesses of the i ~ ~ l e m e n ~oft the

etablished at the time
e in resolving system-b
constraining s u p ~ ~ ~ esales
r s for e ~ b e d d ee~n e r a t ~energy
~ ~ sales.

istribution in a Deregulated Market

It was decided that t ~ e was

r ~

required s e ~ ~ e ~ a t i o n

e a p e r ~ Qs~~a~~v ito
c ei ~ ~ i ~ i cd ~u sat ~o ~ e ~ s .
torner^ er^ still receive the level of service the

i s conkoiled via

on ~alf-hou~ly
c Q ~ s u ~ ~ tdata)
i o n for 1
e s t i ~ a t ~for
s ) smaller (mainly quarterly
st o f a fixed portion or stan

Power System ~



~andc Der~gu~atiQn
~ ~ n ~

C ~ t oService
~ e ~

The ma~iagementof customer relations is another area where competition in supply cre~tes
a number o f options.
In New Zealand, the initial approach routed a11 customer contact throu
businesses. This simplifies the contact issues for the customer,
manage~entof the interface between suppliers and dis~butionb
the correct i n f o ~ a t i o nis available to inform the customer.
the UK, the distribution businesses have kept an interface with c u s t o ~ in
e ~relation
ly outages. Hence customers have two points of contact. ~ l t ~ o this
u gs ~i m ~ ~ i ~ e s
the m ~ a g e m e nof~ information flows on outages between istribution businesses and
suppliers (there is none) the management of the routing of calls to the wro
care. The future solution to some of these issues i s already apparent in
call systems. These are already being installed to provide i n f o ~ a ~ i oonn outages and are
of particular use in the extreme circumstances o f wide-scale power outages when call
centres become overwhelnied.
Internet technology will soon provide accurate supply of i n f o ~ a t i o non outages and
torat~ontimes to both customers and suppliers - the inte~ationof fault reporting
lephone network. It is possibie to generate specific y~ice-ac~~vated
g to postcodes or dialling code i n f ~ ~ a t i o nIt. may even go as f8r as pro
~ f o ~ i a t i o(i.e.
n ring the customer). London ~ l e c ~ hc i ~
d e ~ i c~~ ~e gnpower
outages on its internal web site for so
make this facility available via the Internet once suitable security safeguards h

~ a ~ ~ ~ int Metering
i t i o ~

and 100 kW markets since I991 and 1994

Competit~on has existed in the 1
to own and operate meter assets in both these
respectively. Third parties have bee
areas since 1995. In conjunction with the hi1 c o ~ ~ e t i t i oinn energy
physi~aland financial separation of the dis~ibutionand supply b~sinesses~
competitive metering are being extended to the remainin
market sectors. This has created two distinct business streams, meter rea
asset m ~ a g e m e n (otherwise
known as meter o
provide data retrieval and data processing @R
s will provide meter asset provision and m ~ a g e m e n(t k n o as
dis~ibutionbusinesses no longer have any part in the reading of meters, which is
by the energy retail business via a contractual ~ a n g e m e nwith
a meter reader.
ssion in that meter readers could provide services for r e a ~ ~ nany
This is a n a ~ apro
utility service meter. o n g - t e ~developments are likely to result in meters that are read
The existing meter assets are presently owned by the distribut
energy supplier, via a meter asset man~gement~ompany,can provide
new cu$tomers DT as r lacements for existing meters. In the me
will develop in the p~ov~sion
of meters and the ~anagemento f these assets,

Distribution in a ~ ~ r ~ ~ u

To ensure the availability of these services, the PES energy retail businesses will
ovide a meter-~eadingservice of last resort and the
erat~onsservice of last resort.

d-side ~ ~ n a g e m e n ~
s to reduce the peak demand either
of more efficient usage or by mov elements of the 10
the system load factor.
real alternatives to
rcernent. In general terms these
the ~ansmissionand generation level where the cumulative effec
ema and-side ma~agementhas been encouraged by the use of tariffs, e.
peak tariffs for storage heating. In this i n s ~ c ethe move away
heat~ngto off-peak storage w impact on both generation and &arm
wever, at a distribution ievel the wi
e installed c a p a c i ~require^.
mand occurring at nig
ating has resulted in pe
ated ~ a r ~ the
e t promot~on of energy effi
ess clear. The generation capacity availabl~b
cts exist between energy uppliers or retailers
or respons~blefor bala~cingthe systems
m a ~ ~ system
~ ~ voltage,
n i ~~ e~q u e n and
c ~ security. Large c
ing themselves available for disconnection as
istrative complexities of participating in such
this to a few very large buine$ses.
recourse to modifying use of system tariffs to promote alternati
,the energy u ~ ~ l imay
e r not be obliged to
any reulting ~ n c e n t i ~Addit~onall~
in the
stomer contact and knowledge of their partic
erator to m ~ a g the
e syste
bedded generation to offset the need for r e i n ~ o r c e m ehas
become a major subject of debate. The principal difficulty is that p~omo~ing
and ennsurhg
the ~nta~lation
of suitable generation in advance of the reinforcement ~e~uirement
is far
from a simple task. Not only this but the ~ p p r o p r i acommercial
a ~ a n g e must
~ ~ be
~ in
~ s
place for the risk to be m i n i ~ ~ ~ss~e fd~ c i e nfor
~ l ythe generation to repre~n~
an ~ q u ~ ~ a b l e
~ ~ ~ e ~ to
a tt~aditiona~
Therefore it can be seen that in the marketplace active d e ~ ~ a n d - s ~ ~ e
re~uirea time of
to be sent to c u s t o m e ~via tariff a
lion levels designed to reflect the local
cmt this would be in reducing the need
ive if system security is
allow for the effects of
would require careful risk assessment. Variances between actual
would need to be reflected in v a r ~ a ~ use
l e of system charges in

d. It is not the intent to discuss here whether variable use of system a:

on to ~ u s t o thro
~ ~ r ~
ticable as these woul

t in asset replace~enr,s

~ rein for^

~ i ~ ~ b u tini oa ~n ~ r ~ g u l aMarket


Voltage tolerances, faul

r e ~ a i nas they were before the priv~tisationof th
r changes to h a ~ o n i s ewithin the E ~ o p e a nUnion).
reflect EM1 standards and
This has not been due to the ~ e s ~ c of~the
~ indu
n g
e unwiIlingness of
What has chang~dth~oughr~gulat~on
i s quality o f supply a
number and d ~ r a t i oof~i n ~ e ~ ~ t iand
o n customer
s u ~ ~drivers
l y is discus in the f o ~ l o w
on covers the drivers affecting planning
ncepts of p l a ~ i n gasset r e p l a ~ e ~ e n t



y ~ i s ~ i b u tsystem
i o ~ design muse meet the following r e ~ ~ ~ r e m e n ~ ~ :

e able to supply the system demand whilst meeting the

s~stemsthe n e ~ o r must
~ s also:

ng costs of the network.

mic and risk assessment. Whilst much h

ndard was written in the 1970s, the st

ai~houghit only addresses the scaIe and duration of a loss of supply and not the
ncy of which such incidents can be e~pectedto occur.
rmance, which are beginning to drive network
the s ~ a n dpa~icu~arly
in ~espectof the fre
e d i f ~ c u here
l ~ has been to find a common
ance levels that
from the different e
n. The most recen
er for change has come from
to make the best use of embedded generation connected to the d i s ~ i b u t i onetwor~s
at 132
elow. This generation has not been considered in system security to date. This is
due to:

tion of most gener~tion.
commercial framework.
The ~ i ~ ~ c u Ioft ~~e ss u ~ the
n gpresence of the necessary generation before systems
need ~ e i ~ o r c i n g .

be solved at the time of w ~ t i n g

1 be a ~ ~ e n d with
e d a means of asse

has been measure

A ~ a i l a b i l i ~S :y s t e ~average i n ~ e ~ p t i oduration

r some time by the f o l l ~ w i ~

) or customer minu~es

stem average i n t ~ ~ p t ~ eoqnu e ~ cindex

y ~S~~~~ or its e ~ u ~ v ainl e ~ ~
r 100 connected custo~ers.
These measures represent the average performance of the system and so do not a ~ c u r ~ ~ ~ l
c u s t o ~ e may
e x ~ e ~ e n [2,3].
In the
than I minu~eis cou~tedtowards these statistic
rm to allow for the benefits of system automation.
dica~esthat customers prefer not to be ~ n t e ~ p tbut
~ din, the event of an
d of restorat~onand accurate i n f o ~ a t i o n kely outage times ~ e c o m e
The provision of such i ~ ~ o is ~po a ~ both
~ ~through
call centre

Ristribution in a Deregulated Market


re 4.1 demonstrates the relationship between incidents, ~ t e ~ p t i o and

n s customer
minutes lost. This cl
shows that whilst by far the most inciden~soccw at low vol~age,
) 11 kV and 6.6 kV systems cause by far the most c u s t o ~ e r
the medium-vol~ge
c eere are
siest area in which to improve network e r f o ~ a ~as
dis~ption.It is also
solutio~savailable. It comes as no surprise eref fore that i n v e s ~ e n thas
centred on reducing the impact of MV system incidents and disruption.
The most ~ o u b ~ e s impact
o ~ e on customers is that r~sultingfrom ~ e ~ u eor
n t~ u ~ t i p l e
The p ~ m measures
a ~
discussed above have there for^ recently been
tl measure of multiple interruptions, which will determine the ~ e r c c ~ ~ a ~
rs who experience more than a given number of i n t e ~ p t ~ oper
n s amum,
the second post-pr~vatisationprice control the d i s ~ b u ~ companies
eved by the end of the second review period. During the third review
place in 199842, the e l e c ~ cindustry
regulator decided to set targets for the e l ~ c t ~ c i t y
c o m p ~ i erather
than to allow the co~paniesto set their own. In addition to this a syst
of incentives based around p e r f o ~ a n c eagainst some of these measures is to
i ~ p ~ e ~ e in
n ~ e d [4]. Much discussion remained at the time of writing as to the
e ~ ~ h a stoi sbe
to which measures and therefore it is dif~cultto resolve haw these
measures will further aEect the development o f distribution p l a n n ~ g .The de
networks to meet quality of supply requirements targets the reduction of the i
network failures at two main areas:
The p r e v ~ t of
~ o~ ~n t e ~ ~ t ~ o n ~
The restoration of supplies
has increased the focus an imp
Since deregulation, the U
rent approaches have bee
aspect of c~stomerservi
different companies driven by their particular regional and network pro
s i ~ i ~ c aareas
n t of ~ v e s ~ e have
n t been in insulated or semi4
auto reclosers on overhead lines and network remote control and
Insulated overhead conductors have been used to reduc
~ n t ~ ~ p t i due
o n sto trees tou~hinglines, which can lead to mor
auto reclosers have been in~oduced in conj
intemptions a u ~ a ~ a t i c and
a ~ ~are
y therefore sometimes considered as a form of n e ~ o r k
~ e ~ o secondary
r k
system (i.e. V systems~remote c o n ~ osys~ems
have been
varying degrees by distributors in the UK. The most s ~ ~ n i ~ cinves
~ o n ~ oElec~ic~ty,
E a s t e ~Elec~icityand S o ~ ~ ~~ e c ~~ c i ~ .
much faster res~ora~ion
o f supplies following faults on cable network^ or on
ely distant fiom o ~ ~ r a t i o ncentres.
They also reduce the n
cing the amount of time an engineer needs to spend swi
reducin~the risks associated with this activity. The case study at the end of this section
considers the scheme impIemented by London Electricity, the b e ~ i e ~realised
and the
long-term potent~aiforeseen for the system.
These projects have as part of their implementation s i g n i ~ c a ~ t cl yo n ~ b u ~ etod the
~ e p l a c e ~ or
~ n ut p ~ a d i ~ofg p r o ~ ~ e m a tnetwork
apparatus, be it overhead line or

re, they can o p t i ~ i ~their

e e l e c ~ c a~~licatiQn
cost savin~s~n~~~the
tend to maintai
In a d ~ r e ~ ~c a t ~ dve
~ power m ~ k e t utilities

Power System ~


~ andc ~ ~ ~ n~ l~ a t i o

roposed method for a VSTLF has been s u c c e s s ~ l ~~mp~emented

in a ~ o w e r
utility in the USA, and is used by dispatchers for on-line load forecasting. The developed
f o r e c ~ t i ~system
predicts eight values of load for the time leads from 20 to 90 minutes in
10 ~~u~ increments. To provide dispatchers with the information about e~pectedforecast
e ~ o r s ,mean absolute percentage errors ( ~ ~ E are
s )calculated base
forecasts for which load ~ n f o ~ a ~has
i o nbecome available. For the 20, 30, .,, 40 minute
[9]. Load data is
fore~asts,the mean absolute percentage error lies in a range o f 0.4~~.~%
from the automati~generation control ( A ~ C )system every
g data is converted into lminute integrated loads which are consider~das
COUS) loads. These loads are used as input i n f o ~ a ~ ~
o nc o m ~ u ~load
pre~ictionsand they are also stored for training. e forecaster~sneural nehvo
automatically retrained once a day.
It is not the intent to discuss in detail load forecast~ngand its d i s a g ~ ~ ~ a tto
i oanlevel
where the installed capacity in the distribution n e ~ o r k can
s be es~ab~ished.
The advent of the increased demand for telecoms data and Internet services has also
to add s i ~ i ~ c aloads
n t to the d i s ~ ~ b u t ~systems
f x the associated
ing centres. The m a g n i ~ d eof such loads (10-4.0 ~ W and
) time scales (12-18
months) for such developments are such that the d~stribut~on
com~anyhas to be in a
position to ~espondcreatively and ~exiblyif it is to avoid l o s ~ nthe
either to another company in a di~erentlocation where supply can be a
r to a competitor who is prepared to establish a separate dis
The large urban centres such as London are not see in^ the
m a ~ i demand
~ u ~ due to more efficient loads as these are being offset by these
businesses have adop a five-year p ~ a n ~ horizon,
sed d~s~ibutio1~
culties of predic~ing~ e m ~ d
l a r ~ ~ due
l y to the ~ve-yearlyreview period and the
shuction times related to major s y s t e ~changes, changes in
bstation projects make the ~ ~ e - y e~a re ~ ~o ~d~ a ~short
e tec~ologiesand s ~ c ~ or e networks must be
tail in the ~o~lowing
ieve this end are discussed in In

asset management and planning is to integra~eas

replace men^ of poorly performi or high~riskasset
~ d e ~~ a r ~~ ewill
~gt need
ay an i n ~ ~ ~ a s i n g ~ ~
asset r ~ ~ l a c e p~r ~o ~n rta m ~ with
e s n e ~ o r kreinforcement and major new c o ~ e c t ~ o n s
works. The p l a ~ i n gof asset rep~acementi s discussed later.


int of l o n ~ - t ep~anning
is to d e t e r ~ ~ nhow
e extema~~n~uences,
of new business and changes in the regulatory env
f the network and the levels of i n v e s ~ e nthat
t will


Power y s t e ~R e s ~ ~ and
~ ~n ~gr e g ~ l a ~ i o

In time adopting such a me~hodologyshould Lead to an ~mprovedm a t c ~be

ents and the d e ~ a n they
~ s must
uch t e c ~ ~ q u hav
d in a number of projects worldw
d are ~ i c a l l ystandard ~ r ~ c t ~ c e
ians for ~ n t e ~ a t i o financing
on ~ ~ s c u s s ethe
d use of a set of 10
A similar ~ e c ~using
i q three
~ ~altem
ness ~ l a ~ n i n gThree
views of all
ent and investment drivers are normally eve loped being:

she goes view: a sable environme~tbased on exi

ions encompassing a reasonable view of the effects of known de


s p e ~ ~ c l view:
e s ~ a positive view of the dev~lopmen~
of the economy
how this will impact on the demands on the business.
oomy view: a more n e ~ a ~ vview
e conside~n the impact of a
~ o n t r a c economic
e n v ~ r o n m ~and
n ~how is w o ~ l dimpact on the business.
e would look at a range of business factors, d
priate s ~ a t orc strategies.
A ~ ~ ~ l a tofi othe
ss fxtors allows the p l a ~ e to
r i d e n ~key
i ~ s~~tegie
an one scenario, as i ~ ~ u ~ aint eTab1

winess Factor 1

S c ~ n a ~1 o ~ra~egy
~ c e n ~2i o Strategy I
Strategy 16
Scenario 3

Business Factor 2
S ~ a 2A
~ e ~
Strategy 2A
Strategy 2 6

Business Factor 3

Strategy 3.4
Strategy 3
trategy 3

Business Factor 4
S ~ r a t e 4A
~ r a 4B
~ e ~
Strategy 4C

are robust to more than one scena~o,

h t e ~ ~ i q u are
e s widely used
n i d e n t i key
~ ~long-term

d i f f ~ ~ c software
tools exist to aid the esign of power s y s t e ~ ~ .
s studies and a few
a ~ a ~load
~ Row
i c and
~ ~fault level
use a fa^^^ rate
c a ~ ~ ~ a t hols.
which does not, in

a fault rate a ~ p r o a is
c ~that it
on ofthe under~yingcausatioii

The asset ~ ~ a g e m ed~scip~ine

and network p l ~ n i n g ~most
s s i ~ i ~ ci~iter~ace
a ~ t i s in
the planning of asset r e p l a c e ~ ~ n tThe
developrnent of asset ~ ~ n a g e m e n ~
s is to convert these policies &to
covered in detail eIsewhere, The p l ~ e r role
programmes. In doing this the lamer must consider the asset mana
objectives and the condition and
carried out.


Risk Assessment

Risk assessment methodolo es are useful in any business and distribution b u s ~ e s ~ are
sk assessment is applied at two levels, the business level and for
~ n d i ~ i d uasset
a ~ asse~smentsas part of the asset replacement p l ~ i n process.
~usinessrisk analysis considers all areas, including network perfo~ance,finance,
commercial (e.g. use of system income), contractual and regulation. Potential risks in each
area are identified and probabilities and consequences determined. Fin
measures and appropriate actions to control the risks identified are establish
d distribution businesses, particularly where there is
n supply, the largest risks are often associated with the
income streams owing to the complexities o f the data acquisition and ag
and the number of different parties involved.
However, network risks must not be ignored. Historic control measures exist through
planning and construction standards such as the UKs Engineering Recom~~ndation
In planning individual i n ~ e s ~ e n trisk
s , assessments are normally con
likely ~a~~~~~mode f ~ i etc.
~ Major
~ ~ nee ~~ ~ failures
such as that
Auckland, New Zealand, and the recent weather-related i n c ~ d ~innCanada
and France
have prompted further debate on the appropriateness of existing design standards and the
cost and be~efitof c ~ ~ these,
~ n g


ills and

ince the privatisation 0%:the d ~ ~ ~ binu the

t o ~ there
has been angain
~educecosts. This has ~ e v i t a b ~resulte
in a very signi~cantr e d ~ c t ~ oinn
up asset m a n a g e ~ ~ on rt ~ ~ n ~ s a t ithese
o r i ~have a
ng of the n ~ t w o r ~ It
s . is e ~ i ~ e n t
incipal activiti~s,new c o n n e c ~ and
en separated, the practical i
m of ~
E the staf~ngof these org
es a differ~n~
set of coi~petenciesthan

it levels of various c ~ m ~ a n ipl~ s

orn the d o ~ s i z i n gunder~ken
ibt one can no Ion

Power System K


s and Deregulation

h i g ~ yquali~edbut able technicians has been es~ablished.The p~anningskills of the more

expe~encedstaff are gradually being transferred to the less experienced team members and
the lost competencies being replaced.
Whilst it can be argued that these skills have been r e ~ i n e dby some of those utiiities
rt to best practice, the skills gap is being gradual~yredressed. With
ing of competition in connections design and provision, the area of
will be to ~ ~ ~ ~ nand
t adevelop
the i n f r a s ~ c ~planning
skills necessary to review the
overall network successfully and d e t e ~ i n ewhere action will be required to m a i n ~ j nand
~ ~ p r existing
o v ~ levels of service. This is probably one of the areas most under pressure at
the present time, especialiy with the increasing c o m p ~ e x of
i ~ systems such as remote
control and automat~o~
being introduced and the increasing asset-manag~nient-derived
workload. The use of expert systems to capture experience and make it widely available
has not yet been widely adopted but is an obvious opportunity to suppleme~tprocess charts
in more complex and/or less routine operations.


~ r

There are three elements to network planning that need to be conside~ed~

these being the
connection of new load, the reinforcement of the system and improvements to meet quality
of supply targets,
f new connections is driven by the regulato~requirement to offer the lowest
cost connection and the need to meet larger customers needs. The former of these has
given rise to a conflict with some aspects of network desi to meet ~ u a l of
i ~supply
For example, the simplest design to connect a voltage load of less than 1 NW to the
system is to create a new substation and connect it to the existing network via a tee off
xisting circuit. If a large number of customers are supplied from this single source,
such as a large housing development, then ideally the substation should be connected so as
to be ~ o o into
~ ethe~existing circuit, as shown in Figure 4.3, in order to lessen the ri
repair time outage.

.3 Tee vs. loop connections

D ~ s ~ b u t ~inoanDeregulated Market


ecision as to whether to fund this out of quality of supply monies will depend on
the number of customers, the distance from the main circuit and the additiona~e n e r ~
losses incurred. The advent of competition in connection services would further compl~cate
this issue. The network manager will have either to pay the contractor to hstall the
additiona~cable at the same time or retrofit the additional cable at a later date. The
customer will not be expected to pay for the additional costs related to the quality of s ~ p p l y
as part of his connec~oncharge.
This c o n ~ will
~ ~ also
m apply to the installation of spurs to feed a number of
customers at low voltage (LV) where no alternative back-feed arrangements from o&er
n ~ ~ oare
r ~
or where the installation of remote terminal units for SCA
remote control may be desirab~e.Evid~ntlythis becomes easier to manage as the size of the
load increases and the number of connection requests decreases.
Genernl load growth and the connection of new load drive the need for n
reinforcement. Typically the impact affects the thermal ratings of the network appara~s,
security of supply or the voltage p e r f o ~ a n c eof the networks, but recently greater
is having to be given to managing power quality issues, particularly harmonics.
In most estab~ishednetworks the general growth of load is relatively low. In c e ~ a i n
areas, p a ~ i c u l ~ lhighly
urbanised areas, redevelopment has seen prospective loads
increase owing to new office developments and the associated IT-related loads. At the
time of writing this would seem to be a developing trend, the forecasting of which
represents a significan~challenge.
The management of reinforcement with the connection of new load has become the
most s i ~ i f i ~ achallenge.
The management of the new connections process is b~coming
progressively more detached and this is likely to lead to an increased need for
manager to monitor connections activity and identify reinforcement requirements and
implement them in an appropriate time scale. The failure of this process will ultimately
impact upon a distributors ability to meet a customers connection requir$ments within its
schedule. In large urban areas this may have not simply a financial impact on the
distributor but also an economic one,
The present regulatory process in the UK which involves five-yearly reviews to fix
income for the following five-year period increases the risk of increased r e i n f o r c ~ ~ e n t
exp$ndi~reaffecting other capital programmes,

As discussed in the previous section distribution automation in its simplest form has begun
to be used to ~ m ~ r o vquality
of supply. At this level the automation inst~lIedc~nistsof
auto reclosers and auto change-over devices.
The ins~allation of remote terminal units provides the basis for a dist~buted
c o I ~ ~ u n i c a ~ i system
o n s that could be used to implement some degree of automa~io~.
the convenienc~of the readers, an appendix is included below to detail ~ i s ~ b u t ~ o n
automation and comm~~nication
systems under a competitive env~onment.

Power System ~ e s t ~ and

~ ~~e r~e ~n l ag ~ i o n

Two levels of automa~onexist:

Via cen~ralc o n ~ Qsystems

Via e ~ b e d d e dsystems.
bedded automation systems suc as auto reclosers
ge-over sytems are probably the easiest dis~ibution autom~t
ement. No ~ i g ~ - s p ce Q
e ~r n m ~ i ~ ~ tsystems
i Q n are required as the
rn of c o ~ n ~ u n i c a tto
i oinfarm
the central control room or system
e but not essential LO realis
systems have grea~er
ilities if h~~h-peedlocal
C Q m ~ u ~ ~ c asystems
t i o i ~ can be ~ m p l e m ~ ~ ~~oss~bilities
could include
on of f a ~ ~ c~i re~di t all~wing
~ e s ~ ne ed ~ o oper~tiarn
r ~
w ~ t the
~ o ~ ~
ctional protection s c h e ~ e sor unit ~ r o t e c ~ o n he
. hi
requir~dcould be achieved by a ~ ~ m boef means

s , it WO
Id produce many of the Same b e ~ e ~ tbut
ickly. The c o ~ ~ i c a t i o path
n and c e n t r ~ ~
i n f o ~ a t i o ntralTc from the entire n
rocess several scenarios simul~neously
. However, such s
or changes in n e ~ o ~c k
e can be ~ a i n t ~ i n e d
r the following benefits:

e ~ u ~ cO ~r ~~I on
o acontrol

data and the presentation ofuseful information to the control engineer as to the actions that
have been taken by the system. Improvements in the speed of restorat~onor securing of
fault may in fume allow increase asset utiiisat~onby
supplies f o ~ ~ o wa ~netw
permitting higher short-time loading levels as the duration
automatically. 'This will of G Q U ~ Sdepend
upon the network configuration, but it increases
the potenti~~
bene~tso f r n o v ~ ntowards
~ e s h e dnetwork operation in the m e d i u ~to on^
term. A reduction in the need to carry out manual switching has a significant safety benefit,
itchgear, as an operative does not need to be in
particularly with ageing oil~ ~ ~vicinity.
e d Thisi is ~ ~ ed ~by the possibilities for local cond~tionm~nitor
and rcmote indication of alarms 1e:elatingto possible hazardous conditions.


Autor~ationCase Study - Remote Control in London Electricity

se study considers the planning issues concerned with the 10

term d ~ v e ~ o p mof
London ~ ~ e c t r i cnetworks,
i ~ ' ~ p a ~ ~ c u ~the
m d e to i
ve qua~ityof u ~ p l ~ .
The ~ ~ ~ o d uofc at remote
~ 5 ~ control and data acquiition system has been c
~ to ~
lectricity's development lans or its secondary (MV and LV) networks over the

This case s ~ d yconsid~rsthe p~ilo$ophybehind the ~ r Q g the~ ~ e ~

deployed, the ~ d v a n t a gLondon
believes these offer over alternative system
performance d e ~ ~ vtoe date.
review of secondary syst
m m e was brought to th
control review in 1 9 9 4 / ~when the re lator's focus on quality 06 supply ~ ~ p r ~ v
The remote o ~ e r a t i oof~network ~ w ~ t ~allows
h e s s w i ~ c ~ i ntogo
an engineer can reach the a ~ ~ e c t area,
e d often in excess of an hour i
reducing the intemplion time seen by a large number of aEected cust
~ ~ o g rwas
a ~therefore
~ e tar eted to ~ e d u c~ues ~ o ~~eirn u t e lost
s from am
to a targct level o f 40 in 2000.
all asset ~ a n a ~ e r n e plan
n t required that the remote
to deliver data ~cquis~tion
and ~ ~ ~ e ~ l i oni
g e itn or
t in^
the basic control necessities. This approach has proved well foun
as will. be discussed later.
et performance improve men^ a ~ ~ r e e - $ approach
s across the 6.6 kV and I I kV ~ e ~ o r k ~ .
approach a i ~ e to
d d e l i v ~as~much benefit as possible in the initial phase.
The first stage was aime
targeting one in every four ring mail1 units in
~ e r f o ~~ e~~ go rTh~ s . networks in London E ~ ~ c ~ i c i tsyste
groups of about four circ
ese groups are run radially with a nu
between them, e f f e c ~ ~ ~creating
e ~ y an open four-feeder ring. However,
d i v ~ d ~into
d two er ~ a t ~ g o ~~i e se ~ on ~w~ether
n ~
the ~ns s o~c i a t e ~


Power System Restructuring and ~ ~ r e ~ l a t i o n

operated radially or interconnected, i.e. operated as a mesh. The meshed LV systems are
typical of the centre of London and assist in coping with the hi
~ e t ~ i n s tand
e r the City of London.
The greatest initial benefit in quality of supply performance was to be gained fiom
~ r g e ~ i nthe
g areas where the LV networks are operated radially (the radial areas)
no ~ u p p in
o ~the event of an MV fault, which is a characteristi~of the in~erconnectedLV
system. The feeder groups supplying thc radial areas were ranked in order of their
e over the pervious years, bearing in mind any major asset repla~ment
to correct high fault rates.
U installation programme was then targeted in these networks at open points
urth ring main unit which offered suitable switching point. In order to
achieve the switching ~ n c t i o n in~ the
i ~ existin ring main units a p r o g r ~ m eof retrofit
actuator solutions was developed to mitigate the ed to replace switchgear. Initially this
e ~
was t a r g e ~ eat~modern SF, ring main units and some of the more m o ~ oi~-fil~ed
which were deemed suitable. This resulted in remote switching being ava~lab~e
at an open
point and at the approximate mid point of each circuit. A fault passage indicator with
provision for remote indication was fitted with each ins~al~ation.
This would allow
50% of each feeder to be restored by remote switching,
The second stage of the programme extended the provision of remote control facilities
to ~pproximatelyone in two ring main units, again with the initial concen
the w o r s t - p e ~ o ~ i nfeeder
groups, In turn this would allow up to 75% of
restored by remote switching.
The third stage extended these facilities to those ne
interconn~ctedLV systems. This is a more complex task as ea
equipped with an LV air circuit breaker (ACB). This is installed to prevent network
collapse in the event of an MV feeder fault, due to either a fault infeed
or resulting network overloading (it being preferable for the ACB to op
network fuses which then have to be identified). It is operationally desirable for th
to be con~olledto reduce the number o f site visits by e
ers in the event of a
while a ~ e m p t i nto~ secure
supply. It is also necessary to know the status of the
s u ~ ~following
~ i ~ sa fault, so remote indication had to be prov~ded.
A one-in-two strategy was adopted as this was felt to be the m i n i ~ un ~e ~ s s to
e the degree of control required to secure supplies remotely without the need for an
eng~neerto be present in the field.
f 1999, London Electricity had equipped 3000 MVLV substations with
emote control facilities as part of stages I and 2 of the ~ r o ~ a described
m ~ e
3 was ~nitiatedin late 1999 and would begin to take effect in the least we
interco~nectednetworks during 2000. The majority of these, 2000 of them,
1999. The performance of the programme has been excellent with customer minutes
lost visibly reducing with the numbers of units in commission. Supplies are now restored
to all customers within 1 hour for over 50% of all M Y network faults. Most pleasing of all
has been the n ~ b e ofr routine switching operations that were soon being carried oat using
the system.
Figure 4.4 shows the theoretical performance estimates made when the project was
co~ceived.The t ~ curve
shows the predicted p e ~ o ~ a against
n ~ e the b o t t o ~curve,

~utionin B



RTU P O P U L A ~ I Q ~

_ . (HV)



. " - . - ITrend.


estorafion performance

The original vision for the development of the initial remote control system was to create
n e ~ o ~r ~~a g e m esystem.
The advance , e x ~ a n d a b and
l ~ to a l~rnited
l e n ~of
ent RTUs were chosen ta facilitate this deve ment. The ~ ~ i i te~l ea m
ans &realready being i m p l e ~ ~ n t e dAn
. auto change-over ~ ~ e c h a has
~ ~ been
i m p l e ~ e n t ein~the
e ~1
s logic to allow supplies at open poi to be r e s t o ~ in
1 ~ ~ ufo~~owing
t e
~ ~ ~ fault.
o r This
k de~iversan
1 as the customer minutes lost.
ated res~orationo f
expanded to deliver
There are still many
to be o v e r c o ~ einc
location logic and c o ~ ~ ~ ~ i c a t i The
o n sneed
unicate to a ~ ~ m b
than ~ n c in
e less than a minu~ewill pose a s i g ~ i ~ c achallen
There are, howe~er,other aspects of network ana age
R W was specified to cope
d ~ o n i t o ~ nand
the LV s y s t e ~via ~ d ~ ~ t i o n
g con
to inte~acewith the
e developed to include discharge levels in cables and v ~ r ~ ~
i n ~ ~ 6 a ~of
o rthe
s c o n ~ i ~ i oofn switchge~and
r n o ~ i t o ~ nofg the LV load on a s~ngle-phase
s even the location of faults.

e of the main reaon for uti~~ties

to advance a u t o ~ a t i ~ofn ~

~ s ~
mice. ~ e r e ~ u l a t i oisn evolving to establish some
o penalise utilities in case o f ~ o w - ~ uae ~ iic~eh
cy will grow, and high peak prices fo
cast load control will help manage the risk associ

ion auto~ation~ ~ o v i the

~ eability
to c o ~ u ~ i c avital
t e in
gives the ability to monitor and control that information from a central location. In sho
the s y t e ~could tell whose e l e c ~ r i cis~out
before anyone calls to ~ o ~ ~ ~And
a i 1n .
could save money by retori~gpower sooner than ever before. itribution a u ~ o ~ ~ t i o
allows ~ o ~ t ~ ~ o n ~ ~ ~ to
~ t provide
~o s~ ~the greal-time ~ ~ w ~ needed
e d ~to eo p ~ ~ i s
can ~ a x i m i s ecustomer satjs~ac~ion

ns with remote
e ~ech~ology

structuring and ~ ~ ~ ~ ~ l a t i


improving revenues and reducing costs. ~istributionautomation i s a complex subject

g the following major coi~ponents:
remote terminal units (KTUs);
A master station (open systems design, full ~ p h i c s ) ;
~nctionality(feeder sectionalisa~ion,cold load p i c ~ p topology
voltage/var control, graphic feeder tracing, switching order preparation, special reports,
automatic meter reading, etc.);
operations and maintenance procedures (safety, tagging, pe its, c~earances,work
orders, preventative, routine and restorative practices, spare parts, service ~greemeiits~~
s y s t e ~integration, design and management; and
c o ~ ~ ~ c asystem
t i o(e.g.
~ cellular phone, radio, power line carrier, ~ ~ ~ p ~ e ) .


emote mina^ Units

C o n s t ~ t ~involved
with improvements in RTCT technology are things such as the
develop men^ of ladd~r/sequencelogic/PID algorithm ca~abili~ies,
multiple serial interfaces
to a c c o ~ o d a t esmart meters and relays, peer-to-peer rotocols arid direct ~A~
For d i s ~ b ~ i t i oautomation
purposes, small, low-power, w
of, c o ~ p aRTUs
are available. These come in a variety of enclosure packages,
fically cons~ained
points counts, direct CTNT inputs, AC analyser modules to give a variety of calcu~ated
i n f o ~ a ~ i o and
n , more. The units can p e ~ data
o ~logging to m ~ i m ~ the
s e need for
constant polling via the communications system, In some applications, peer-to-peer
com~unicationshave been utilised to facilitate independen~islands of automation (
volta~e/varcontrol) that do not rely on the master stat~onfor decisio~~ a ~ i and
n g
control actions.
initiated repo~-by-exceptjonprotocols are being utilised by sorne vendors to keep
power draw (from constant co~m~nications
with the master stat~on)to a
~olar-poweredunits are in common usage. Compact, ~ow-mainte
er i s also available. With the advent of two-way commun~cat~on
its, a great future lies ahead for dis~butionautomation and
manage~entapp~icationsat the customer level for functions such as remote
selective control of customer loads, surveillance of customer installations,
choice of electricity rates.

The d
e of modem
~ open
~ systems SCADA c o n ~ ~ a t ~ makes
o n s use of consid~~able
t e c ~ o l o g yto spread the risk that a single f a i ~ will
~ e wipe out or ~ s a b ~
technology permits hi
a mission-c~tical system. odern ~~~A~
processing and achievem
of graceful degradation upon failure
hics d~pictionsof system assets,
works~ationsand personal computers give users ful
very ex^^^^ win~owinto the
often in proper ~ ~ o g r a porient~ti~n,
and prov
systems they are controlling. The dissem~nationof computing elements and the
~ e x i b i l ~of
t y full graphics interfaces have in~reasedthe b ~ r d e nupon the system

in a ~ e r e ~ ~ a Market


these numerous features. The control system ~ i e ~ a r c hfor

y the whole o f
must be flexible, with its topology adaptable to meet the c h ~ ~ i n g
d a ~ b a s e sneed to be kept synchronised so that all users view
must be c o n s ~ c t e din a manner that makes operator na~igation
nition simple under the most stressful situations. These items, if
can lead to poor operator acceptance of the new tool.
system architec~recan now be dynamic, allowing change and enha~cement
over time as both user needs and technology change. Relational database ~ a n a g ~ ~ e n t
systems have facilitated easier, more functional interchange of data with other c o ~ o r a t e
s y s ~ e ~(accQ~~ting,
custonier records, maintenance m a n a g e ~ ~ nwork
Compact, high-de~sitystorage media have simplified the tasks of
lar b a c ~ pkeeping
historical data and managing archives. Disk shadowing pro
hot standby data
req~irementsfor key operational areas.
Distribution ~ u t o m a ~ functionality
in the ~ C A must
~ A work with the actions
reactions of the distribution system protectiQn equipment. Actions taken by the logic or
protection and SCADA) must not compete with
c o n ~ oa ~~g o r i t h ~ofs both $ y s t e ~ (e.g.
r to cause additional roblems. Those applying distribution a~tomat~on
wer systems must ensu that all protection schemes and systems are thorough^^
and catered for. One needs to have consid~rableexpe~encewith protect~on
schemes involving:

smart relays which f e a ~ r ~e u ~ t i pse~ings

and c o ~ u n i c a t i o n sinte~acecapabilit~es;
relay, recIoser and tap/transfo~erfuse coordination; and
lel opera~~ons
between buses or substations.


standard power system SCA

feeder load shedding - c o o r d ~ a ~ manual,

rotational and under frequency schemes;
processor - provides up to the moment topology and energisation status;
cedure generation and management^
dis~butionpower flow;
-load p i c ~ estimation;
former load ~ a n a g e ~ e n t ;
supply interruption reporting and outage management;
fault ~ o ~ a ~ i a n ;
(load transfer and recon~gurationc a p a b i ~ i ~ ) ;
automated feeder r e c o n ~ ~ r a t i and
o n service restoration;
voltage/var control - t r a n s f o ~ e tap
r and sw~tched-capacitorm ~ a g e ~ ~ n t ;
short-circuit analysi~;
d e ~ ~ d - s i manage~~ent
- load management and time of use strategies;
aphics capability to
ide schematic display, switch posi~ionm a r ~ i n
lemetere~),feeder c
tivity status, and energisation status info
in real-time an the operators VDUs; md
training $imulato~s.


Softwui-e F ~ n ~ ~ i o n a l i ~

1st the ~ a ~ d of
w a~ Se C ~ system
~ A is of gr
primarily in system and applications software. The
lity, s u p p o ~ b i i and
i ~ mainta
odem systems buil~to inte~ationaiiyaccepted
Windows e n v ~ r o n ~ e n t ~
r ease of pro~rammingand p ~ ~ a b i l i ~ ;
t any language to
e-critical and comput~~gompete for co~puting
ase co~nectionto allow easy passing of real-ti~eand ~ i s t o ~ ~ a l
database and system t o p o ~ -oassists
w i ~ hease of s
es ~ o p o l o ~p yr o b l e ~ much
easier; and
that are based on tried and proven 8
n have significant co~sequen~es
gorous design ~ h e cv e~ r i~~ ~ a ~tproced~es,
i o, ~

~ u n i c a t i osystem
for ~ ~ s ~ b auto~ation
u t ~ o ~is
s ~ i ~ e rrece~vers
and data links. The s y s t e ~s h o u be
~ ~desi
~ersonnelwill have to b
nt~nancewill be as easy as possib~~.
involved and new tools will need to be purchased (the
o f a pote~tial system).
ent will s ~ ~ i ~ c a ni ~
t lpyr o v e
use of s~andardisedcomponen
~ o ~ not
$ donly allow better compati~i~ity
with existing communicatio
that the s y s t e ~will remain
also i ~ c ~ the
u ~likelihood
and a ~ ~ o m ae~~i uo i~p mdeveloped
in the future. This
~ ~ i n ~ e ~costs
a n ctoethe u t i i i ~ .
k m a n a g e m ~analysi
roached by each u ~ i i ~ .


~ i ~ ~ r i b u tin
i oanDeregulated Market

There are several aspects of O&


for distribution automation to be considere

bution automation installed (who does what, why,

ion automat~on~ u i ~ m e n t .
ation equipment, software, d a ~ b a s e an
( ~ o n ~ g u r a tmanag~ment~
spare parts holding^ service contracts~~
Training to suppor~the accepted p~losophieso f operations and ma~ntenance both
cl~ssroomstyle and using simulator scenarios.

int-to-poin~w ~ ~ between
and impossible to
solution i s needed
addi~ion,an inexp

into fbture techo

emote monito~ngand control.

nications ports with
n-line con~guration.
~ d l i an large
~ number of points while ~ a i n t a i n i ~real
ion of SCADA s o ~ a r efield
equipment, system integr ion, commun~ca~ons
au~omationhas to be
on of an integrat~dsystem with both high-voltage sub
feeders. This would help to optimise operations requirin
rew working at d~fferentvoltage levels.
of power n ~ ~ o diagrams,
r k
plant data and teleme
ntrol (remote or manu
ltiple ~ a t a b a s ~and

01s for p~anningand o~timiat~on

faces to fault maiiagem~ntand custom~ri n f o ~ a t i Q n
and map h an age men^ systenis.
to the success o f any ~ e ~ e c o m m ~ ~ i c a tand
i o nns ~ ~ ~ o r k ~ n
Systems ~ n ~ g r a t is
i ocritical
i n i t ~ a t ~ Since
~ e . most sy~temsare not developed in a vacuum, ~ntegrationo f ex is^^^ or
essed. This ~ntegrationmust be
r ~ ~ u n ~ c a t i level,
o n s which ensures that ex
of working in the new system to e n s ~ integr

level, which ensures that ~ n f o ~ a t ~genera~ed
a p p l ~ c a can
~ o ~be accessed by another application. 0th levels are critic~lto the success of
the system and the organisations ope~ations.Access and a v a ~ ~ a b iolfi fflformat~on
in a
timely~accurate and user-fiiendly manner are necessary for the system to be a success. The
develop men^ and i m ~ l e m e n ~ ~ i oofn any t e l e c o ~ u n i c a t i 5 ~system will affect
o ~ ~ ~ ~ soperations.
a t ~ o The
~ ~success
of any project i s a direct result of the a~entionto
detail given to system specification, design and i ~ s ~ l l a t i oThis
~ i . ~nc~udes
what was specified and procured has been delivered, testing of system co~ponentsand
~ oensuring
n s ~ that the system satisfies ~ ~ n p l e ~ ~ tr ~a ~t ui ~o r~e n i eand
r e ~ l a t guidelines.
ana age men^ i n f o ~ a t i o nsystems (MIS) are becoming an ~ n c r e ~ i n g li y~ p ~ ~tool
a n t
in the daily operations of electric ut~iities.The i n f o ~ a t ~ osystem
is more
col~ec~or,r e p o s i ~ o and
transpo~ ~
c for~ i n f~o ~ ~ ai ~ i o~An . w~
i n f o ~ a ~ i system
is a combination of hardware, software and c o ~ n ~ ~ c a t i~o nas ~ a b j
rnis the foundation of efficient opera~ionsand dec~sionm ~ ~ i ~ ~ .
ode^ ~ntegrate~
network management s~stemis used to control
remotely and to supervise manual operations on MV distribution equipment. The system
au~omaticaliyprocesses topology and highlights d~-ener~ised
feeders when devices change
state after telemetry input or manual dressing. System Alterations and s w i t c h i ~
are prepared in advance and operations can be a ~ t ~ n i a t i ~ ch
d ~ ~ safety
n e ales.
Power analysis functions can ~ a l y s ethe
n e ~ o or
r ~individual distribution feeders. One of the major ben
world-map schematic diagrams, plant parameters and network CO
one co~sis~ent
system. Data is held at a variety of levels of de
analys~sand detailed device operation.
twork operation functions are those functions which enable control an
d i s ~ ~ u t i onetwork
facilities and inc~udecontrol, mon~toring,fault
erating statistics. ~perationalplanning functions are facilities to de
optimise the sequence of operations required for carrying out maintenance work on the
system and include network s ~ u l a tand
i ~switch
action ~ c ~ e d u[IO,
l ~ 1g13.
The primary purpose of a network management system for network operations is to
patch o f field crew (people) to ~ a i n and
~ ri ~ the network, safely and
whose primary ~ u r p o s ~
differs from an energy management s y s t e ~(
is the dispatch of power (MW and MVAr}. The modem ~ o m p e t ~ t ~market
v e emphasises
that utilities need to monitor and improve levels of customer satisfac~ionas well as
o p t ~ ~ s i network
~ p ~ r a t i o and
n s controlling operationa~costs.
ion creates a new wave of electronic brokering as electricity is bought and
odities market, Tracking of these ~ a n s a ~ t i o w
n s~ t h ai given
utility should
be m a ~ a ~ e a b lheo; w ~ v emost
~ , of these ~ ~ s a c t i o will
n s span mul~plec o ~ p ~ i eIns order
to achieve interoperability, implement
of a common information
el has a data structure that is c
, The common information
S p r o ~ r ~ esystems.
Most infornaation networks wil! be connected to the EMS to provide accurate real
data to stipport the available transfer c a p a b i ~ (ATC)
~ ~ e r mar
t e ~ ~
~ beL used
) to present i n f o ~ a t i o nto customers.
ge ~ ~ T will
for customers to use to request
d by the transmission services i
col ( ~ T T Pi s ~used for data
~urchasesfrom a provider. The

- x

Distribution in a ~ e r ~ ~ l a t e d

then: IED on the n e ~ o ~ k .

increa~inglyc o ~ ~ e t i ~

ovide m e a ~ o~f de~~a m i security

to allow the system

A will allow ~ t a b i ~ i t y - c o n s ~utilities

a ~ e d safely to inc~easethe loadin
will also allow ~ i ~ e l y
can also i ~ p r o v es y s t e ~reliability,
essment of the security impact of ~ a n s ~ ~ ~ ~ o n s
lt af open axess to the

that a p r e ~ i ~ i dn ea~~o n s ~ a ~ usi

has resulted in a p o t e n ~ savings
enefit of the p ~ o d ~ c t ~version
i be a~5 %~inc~eas~
t in
t r a ~ s ~ i s s capacity
across a cons
grease^ capacity could be used on

integrat~onprocess should drive all utilit~estowards the standardisatioi~of data ~ ~ o d e l s

c o ~ m ~ i c a protocols.
ay an ~ncreainglyimportant role in the daily o ~ ~ a of
~ ~ o n
ust a means of ~rovidingconnectivity b e ~ ~ one
e nperson and
t e l e c o ~ u n i c a t ~systems
are the c o ~ i e r ~ ~ o fn e
ing b e ~ coin~unication,
~ r
not only b e ~ e e ne ~ p ~ o ~ e e s
recent ~ h a ~ g in
e sthe teleco

~ o ~ ~ u n ~requires
~ a t ~~ aon sn~ i s i channels,

services from the carriers who

c o r n ~ a ~found
~ ~ sthemselves with campus-wide EANs capabl~o f ~ f ~ c i e nh ~a n~ ~y ~ ~ n
y com~arison,the data
and not well s u i ~ eto~computer~~o-co

e early 199Os, ~

a began

s, lower delay and lower CO

ment at each end, much as is
s users, because they concen~atetraffic fkom m
links from their premises to the carriers centra
the c a ~ a c of
i ~fiber. Fiber not o
sion of c a p a c i ~s ~ m p ~byy i n s ~ l l i ~more
by businesses for ~ber-basedaccess has i
and an a ~ ~ e ~ a t e

ase s ~ t i o nto a cell served by another, the wire~essaccess link is automatical~y

to the new base station.

~in ab Deregulated
u t ~ Market
~ ~

services digital networ~swhicb bring common channel si alling right to the

~ t h e ~ was
e t chQsen as the d a b link layer because of its predominance in the
e subsequent availability of low-cost imp~ementationsand assoc~ated
s b ~ d g e sand routers). In addition, the scalability o
i i ~ p ~ e m e n t a ~being
o n s fairly common and 1Gb Eth
its way. ~ r o c e are
~ o av~i~abIe
tooday with multiple 10 Mb Ethernet
the chip, and next-generation d e s i ~ are
s planned with 100
device, two solutions
As it was d e e m e ~desirab~eto be able to access data
: Transmission Control P r o ~ o c o l / I n t ~ ~
n t e r c o ~ e c (OS).
TCPlIP is a networ
ational ~ ~ d ~ d ~ s a[l4,15],
t i o n it was
e I S 0 network layers. These layers have robust flow control
ery useful on a busy subta~ionLAN. th network layers s u ~ p the
to hear. This f e a ~ r eis very
ng a message for all devices on the
s such as data capture triggering, time s ~ c h ~ o n i s a t iand
o ~ , even
eel models [ 16,171 are used because they can easily
ay makes measurements of voltage, current and
The m e a ~ m e n t smade by the re~aycan be
conta~ingall the elements mentioned above. If
r quality and power factor are added at a later date,
the ori~inalmodel i s easily expanded to ~ c o ~ m o d athis
t e data.
Fully in~~ractive
co~municationsystems provide a full range of
voiceldata transfer, remote access and controj, entertainment and e d u ~ a ~ ~ o~ nd. ~ e d
c o ~ ~ u n ~ c a t ~no~n s~, o capabili~
r k
and services may also have an impact on the s t a f ~ n
needs of the organisation. An evaluation of the existing staff, roles
is necessary to determine if the required capabilities exist or if new s
staff are requir~d.
ith the con~ntlychangin ~e~ecommunications
~ n v i r o ~ e and
almost any ~ ~ ~ a n i s ato~ o nffer t e ~ e c o ~ u n i c a t i o n scapa~iiities
c o ~ ~ ~ r ~ the
i a llegal
~ y issues
related to a system must be evaluated at
the organisation can address these early in the development process.
power distribution systems requires the use of an effective
to trmsniit control and data signals between control c e n ~ e sand a
c o ~ u n i c a ~ i osystem
large number o f ~ e ~ o t elocated
~ y devices. Since there are a wide range of available
c o m ~ ~ ~ i ~ ctae tc~h o~ on ~ ~ gcapable
o f performing this task, selecting tbe appro~r~ate
co~municationsystem requi~esa thorough understand~ngof the s ~ e n ~ and
h s weaknesses
of each com~unicationt ~ ~ o l o g ~resently,
no single communication techno~ogyhas
been de~onstrated as being best suited for all distribution auto~ationneeds. Each
d i s ~ b u t i oautoma~iQn
scheme has ~ n i q u ec o ~ u n i c a ~ requirements,
and t h ~ r ~ f o ar e
~ o ~ m u n ~ c a t i ot encs ~ i q u efor d~stributionautomation must be chosen based on those
unique r~quirements.
e shared with others. Fo
owes on a monitored hr

The c o ~ m u n ~ c ~ t iroenq ~ ~ r e m efor
~ ~ distribution
automation depend on the size,
complexity and d e ~ r e eof au~omationof the d ~ s ~ b u t i osystem.
In general, it is deirab~e

ower System ~ e s ~ c ~ ~ n

nt and

re data rate r ~ q ~ i ~ e r n ~ ~ ~ s .

ishibution in a ~ ~ r e ~ l a t e ~

There is no i ~ ~ e r ~ ~ t

to the further dev

ations. It can be

the isolate^ area.

near-instantaneous ~ n f o ~ a t i o n
of a single household. It supports rapid, report netwo
d to optimise network loading for reduced e~ergylosses in effec~,
A facilities for the lower levels of the d ~ s ~ b u ~iiioe n~ o r k And
ogy can monitor deviations from establishe
f possib~et a ~ p e ~ n Variable
rates can be
f debts ( t ~ o u g flexible
p r e p a ~ e n can
t ~ be e
an empty b ~ i l ~ i nremote
disco~ectioncan take place with complete c e ~ a i ~ ~ ,
~ u ~ hnew
e r tariffs can be quickly and easily p r o ~ ~ into
~ eany
d ~ ~ s t 0 ~ eete
r 9ers
down the wires whenever required. The data can be ~ a n s f e ~ einte~activel~
e l e c ~ ~dc~is~~ i b u t ~system
o n to the dis~ibutorso
supplier and custo~er.~ i n a ~ c iapp~ications,
b e ~ ~ stores
e n and finance organisations, can bec
could use the existing e l e c ~ ~ c i ~
txnd supplier. As a result, no
s ~ p ~ acarrier
t e media. Two-way data ~ ~ s ~ i s s i o n
not only on LV n e ~ o r ~ s ,

2233 that a circularly $7

linder in free space. And a
e, by the early 1960s ther
ion in what was then c

and ~~~k~ 124

ised that the losses
ties. They ~ o a paper
~ e tlz
into accoun~repe~tercosts
[25]. This set the stage for the commercial devel
and i n d i ~ a to
t ~the
~ telepho~ecompanies in ~ a r t i c u ~the
a ~way to
b e n e ~ ~ c oratio.
s t For a ~elephoneappiica~on,the economics are most
two conditions:

e b e ~ ~ rep~aters
e n
should be maximised~ eat~rsare expen$ive
nd the fewer the better.
idth of the channel should be m a x ~ ~ i s eIn
d . this way the ~ a x i ~ u
be routed on a given channel, and the cost shared ~ ~ o ~n g~ s n y
Because of these factors, the first widespread use of fiber optics for c o ~ u n ~ c a t i o was
s. s
the ~ongdistancetrunk lines of the telepho~ee o ~ p ~ i eThe
to ~ ~ ~ r o v e ~ine the
n t ~s e ~ o ~ a ofn the
c efiber, to the exte
rs are usable over large distances. At the same t h e , the cost
to the point where it is co~parable,on a l e n ~ h - ~ o r ~ ~
or. The i ~ ~ ~ ~ cofa these
~ i odeve~opments
is that fo
er optics can be used to replace copper trunk cables,
ne optic~lcables could c

le of an ~ u ~ s ~ n~a ~ i c ~~
bm-way c Q ~ ~ u n i ~ a t i Q
s . case fault detectors must c o ~ m ~ i c wi

cisntrol centre so that the fault location cm be d e t ~ ~ ithen

~ e signals
~ , must

automation will be
e ~ ~ a s to
u ~adverse

flashes, ~aultsor switc

~ ~q


Free Space
Free Space
Optical Fiber


o f the ~ u r n obf us


The scheme uses local i n t e l ~ ~ g ~tonec ~~ a m i ~local

e d ~ tot see~ if there is ~

roblern, b e c a u ~each
local set of
nctions such as feeder d e ~ ~ ~ y r nse n t

for less than $3000 per km.

i s ~ ~ ~yst~m,
~ ~ twi~Q
e r etr
energy is very close, ~~r~ is

n is r e q u ~ ~ dit , is usually n
from Scratch, For example,

to add ~

w feeder monito

Dis~butionin a Deregu~ated

Q V any
~ Qb~tacles
that might be p r e s e ~ t ~byd the c o ~ v ~ ~ t i o n a l
media. Fiber allows the c Q ~ u n ~ c engineer
a t i ~ ~to design a s
~ that will
s meet
~ all~the ~
worst-case require ents, that can acce as many locations as n e c e s s a ~and can handle the

~ e p a ~ a t i oofn bMsinesses: proposals and cons~tation.Office of Gas and E l e c ~ i c i ~

.N. Allan, A~sessmen~

of customer outage costs due to ~ l e c ~ ~ c
s e ~ ~ c e i ~ t ~r e~s ip~~e ~i t~isector,
a~~ s : IEE Proceedings - ~eneration,Transmi.~sion and
I 1996, pp.163-170.
N.Allan, Eva~uationof reliability worth and value of lost load, ZEE
~ r o c e e ~ i n g ~eneration,
~ r a n s m i . ~ s ai on~~ ~ ~ s t r i b u t iVol.
o n ,143, 1996, pp. 171-180,
~ ~ f o ~ aand
t iIncentives
Project: Defining output measures and incentive regimes for PES
businesses Up~ate,Office of Gas and E l c ~ ~~~~e~~
~ c i (~O f g e ~ ) arc^ 2000.
, ~ a ~ y sand
i s evaluation of five s h o r t - t e ~load f o ~ c a ~ t i n g
asactinns on Power Systems, vo1.4, No.$, October 1989, ~ ~ . ~ 4 8 4 - ~ 4 9 ~
P. Van Olinda, N o n p ~ a m e t r~ ec ~ e s s based
~o~~ ~ o ~ - ~ e r
ons on Power Systems, Vo1.13, No.3, August 1998,

i. T.L.Lu, A. Abaye, M. Davis, and D.J. M

ANNSTL~:A neu~ai-network-basedelectric load forecasting system, IEEE T r ~ n s a c ~ ~ on
Neural Networks, Vo1.8, No.4, July 1997, pp.835-846.
.L.Ring and R. Luck, Very short term load forecasting a l g o ~ ~ ~E~~
s , E l e c f ~ ~c ~ i l i
orec casting in an Era of Deregulation Conference, Dallas, TX, November 1996.
Wiktor Gharytoniuk and MO-Shing Chen, Very short-term load ~ o r e c ~ s t using
in~ a ~ ~ ~ c i a l
~ pp.263a ~
neural n e ~ o r k IEEE
s ~ ~ Transact~onson Power Systems, Vol.15, No.1, ~ e b 2000,
ED Ad-Hoc W o r ~ Group
~ g 2, Distribution Automation: hnctions and data, CI

structuring and ~ e r e ~ l ~ ~ ~

IEG 61968 System Interfaces for ~istribution anagenient - Part 1: Interface

A r c ~ i t e c ~and
r e General R~quiremen~,
IEG 1999.
Cauley, Peter Hirsch, Ali Vojdani, Terry Saxton, and Frames C l e v e ~ ~ dI, n ~ o ~ a ~ i o n
n e ~ o sru~p ~ oopen
~ s access, IEEE Camputer ~ ~ ~ l i c ain tPower,
i o ~ 1996, ~ ~ . 1 2 - ~ 9 .
[131 Peter Hirsch and Stephen Lee, Security applications and a r c h ~ t e c ~ for
r e an open mar~et,
~A p p l ~ c~a t i oin~Power,
~ July t1999, pp.2~~31.
A ~ ~ and
~ ~ ai l l ki a mPremerlani, ata c o ~ u ~ i c a t y oin
n sa d ~ ~ e ~ ~nvironrnen~,
u ~ a ~ ~ d
~ p ~ l i c u t i ain
n sPower, July 1999, pp.36-39.
11188-3: I994 ~ f o ~ a ~~i eocnh n o ~ ~o n~t e ~ a ~ i o Stan
~ o ~ TJpper
o nLayer equirernents Part 3: ~ ~ n i n iOSI
aha and W. P r ~ ~ e ~Object
l a ~ ,Oriented Mode
tions, Prentice Wall, 1998.
est M ~ t ~ ~ o d o i o ~Setup,
i e s , and Result ~ o c u ~ e n ~ a t i oEPRI
n ~ S~onsor~d
hernet for Protection CO
ersion 1.O,May 1997.
EE ~ o r ~ i i Group
ution Auto~ation(Edited)
Tutorial Course 8 8 ~ ~ 0 2 8 0 - 81988.

Vo1.82, 1910, pp.4

e on Electric Utility Power Lines

Power System Restruc

eals to ~ h ~ s i c a~ansfers,
this risk i s e x ~ e ~ e hl y
f ~ a n c i atools
that can be of help.
of b i ~ a ~ contracts
(and various other ~nancialdeals on the
P faces not only an increase in o~era~ional
d ~ f ~ c u l with
~ ~ as the market need
far ore
also a c o n ~ indplannin~
ission system can evolve. This has serious
ences in
~ e ~ i as~ eviden~ed
b ~ ~ by
i ~recent system-wi~eblackouts. Tn the subse~uent~ections
below, we present a p a ~ ~ c u l amarket
structure that equips the TP with ~ a r k e t ~ , b a s e ~
solutions to conducti~ as energy m a ~ k ewith
~ a large umber of bilateral ~ a ~ ~ a c t i o n s .
to become actively involv
allowing the TP t~ pupsue
em can also be solved in an ~ f ~ c i eway
n t as inten
with the in~Qduction
of compet~tion.

i s ~ s isi one
The e
~ ~ ~~ s ~~ system
~~ of~ the
~ most
c complex c o n s ~ c t system.
to tbe e ~ t e ~ as lt ie~~ i from
n ~ the opera~ionof the ~ a n s m i s ~ ~system,
o n imple
the market mechanisni to the ~ n d u re~uires
s ~
a fair level of u n d e r s ~ n d ~o fnnot
cial and r e ~ u l a t oaspects
but also the ~ n g i n e ~ r iconsequences
~ i ~ u5.1
r e shows the evo~utionof the role of the TP in the industry (as at the time of

~ ~ o ~ofuthe~role
i of
o tbe
~ TP

In the dependent phase the TP functions as a part of the vertically integrated utility. In
the ~
u phase
~ the TP
~ oversees overall market activities, The ark et
pa~icipantsare ~equiredto submit their intended use of the system to the TP and based on
that i n f o ~ a t i o nthe TF allocates transmission capacities foIlowing strict ru'les set
e TP assumes no ~ n a n c ~respo~sibilities
and has mi~imalinterac~~Q

ants. As shown in Figure 5.1 there are three differ nt s ~ c ~ rofe the
s TP
phase the TP ~ a ~ c i p a t eins every ~ ~ of amarket
~ e
nction of the TP in this phase can be c a t e ~ o ~ s easd that of marke~m
s e ~ i ~~r oev ~ d eOf
r . ~ e s two
e only the function of market
As a service ~ r o v ~ dthe
e r TP assumes full financial l i ~ b i l ~ ~
We will disc~ssthe role of the TP in each phase in deta

the TP exists only as a part of a v e ~ i c a ~~nte~rated

u ~ i l iThe
~ ~
ity owns and operates a ~ ~ ~ 5 i d e r ~ ~ ~

e utility is a an teed to ~ e ~ o v e
ning of the system by
lem of short-term generation sc
n to b ~ l a ~load
~ edemand devi~tio
and to do this at the lowes
0 of this problem
is given
in [ 11:~


Trans~issionExpansion in the New E n v i r o ~ e n t

e a m o u ~ot ~ i n s ~ l l generation
capacity at node i and tec
the ~ ~ o uofn ~t n s t a transm~ssion
capacity for line 1

,? :

the rate of i n v e s ~ e nin

t generation capacity using t e c ~ o ~ o (gI y


( i ) ,( i~) ,I~) :~the cost of invest men^ using techno~ogya at node i

: the cost i n v e s ~ e in
n ~line I

logy a at node i, exc~u

(t),PL~ t ) )the
: flow on line 1 as a function of system
) : the ~ a x i m ~a~~owable
flow on line 1 as a function of the a ~ o u nof
t ~ns~~le
~ t s <<~K,
~ i s ~ co anp a c ~owing
~ ; to secure c o n s ~ ~&max
rresponding cons~ain~.
The o p t ~ ~ ~ ~p ~
e r~ oa dtT~~ino ~~ r o b l (%I)*
e ~ is the longer of two time ~ n ~ e ~ov
lion or ~ ~ s ~ i i s~ sv e~ ~o~ ~earen ~valued.

As the syste
ides the level of production and the rate of investment on ~ e ~ e ~ a ~ ~
and tra~sm~ssion,
d a r serve as control variables in this fo
for the status of the system
o ~ ~ r a tcm
i ~ be
n accw

ciated by ~ x a ~ ~ i nthese
i n g variables.

This ~ o ~ ~captures
~ ~many
t iwell-&own
o ~
trade-offs relevant for the e ~ ~ c of~the~ n c
the r e ~ a t ~ ~ n sbemeen
the i n v e s t ~ timing
e ~ ~ and the balance o f the costs
er time, the value of different ~ e c ~ o l o g i at
produce powerl and C o i ~ ~ ~ e m e no ~~a~K e~ ~ ~e capacity
r a t i ~and
There are two n ~ ~ ~ c features
e a b ~~~o n s i ~ ethe
~ i operation
by the TP (as a p a t o f the v e ~ c ia~ t~e g~ ~~~utility)
t e d as the
problem: the apparent compiexity of the problem (5.1) and the
on ~
~ based on
~ costs e .,ag
~ e,,',, Owing
to ~the ~ o n~ ~ lthe~ x j
s o ~ u t i to
~ nthe p r o b l e ~is not readily available, and thus the actual o p ~ ~ aand
m are performed s u b ~ p ~ i min~ lmany
~ y cases. Further, since the rate
nt is d e ~ ~ r based
~ ~ on
n ecosts,
~ the o p t ~condition
~ ~ ~of ithe~ fom
limited to concern [fa 1: and e:(t). Nevertheless, problem (5.1) is B
ark in studying the e f ~ c i oef the
~ ~industry
as the r e s ~ c takes
~ ~place.
r ~ ~

structuring and Dere


ln the passive phase the TP exists as

final authority in
s e ~ ~ afiom
t e the ~eneration
market env~ronmen~.
A newly cre
, manages the system in order to ens
cai~iedout by the TP are tailor^

, both existing and eveloping, is highly ~ o n - ~ i f o ~ .

reg~onalcharacteri~icssome markets admit cen~alise
for whoIesa~etrad~ngand a r e a ~ - t i ~
ne or two centralised markets and still
a~icipantswith no centra~isedmarke
e USA can be represented by one
multilateral transaction model, the mandatory systena operatQr model and
as shown in Figure 5.1.
model is based on bi~ateral~ ~ s a c t i o namong
arke et
the proposed structure of the Midw
n model. The model consists of
transactions. Firstly, ~ d i v i d ~buyers
and sellers make bil
~ i t h disclosing
o ~ ~
i ~ ~ l e m ~ ~ The
t i o ~ .
~ h ~ t h or
e rnot to allo
constra~ts. If the proposed transactions do not violate any cons~aints,then they are
without any modi~cations. This is the most esired case. If the
ns result in violation of co~straints,then the T accepts none or a p
ansactions and suggests necessary mo
ion called loading vector [2].
a new set of trades to satisfy the
limits. Figure 5.2 shows the interaction among various market p ~ ~ c i pfor
~ the
t s ~odel.
In this model, the function of the TP is limited to ~
e w ~ ~e ~roposed
~ e~ ~ ~ a n~s a c ~ ~ go n s
will result in violation of system limits.

~ ~ i l a t ~ansaction

Tr~smis$ionExpansion in the New ~nvironment

Mandatory system operator model

~ i t i a ~m
l y~~k ept a ~ i c i p bid
~ ~ supply
~ s curves to the TP, although a
~ the rest of the
be made to include elastic d e ~ a n din the f o ~ u l a t i o nfor
the consumers' demand is inelastic since not much is lost in term
the chapter^ The TP then simul~neo~$ly
dispatches generators an
capacity using an optimal power flow p r o g ~which
~ , determines the most ~conomica~
of g ~ n e ~ t i ofor
n s given load. The voluntary system operator model
ports a m~1t~"~iered
s ~ c ~ that
r e min~misesthe TP's ~ ~ ~ u e on
n c profits
by m
acc~ptablelevels of reliability. Figure 5.4 shows the basic schematic o


~ o ~ usystem
~ ~ operator
r y

bilat~raland c e ~ ~ a l i s e
r e s e ~ cof~ spot market ~ansact~ons
is desired b
a l a ~ ~o fe i ~ s ~ n t ~ supply
e ~ u swith u
i n d ~ swhile
~ , direct access and custo~er

~ a n d a t osystem
operator model lead to an e q u i l ~ b ~ usolution
of the
f o ~ l o woi ~ ~
t i ~ ~ s a~ tr io~bni e ~ :

(5.1 1)

The ~ ~ ~ ~ ~ defined
i $ a tini (5.8)
o ~
. The result of solving the

~ r ~ ~ i ~Expansion
i o n in the New Environment

tive economic e n t in
~ ~ e energy market before such a prw

tion sector so that any r e ~ u l a t o ~

pendence based on the reasons given.
of the ~ s m i s
f ~ c i ~opera~iQn
than ~ u l t i p lgrids
serving c
to the high degree of the econ

ng a wide area o f the

v ~ ~~ aon s~a ~st i owhich

ns c
as well as system users ben
tamers w h o s ~~ e n e r a ~ i o ~
t a m Q u ~of
t syste~-w
For instance, it is easy
v ~ o loads
~ ~ issfar s ~ a l l e r

on of the TP, especially at the time of scarci

ent to say that the s u ~ ~ e s s
ss work9 so that the tm


Power System Restruc

TP ta
~ d d .Therefore, the ~ a n ~ ~ i
the rate of re^^ reg~la~iQn,
m o ~ ~the
l , TP sets the bundled energy and tranmission price that ~ ~ n ~ ~thei so e
~ ~ i sthe
~ system
i n ~ load at each given instant. The ~ a n s ~ ~ s srevenue
iQn i
first cut is specifie
to consumers and to sup
and the c o ~ ~ u t e
uage charges a s i ~ e d
In the ~ o ~ u n system
t a ~ operator model the

t market for the rest.

market and is subject to

ng the ~ e c e s ~ ~ s ~
s as a service provider, As a service p
e charged to each bilate

under strict r e g ~ a ~ othere

n , is

act more custQ~ers.

ssion line in (5.9, For ~ ~ a r n ~b l e ,

etter control d e ~ the
~ ~1TC
n can e

c o ~ i ~ i ton any
g major transmiss~onprQjec~

e 5.1. In the wti

~ i s s ~ o$ yn $ t e cong~~tion
only when th
e ~
~ cost gof the ~investment.

structuring and Dere

ystern because of the ineffici

high, some users will choose


total cost of ~ i s ~ b ~ t ~ d

TP and the TTC lies in the clus us ion of the ~ ~ n ~ ~ n v e s ~ $inn the
t s h o ~ - ~
ime-scale ~ n c t i o n sbecom
C in i ~ p l ~ ~bilatera
$ n ~ i ~ ~
es are create^ BS part of



I ~ c e ~ RGal
~ ~te Des

ows and thus r

Transmissioii Expansion in the New ~ n v i r o ~ ~ ~ t

lator of the ITCs profit

ITC for a higher ~ ~ c in~efficiency.

~ a ~ e

The ark et- base^ usage charges are commonly referred to as conget~o~
charges, The
zonal pricing met~odsare two widely used metho~s
s. The nodal pricing method computes the ~ansm~sio
(5.8). For a given time instant 1, the problem
gian function of the form



where ,u,f 0 if and only if FXP,, PL) = F;"'". For si

u t ~ gthe flows on each line
in the system.
ix notation are written as

icity, we use DG power Raw in

e DC power flow equations in

where &isthe voltage angle vector, Taking the first derivative of L with respect to Pi,, and
it equal to zero yields

&(t)= A ( t ) t


Suppoe the generation cost of supplier i, ciPa,is a quadratic function ofthe ou

Then, under the perfectly competitive market condition, the optimal s ~ p p l y
i, b,,, is the marginal cost bid given by

~ a t c h the
~ gsolution in (5.15) and the supply bid in (5.17) the system
price at node i, p, and the dispatch amount, P,r,,as

Finally, the ~ a ~ s ~ i srate
s i iso set
~ by the difference in the ,q, i.e. =,q -4.
The zonal pricing method consists of two steps: (I) aggregation of i n d i v i d ~nodes
into zones and (2) compu~tionof zonal prices. The system is first divide^ i
of smaller markets by a ~ g r e g a t i ~individual
nodes into zones w ~ e n
of~c ~ n g e s ~ within
~ o n each market. The ~ a n s m i s s ~ rate
a n is
so~vinga similar optlmisation prQblem as given in (5.8); the cost C,,@'~,~) n
the average cost of generation in zone i. The line Row constraints are now
~ i t e ~ a flow
c e limit c ~ n s ~ a i ni,e.
~ sthe
, ower flow on any line I along on^^ the ~ ~ ~ g e s t

Transmission Expansion in the Mew Environment

interfaces is within the m imum rating o f the line. The transmission rate is ,U]
resent zones rat he^ than nodes.
ophistication may be requ~redin order to i ~ p ~ e m e
ective, a sign^^^^^ reduction in computat~Qn
rice~capr e ~ ~ a t i osince
n only a small
rather than many nodal prices as is
ricing. Further, there is a greater advanta~eto be gained in ~ m p l e m e ~ i ~
d su~sequentsection.
~ a d as~issi ~ ~ u s ~ aint ethe
The a6cess fees are intended to recover the fixed part of the
costs and are thus
~ndependentof actual usage. However, usage-ind~penden~
charging for the access fees is
impractical and may result in improp~rincentives for the ETC. In order to s t ~ ~ ua l ~ t ~
m e a n i n g ~ ~l
h m e c h~~ i m~
gof base-load capacity needs to be ~ v e n .
practical approach is to compute the access charges based on a coincidental peak
The 12-CP method [3] i s one such approach. The p o ~ i o nof
o foloads.
a1 access fees is computed as

where S,(t> is the load is share of system coincident peak, and LXt} is the
load in month I at peak load~ngcon~itionof each day. As the total r ~ v e n u
charge is equal to the product of access charge and the coincidental peak o
approach provides the ITC with incentives to increase individual base-load ca
heref fore, price-cap r e ~ ~ a t i oand
n the rate design consisting of
es and regulator-approved access fees o
ver the ~ v e s ~ ewith
n t some incen~iv~s
for improvement in ~ ~ c i e n c y ,
H o ~ e v e r 9the resul~ingrate structure does not i ~ e ~ ~ a tyield
e l y prop~rincen~~ves
transmision ex~anding.In the subsequent section, a market mechanism called the pr~ority
is d ~ s c u s s ein~terns of compl~mentingprice-cap regulation in o
i ~ s u r a ~ service
~rovidethe right set o f incent~vesto e ~ a n c the
e t r ~ s m i ~ s i so yn s ~ e ~ ,

~ v ~ in
The driving forces of dere~lationaim to establish a more c o m p e t ~ ~market
achieve lower rates for consumers and higher ~ f ~ c i e for
n c suppliers.
trades, consume^ can establih various service ntracts with any supplier in order to
obtain the lowest rate and most desirable service. lateral contracts s p e c i ~ i the
of power9 the time and duration of the servic
d the associated rate and
compensation are n
ed and agreed upon between the suppliers and 6ons~mer
tition is directly related to the bilateral trades which allow
e, the success of the market is dependent on the ETGs abi

Since the t r a n ~ m i s s ~grid

o ~ is a physical system, the 1TC is able to honour and e x ~ ~ ~ I ~
these bilateral c o n ~ a cas~ far as the system design and opera tin^ condit~on
Unlike in the spot m
1: the ITG is not allowed to pa~icipatedirectly in re~dispatchin
Thus, the ITG relieves ~ ~ n s m ~
1 trades or by 6reating counter ~ Q W Sin

Power System R e s ~ c ~ and

~ nDeregulation


systematically adjusting the rate structure. All bilateral on^^^^ are

the replacement resources in case of ~ n t e ~ p ~ die
o n to
s either the
ent or ~e~erator-re~ated
W ~ t ~loss
o ~oft genemlity all bilateral contracts consist ofthe fofbwing s
q ~ n t ~oft ye ~ e r g ytransfer
injection point and the c o ~ e s p o n zone

J,z : the w i ~ h ~ point

a w ~and
~ the c o ~ e ~ p o n d zone
enalty payment by generator i for generator~relatedcontin

e ~ a t purc~ased
in the spot market of zon

ovcr the p ~ r ~ ot dE T = it,, 4.

c ~ n g ~ s t ithe
~ nload
, is respons

ex ante for each time the tr

robability of be in^ c u ~ a ~ l ewith

d the upper bound g~venas ~~~.

In r e a l - ~ i ~oper~tion~
the ITG determi
relieve ~ a n ~ ~ i s con~estion
along with

s creates an a ~ a c t i v eincentive far

as long as the market can take it.
ss~on~ y s t as
e ~a subs~ntialeffort by the ITC is expected in order to i
T base for priority insurance service. The advantage of this method is tha
of the spot arke et^ which is under strict regulation, the
to take the ITCs profit is well capped, Over time, the sho
the spot market or bi~a~eral
trade is e x ~ e c ~ etodlev
meet the c ~ ~ g needs
i n ~of the market. The I
t tn mark~tevolution is likely to have a ~ e ~ a ~ v~e l y g level~
priority insurance service and to enjoy profits from b u s ~ e s
we discuss the effect of reduced r e g u l a t o ~unce
insurance services on transmiss~one x p ~ s i o n .


T r a ~ ~ ~ ~i s~ sp ia~n~s i ~ ~

The ~ e w
~ a r k eorg
e s c ~ ~ ~ate the
d ~ e g i ~ of
~ ~thn g
~ ~ n d a n ~ $s ~e t~a~l for
n g s ~ s t e m a t~i ~~ s r n ~ expansion.
s ~ o n This ta
~ s e dITG ~ c ~ r A
e .fo~ard-look in^ ~ a n s ~ s s i o n
S t
of its c u s ~ o ~ ebased
r on ~reuencyand r n a ~ i ~ of
its ~ a ~ ~ ~ ~system,
s s i o n
tools n e c e s s ~ yfor e
rovides a basis for su
e n ~ a ~ c and
e ~ ex~ ~ t
of these ~ n h ~ c e ~ e ~ t


elopment of new market tools for operating the ~ansm~ssion

s y s t e ~b
as the ITC moves into the active phase of m ~ a g e ~ e nInt this
~ phase
to make complex business decisions over a wide r a n ~ eof time scales: long-te
deal with ex~ansi
d to ~omputingthe i
c o ~ s ~ a i nand
t s makin~system reinforceme~tsin order to meet this
roposed ~ a n s ~ ~ s rate
s ~ odesign
that the i n v e s ~ e cost
~ ~ tis
on rent on the spot market owing to the
r i n v e s t ~ e ndecision
is required for the
Even when there is s ~ ~ i ~c oc na~ ~~s tti osustain
needed for relieving this congestion is
ing the performance of the ITC, since
rate lies wit^ the r e ~ i a t o and
r not the ITC. The a
ed prioriv insurance s

on the h i s t ~ ~ i c pa l a ~ ~ of
e ~users
ority insurance services
nt in a new efficie~tgen
t for i ~ p ~ e m e nbilateral
t ~ g rrad
The better the projection that the new market
the ITC makes and subs
The s h o ~ ~dec~sions
t e ~ deal with
the most ~ i f ~ task
c ufor
~ the
s on the ITC's ability to funct
three aspects to consider in the pr~cing.The first is ~ e ~ ~ i n g
s from the long-term m
is ei r n ~ o ~ in
~ nmaking
proj~ctiona the lo~ationaland temp~ral
n, Over time, the market f
the costs by ~ x ~ a ~ ~ l a t ~

s the vahation of insurance services given the s p e c ~ ~ c a t i o nasb~~f ~ a t ~ r a l

d in Section 5.3. The ITC has a menu o f p r
In this ~ o ~ u l a ~the
o nre~iability
is explic
i n ~ ~ ~ ~ p xq
t i by
o nthc
s ITC over the contra
valuation and may be solved us
spect of pricing is ~ e l a t i ~the
activities. Because the mount of
~ c t ~ bcl e, as
~ well as the rices at the spot ~ ~ kthere
e ~ ,


Transmission Qpen Access


e either set or ~egulatedin ac

~ r e a s o ~ ~ borI efair
q prooft ~ a r gabove
i ~ its cost.
r e ~ u to~ operate
r ~ in a manner that m i n ~ m i s ~odv ~ r a rl ~e v e ~ u ~


~ the ~~~~~~0~
to serve~was often
s m
concept was usually r e p ~ a c eby
~ g


Power System Restructuring and Deregulation


e ~ e ~indus~y
~ c i ~ n~ c o u r a ~ e
es not have to be part of a r e s ~ c ~ r i effort.
ng I
early 3990s several Western governments were
e rof ~ n n i n gthe power ~ n d u s t ~ ,
do a ~ e ~job
r e d u c t i ~in~ l a b o ~ rcould be achieved by p
ise rates and have a greater interest in e l i n ~ ~ power
lace i n e ~ ~ c ~ e n cIn~ eother
s . countries either Qwnersh~por
to cooperative or to p r i v a ~o~r ~ ~ ~ s a tori oto~new
s ~ types of
ions or ~uasi-gov~rn~ental
ts, ~ w n e r s hand
~ ~~nctionalre5
1 invo~~enient
of private capit
d as private sector p ~ ~ ~ c i p
ut b e c o ~ more
also a serious conb:
. Compe~i~on
breeds imov
ism. A competitive powe
use of new technologi
~ o n o ~ o sl cy h e ~ ewas unable to ~rovidei n c e n ~
tiva~ionto use new ideas and ~ e c ~ o l o g ~ e
ework. Lack of compe~~tion
also gave
in c~untriessuch as India and Chin
very low. A more b : o ~ ~ e r cethos
i a ~ could be h


~ n ~ ~ n d~~ ei nng e ~T ~~ at ni s~~ ~ihznd

~~s is^^^^^^^^

the variatio~sdis~ussedab
amms in certain respects: (I)
s e l e c t ~ oof~~ n e r sources,
cost r ~ s o u r ~to~others
with low capital and hi
econo~iesof scale or n ~ ~ monopo~y
r a ~ fea~res~
electric ~ o t e n are
t ~ not
~ ~an~ i ~ p ~ to~ ~ e n ~
clear e c o n Q ~ i eof~ scale, but there is a
ref fore some form ofregula
her unbundled into (a) a wires
ides facilities fox e l e ~ ~d c ~i ~ ~andi (b)v ~ ~ ~
lectric e n e r ~to end consu~ers,(3). The tr
in the ~ c o n o ~the
~ cgeographic
and the b c
~ h ~ r e f o must
r e ~ o n ~ to~ f~~u~ ei c ~asoan
n i n ~ e ~ r aand
t $ ~re
dion in the gen~rationand ret
mission system and ensure
e q ~ ~ t a bbasis
~ e to all power
~ ~ ~theofocus
~ ofe attention
field, and the rules for managing access by
~ ~ s ~ r i m This
i ~ acha~ter
t ~ ~ focuses
on this c
~ subject,

nal, state, provincial or independent generators coexist. In these cases the

~ e c h n i inte~e~ationshi~s
are murky and are in a process of rapid ev~lution.

rate and transfer BOT; {or build, operate and own) plant of
ing, ~ s u a ~ I~ya t ~ o n a~l , ~ ~ i t~i Ieayan
on in many f a s t - ~ ~ nsystems.
r a c~ ~e e~are~ eoften
e ~in force
~ as an economic incentive to investors.

n s i b i i i ~on the dis~butionside as in a ~ a ~ i t i o ns a ~

~ ~ r e g u l is
a t that
~ ~ Discos
may now be restrict
scos a d ~ ~ o ~ ~ l j ed~ ~~ nt sales
~ e~
e ~ o countries
p ~ ~ is~to sell to an ~nvestor~
or to coxp
em so that ~ ~ v e s ~ m for
e n t reinforceme~tcan be
o p ~ r ~ tprac~ices
i~g ~ m ~ ~ e ~ e ~ ~ e ~ .

netwo was state owned before r e s ~ ~ ~ o~ n g ,

Where the trans~~ssion
i n t ~ g will
r ~ ~be r ~ ~ n and
e d a d ~ s ~ i n e ~between
owner and operator is r
SA, f o ~ e er ~ e c ~ ~t c ~may
~ sell
i off
~ ~
their~ other
s assets
~ Q r n h~ basic
~ ~pr~mise
~ s ~o f open ~ a n s ~ ~ ~ ~ccess
s i o n i s that
t r a n s ~ i s s ~operat~rs
treat lalt users on a non-discriminato~basis i
use of services. This re~uirementcannot be ensured if transmission
y generation or supply. A requirement, therefore, is
at^^ to Q ~ e r athe
t ~t r ~ s ~ ~ ssystem,

markets are e s s ~ n ~ a lsl yh o ~ - t forward

serve toad and loads bid for the opportu
~ two ~ ~
s t i n ~c ~~~ k eday
~~ sahead
: ~
e ~ ~of s24~s ~~~ a r~adt se ~ u a ~~ ~i t~~ o n ~ ,
ansmission costs, constraint management or congestio
bidders may bid. as a single generator or as a ~ o ~ f ~ofl ~i oe n ~ ~hQwe~er,
~ t Q a~unit
; may
Iy one p
~ t h o ~ a~~hj d~ ~~~y
e r ~s
o ~b l ~~ i~ ~ ~ ~~ebids.~ ~
n there is conges~i5nthe CalPX sets a ~ a x ~ price
~ u m
and buyers may su
rnand bids for ~ Q n - c ~ i loads;
~ a b ~ ~
auction ~ o ~ a single
d ~i c ~ ~
~ a ~ ~This
e g occas~on
p r o v i ~ ~a sc ~ ~ ~ ~ t i t i ~ ~
ta adjust their day~aheadsched~Iesin the lig
s ~ ~load~forecasts
- ~md ~unit status.
~ n

as well as the o ~ i ~ r s h
la the new ~


Transmission Open Access

1 the new ~ a d i n g ~ c ~ rinto

e s a few alte

ion system is ~ ~ n ~ a ~ l y

T r a ~ s ~ i s s ~Open
o n Access

ower System Restruc


ostage stamp ra~e,and ~ h e are

~ e no i ~ ~ e ~charges
~ ~ ~if npower
a l is ~
in the ~ n g e s ~ zone
e d when con
E" usem to sei1 or buy
~~~~sare a d j ~ ~ ~ b

the flow ~
a in a ~
n e ~e owill
r ~ de
s a c ~ o at
~ sv
~ times
cb line I;a meet the
n, the load of tine j

For each transaction, the rel~ab~Iity

of ~ ~ ~ s m i swith
s ~ oalln lines
but linej in $ e ~ ~ care
e , first calculate^. The r e ~ i a b i bl ~e n~e ~RJ:Ti
~ a n ~ c T,
~ ~isoc~lculated
as the i n ~ r c ~ e in
n t ~ a n s ~ fai~ure
~ ~ i o ~
a ~ s e n of
c ~the line. Similar ~ r o ~ ~ ~ are
~ ~c ia t~i ce~s ~ina respect
te~ o
ect to line j . The e ~ b e d d e dcost of the ~ r ~ s r n i s line
s ~ jo, ~all
based on ~eliabilityb e n e ~ oniy
~ s is now d e ~ n e das:

where P, is rRe m a ~ n i ~ od fe~ n s a c ~ ~ oand

n E;. is the same as in (6.1).The s ~ e c i ~ c
is in itself not c e n ~ ato~this
r n e ~ ~ oused
d to c o ~ p u t ep r o ~ a b i l of
i ~ ~ansaction
ction may simply be taken as
example, the failure probability o f
ility that a path will not exist from the t r ~ s a ~ ~si eo~nd ~ n
This ~ ~ p r o a ctoh failure c ~ l c u l a t iis~ ~r e a ~ ~ l ~
ut becomes c o m ~ ~ ~ c aand
t e d v i ~ a l unworkable
e ~ ~ r circuits,
~ e d a cut set eth hod [Is] or B ~ o ~ d ~ prt ~ o ~ a ~
le for ca~culat~ng
this a v a ~ l a b ~ ~ i ~ .

efits in a ratio which has to

on the j u ~ ~ e m eofn the
~ ~ ~ ~ s r np i~ as n~n ~~r ,~ n
specified e x ~ ~ e n ~ and
u ~depends
ace, the c o r n ~ o charge
~ ~ e is set at


It ~ ~ ubel dnoted that e ~ b ~ ~ ~d ae ~d ~ ~ costs

i s s iRave
o ~ to ~ n c ~ u d~ea c ~ ~ isue
ers, ~ ~ s ~ a tei o~ nu i p m switch
~ ~ t ~ear and shun~eriesc acitors in additio~to
~ a n s ~ i s s i olines
n and cables.
and d~~ferent
m ~ ~ ~ rno d s

us^^ ~ i f ~ e r ern nt ~ t h hence,


ewices, as i o the case in s

d with time of use, g ~ o g ~ p h ~uantj~ative
~ c ~ ~ , and customers ~ c ~v ~i ~~a ct i o in
n s~ ~ n d .

rovide~f17] in this
A brief ~ ~ s of the
c ~ansm~ssion
~ ~ ~p r ~~c ~ nin~
g the nNCC,
to cover the costs of its assets but the ~ o s t sof
The NCC i s altow
is the price quoted by e nlo~e ~ p ~ n s ~ ~
dis~atchduring each half-hourly time slot w ~ e n
generator which is ac
- simple u n c o ~ s t r a ~ e
~ load p~ r o b~ a ~ ~i ~ ~ ~~ 9 ~
is c a ~ c ~ i l aby
t ~ cd o ~ n ~ ~eixn~ge c t ~d d e ~ with
~ the
d c a ~ a expected
c ~ ~ to be a
order to encourage capcity offers from generators the pool purchase pmce
y w ~ IF
~ by a u~g ~ e n ~t ~ nSg ~ with ~this ~ ~e ~ b ad b ~ ~ ~ t ~verage.
s ~ e n~ ~ ~is~a alseady
t o ~ s e tl e ~ ~ ~eind the u ~ c o ~ s ~~ i as ~ anbut
t ~c preve
enerating owing to u ~ n ~ i s sconstraints
or other factors the generator
, This p a ~ e n consists
o f the ~ ~ ~ ~ $ s e n c e
n compe~lsato~

hand, same ~ ~ c o n goe n~e r~a ~cowho

~ are n
called u ~ o nto g ~ ~ ~~swa ~~to
n eg~ a n s r n i $ ~ ~ o
bid price, which is h~gherthan the puev
. This is, e~ect~vely,
of-merit g e ~ e ~ a t o~pera~ion.
ts, out-of-merit paym
ges, ~ ~ n s ~ i losses,
s ~ ~start
o nup ~ ~ s ~ s
and ancillary sewices c~argesare passed on to c o n s ~ ~in~ the
e ~~~~~.
The ~ ~ s t o m side
e u of the market is simpler: a11 energy is puscha$ed at the pool selling
SP), All of the extra costs of energy above the PPP are simply 1
EzjY and s
~ oversall ~
~ is by
~ ~ u s t o t~ e~ ~o~the
~ calcar.
g ~
h a l ~ - ~coo ~ s~ul ~~e r ~ c e ~

~ ~ c t in^^
l y
t ~ e ~ e ~the
o ~PSP
e , is fixed on a r e v e n ~r ~e ~c o ~ ~ basis;
~ ~ t~~ a is,
t~ Po ~
the e l e c ~ sold
~ c is~ made
~ equal to payment to generators p ~ other
~ s 60
ce, the costs o ~ t r ~ s m i s slosses
i o ~ ~are also rolled into

poiiy p o ~ ~albeit
~ o ~regu~a~ed,
ta ~ r o v i ~aaequat~
srnission access are
~ o ~ s ~ ~Fur
e rthis
s . ~eaonmd since average ~ 1 ~ ~ c a t of
~ Qupl
~h~~~~to d ~ ~ users,
e ~ ~ 11%
n been
~ the prima^ focus of con
share the costs of o ~ e ~ a the
t ~ system
and bear not
but an ~ ~ e ofr the~ OS&
g ~i n c ~ by
~ aall
r is ~ ~ - e these
x ~r o b~ l ~~and
~ s ~r ~ n~ ~~ n t ~ y

T~ansmissionOpen Access

is ap~roachcan work in a market s ~ c where

~ ethe organ~sa~on
e for pro cur in^ a n ~ i l l aservices
is also respoxisible for opera~~ng
the e n e r ~
amples of this include New Zealand and New England.
llary s e ~ ~ c separate
from the energy m ~ ~ eist ,b ~ ~ e r
n l ~ s ~ ~~ ~cwhere
t ~ the
~ IS0
s is se~aratefrom the PX, as is the case i
c services
i which~the ~ a ~
l ~ f o r nIS0
i~a is responsible for p r Q c ~ ~ incl
inning reserves, AGC, replacement reserves, voltage supp
start. The first four services can be procured by the ESQ through d
to ~ a n d a ~or # ~
or be s e ~ ~ - ~ r o by
~ i ~users,
e d ~ ~ w e s~lf~provision
~ e r ~
is li
c o ~ ~ c~ ~~ na gl e m kThe
e ~use
~ ~ofall. anci~~ary
services, incfud
the exclus~ver e s p o n s ~ b of
~ ~the
i ~ TSQ. ~ l a c k ~ capabili~
and reac
must be provided or purchased by tbe ISO.
In some e ~ e c ~ markets,
c ~ t ~ both the mandatory and m a r k e ~ ~ b a ~approach~s
. For e ~ ~ ~in Spain,
l e , the ~ Q ~ c a~ ~ l e ~~ reserves~
~ service
ism~ ~a ~for
~ ~ ~
rs, All plant must be ~ ~ u i with
p p a ~governor
and there is no r ~ ~ ~ e r ~
of frequency deviations ~ ~ ~o~n g
associated. This is intended to reduce
e the required primary r e s e it~ m~ ~ s t
power i ~ ~ a ~ a n cIfeas generator
procure~entof AGC service is
from other ge~~era~ors.
On the othke
o ~ a ~ c t~m
~ o~n ~ p~ e t ~ ~

~ o n g e s ~ i o[21]
n is not a new prob~emin power s y ~ o~p ~e r ~~ t ~and
o n was a r o ~ t ~ e
for the ~ y t eo ~p e r a ~ oin
~ the t r a d i ~ o nsystem.
e n v ~ r o ~ ~ ehowever,
n ~ s , pre~~ously
established practices for dea~ingw
no longer be relied on since coo~erationbetween market p ~ i ~ i pcannot
~ t s be ~ a ~ n ~ e e d .
Any control ~ e a s u r e sadopted by the system o~eratorta eliminate c o n g ~ s t i omust
~ not
ody be t e c ~ ~ ~u s ~t ~a~ but
a~ b also
1 ~~be
~ fair to users and c o ~ e r c~ia n~ s ~p ~ ~
some e ~ ~ ~markets
i c with
i ~bilateral and multi~a~era~
c o n ~ a c~t ~ s ~ c t ithis
o nps ~ o b is~ e ~
more d ~ f ~ c utol tsolve since these contract transactions introduce additional c~nstra~nts
the system o ~ e ~ t o For
r . example, c u ~ a i l ~of~ an ~~ilateral ~ ~ s a c t i o~equires
s i ~ u l ~ e o and
u s equal reduction at the entry and exit points, All this makes CO
~ a n a ~ e ~ae ~nhta l l e n g ~p ~r ol ~b ~ eand
~ ~equiresa comb~ationof ~
o pri ~
o p ~ ~ ~ respo~se$.
o n a ~ It i s perhaps the t h o r n ~issue
~ ~ t in t r ~ ~ ~ i sope~ation.

Boot md c o ~ ~ amodels
are s e ~ ~ r a t addressed
first and an app~oachto reconcile h t h
ma~agement issues without C o n s ~ d e ~ ~ tof
models i s then explored. Conges~i~n
c o ~ ~ n g e n c y / s e c uproblems
are discussed in this subsection. A fbller ~ e a ~ ofe n ~
topics can be found in [22],
tion given beIow assumes ~ ~ c e - b a s edispatch
built on spot p
~ theory
[I I] and in its simplest terms, ~ e g l e c t i nprice
~ elasticity effects md the signific
location, the dispatch a ~ g omay
~ be
t ~stated
~ as:

subject to:

ere i andj are the set of ~ r o d ~ cand


c G and
~ D atheir ~
~ ~s~ e ~n es r ~ ~ ~~
c o n s u ~ ~ and
~ ~ ~ o rn ~o offer
~ (bid)
~ cprise
~ and ~ ~ r c h~a s ~e ~ un t ~~ ~~ i ~~
we g~venby C and B, respectively. Tltc single load balance constraint will later be
~ e ~ ~ ~ a ltoi sa eset
d of a ~ g ~ ~ nload
t e dflow equations. L is a ~ ~ s m i s s loss
~ o n~ ~ ~ t i o n , g ~ n ~ a tioer a ~ and
a 2,
~ the
~ ktfi
~ o~erat~ng
c o ~ s ~ ~~ n~t .o b(6.2)
l e leads
~ to the
s o l u t ~ and
o ~ ~ ~ ~ ~e o n- d ~Tt i o~~ ~ :c ~ e ~


af y ~ i a bon
l ~the c
nt above is the $tipu~ation
ty. The demand-price elasticity issue, which was

I [25-271 is d e s i g ~ ~ aas
t e power
~ i ~in ~a s a t ~
b ~ l ~ and
~ emultilateral
~ a ~ ~ a n s ~ i s s i oc no ~ ~A cbilateral
~ . ~~sastion
Disco pair while a m ~ l ~ i ~transaction
a t e ~ ~ ~is 2ibp extens
s, such as broken or ~ o ~ a K
CO d
~ a ~ s ~ be
~ ~
~ o I nf there is no con
d i s ~ a t c h all
~ s r e q ~ e ~ansactions
s ~ ~ ~ and makes

Transmission Open Access


~ ~ o ~ ~ t a ~ ~~ n ~
. ~ o ~ s i ad p~ or ~ system
~ r
n r e s e ~ ~ford
1 is
ission losses. (There
ISQ pur~hasespower to
ed with any one or
my aenG0 and Disc


subject ta:

z' E I,; i f

i s the desired or target YaIue of

a u g ~ e n ~ eby
d a set of contracted tram
~ n e ~ ~ a lci toyn s ~ i ~ in
t s (6.4) are an extension of the
c o n s ~ ~ ~augmented
by additional inequalities for the up
led e~amplesof the method with d ~ ~ fc eu r~ ~a i~~ ~e n ~
ewed as a p o i ~ t - t o - ~ otransfer
~ n ~ s ~ ~to a~b iil a lt e ~ont
~ tract^

is the total number of bilatera~muitilat~r~i

~ ~ s a c t and
~ o ~Tks the Mh

bifaterallmultilaterl t ~ n s a c ~ i o nPpL,i
, and


are bus i pool g e n ~ a t ~ and

o n bus j pool

~ o n s u ~ p t ~ro~n~, ~ e c t iPT.,
v ~ land
~ . BTkJare, r ~ ~ ~ c ~power
i v e~~~ yj e~c tat
i obus
~ i Etnd
owe^ ~

~at bas
~ j ~nu er
~ ~ ai ~ soa c t~iTk
~,n PLT,
,; is

pa~icipantsto make good transmissio~
Section 6.6.4).
In actual ope~a~ion
of power systems the ~esponsibili~
d ~ s t r i ~between
u ~ ~ ~ all dispatched ~ansactions. Twa
~d~~~~~ in [29] but for s i m ~ ~oni ~ i ~
by pool ~ ~ nis c ~~ ~ s~ ~ dhere,
t e r ~~ d o ~


idG; kE

and the IS0 will dispatch pool power to make good t r ~ s ~ ~ slosses,
s i o ~kncludin

Transmission Open Access

:The n o ~ condi~ion
a ~
is when all pool demand and all bila
ns me dispatched without system security violations.
~ a n s ~ c t ~will
o n sbe s ~ ~at ~ ircdes~red
e ~ value and the ISSO only ~ i e e to
~ sop
~ i s ~ aand
t ~ ah ~ ~ ice^.
~ l ~ ceaa s ~~ ~ g~~ to ~ dy ~ ~a d~ ~eOPF
~ ~o~ n0 1~ ~

subject to:



o vector
~ with~typical
~ element
~ pppL,i
,which is the

is a c


0 ~ ~ :

and bid price for this pool power;

i s a vector of

pool powers with e ~ e ~ ePPLI


~ v ~ na b ~of
~e sthis~p ~~ ~ ~~ ~ e ~ ;
values of pool ~ o n s ~ n ~ and
~ ~ ibilaterailm
arrd e x ~ ~ c ~ i~~h
tors o f r e a ~ t ~ ~o e~ a l
elements DpL,i, Pq ,i and ,?Iq
,j , respectively~
~ e a ~ ~ and
~ ~~~e~~
~ e sr~s~ectiyely.
The ftrst ~ o ~ s ~ ~ n t
~ ~ w ebus
r, v o l ~m
(6.6) is the c o n v e ~ t i o ~load
a ~ flow equation set plus the set of n o ~ power
second c o n $ ~ a i nis~a set o f ineq~lities,incl~idinglimits on pool p~~~~ an
rating cons^^^^ such as bus voltage levels and line overloads.

we the c

~ ~ s a c t i in
o ~full
s would result in the violat~onof operational cons~a~nts.
The f o ~ l ~ w i ~
dispatch ~ r o b is~now
e ~f ~ ~ u i a ~ e d :

subject to:


e first tern, within brackets, in the above objective r$pres~ntsthe net pool w ~ ~ f a r ~
,the ~ a ~ s m i s charge
s ~ o ~for d e ~ ~ v PTkj
e r;
~ ~

pPTis a columi vector of elements

yo,, i s a c

~ vector
~ of e~I e ~ ~nn t s ~

~ e s ~value
r e ~of



. ~ ~ L ,where
i ~

woPLJ is a w ~ l ~ i n ~ ~ ~ s ~

- D P L J ) ,the pool customer shortfall, w h ~ D~ &e j

and s a t i s ~ ~DPL,]
s 5 B& ; y4. is a c
wher~ whs

i s the

o v ~ ~~ of~ e~
o ~r e ~~ ~ ~

is also a willingness-to~pa~factor



and satisfies F$;,,! 5 P;


It is worth mentioning that willin~ess"to-payfactors, which have been ~ n ~ 5 d u c eind

the above c o n ~ a cmodel
a ~ ~ ~ m the
~ interests
o d a of~ ~
of and bila~erallmulsitaterd
c ~~~~n~
~ cpo ~ g~e s t ~~That
~ n . is, any p ~ ~ ~ ~ j ~bea w
n ~t l ~ i ntog make ex^^
ato avoid
~ c u ~ ~~ ~ m eThis
n~ t .a ~ ~
a ~ g ehas
t ~ to
e ~bet ~ g r e with
e ~ the IS0 in a d v ~ c e
and the 1S0 will d e t e ~ i m
~ ~e g n i ~ d for
e s the w i l l ~ ~ e s s - tay
o ~factors in order to ration
~ a n s ~ ~ s saccess
i o n accordingly.
The first c o n s ~ in~ rob^^^
(6.7) is ~
~to the~ 5rst ~
in ~ a~ ~but6r with
) 9

,r ~ s ~ ~ ~The
t ~second
v ~ c~ oy .~ ~in~(6.7)
~ n t
b a ~ a equations
ntract model. Th
~ ~ ~ c ~ pina advance.
The i
~ ~ t e ~ of
s ~the
o in n e ~ u a ~~ xi ~p r e s ~in~(6.6),
~ n obtai

die c o ~ ~ e s ~ ~i o~n ~ a g e problem

~ $ n tin d ~ ~ e g u l power
a ~ e ~ systems whic
pool and ~ o n ~ at cr ~t ~ a c t i o n s ~





The e bus system o f Figure 6.9 is used here to ~ l ~ u sthe

~ airat ~
discussed above. For simplicity only the i
actor is examined. ~ y s t data
e ~ inc~~d
found in the A p ~ ~ n d ~ x ~
e g ~ ~ ~ rat abuses
t ~ 1r and
~ 2 bid into the pool and the 80
51 at pool prices. The 200
load at bus 4 is ~ i ~ into
~ two
d ~ d
ne-half takes power from the pool and the other enters into a
g e n e ~ a t at
~ rbus 3. The re~uitsof a pow
buses 4 and S are c o ~ ~ ~ e~~~e pl yp l ~ e ~
fuft, line 2-5 it; ~ ~ e r ~ o ~~ ~ ehd . ~
od of ~ r o b l (6.7).
e ~ The s o ~ u ~ o in
n sw~ ~ i c ~
wit hi^ ~
~are giv$n
~ ini Table~ 6.1. 9

Example system

Case 1 ~ s u ~~e ~ i n ~ i e s s - tfactors

o - ~ aof~the pool d
e at b ~
same as that of the ~ ~ ~ a~t ne s~~ afrom
e ~r 3 to 4? namely 20 $1
~ ~ ~ - actors
~ o of
- ~all apool
~ ~ e n ~ we
~ d~ so u b while
unchanged. As expected, the pool d ~ ~ a n at
d buses 4 m d 5
case 2 ~ h a ncase I and the bilateral transfer from 3 to 4 was curta
consumers were willing to pay more.

Pool ~ e n ~ r a ~at~bus
o n1
Pool generation at bus 2
Pool demand at bus 4
Pool demand at bus 5
Transfer from bus 3 to 4




95.2 1'


75.2 1'
94.3 -k


The ~ e ~ a ~~ o ~~i
~ entsvand w~ ~ ~ ~e i n ~~~ sr s -n t oa - ~~ ~ ~ ~ ~
i 6.10gis ~ b~t a i n~eas~
t ~ ~
i n ~ ~ s ~ - t of
o the
- ~ ba ~i ~ a transfer
varied fiom 0.0 to 60.0 $ /MW2 h In 10 $ /MW2 h steps while other factors are r e t ~ the
n ~ ~
same as case 1.
The n o n - l i ~ ~curve
a r in Figure 6.10 shows that the more the w i ~ I i n ~ ~ s ~ - t ~the
- pless
the c ~ ~ ~ ~andr that
n e when
~ t it becomes larger the bilateral transfer tends to tb
. It is i m ~ and~ ~ ing
t to ~ ~ ~ h athat
~ e
Iment of its own ~ s a c t ~
i ~ ~~ m
r ~e u~on
e the
~ ~~ e
~of other loads
i and ~ aln s ~ c t i ~ R
~ s.










W ~I iI ~ ~ ~ s s - ~( o -~~ a ~y






Static $ ~ c u ~ i ~ - c o ~ ~ t ~ ~ i ~ ~ d

doIogy E301 to reschedu~epool and b i ~ a ~ e~ansact~ons

t inp: account of s y s ~ e ~
which may be helpful in ~ ~ o v i d i nang insight into the security c ~ a l I e ~faced
~ e s by
the context of system der~gulatio~
i s l resented next.

[3 1,321 is the ~ r e v e n ~ ~ v ~
~ a ~ g e r oop~es~ a t ~c on ~~~ i t i o and
n s b~inginga w
state. This is an ~
d t5 on-line
c~ ~ o n~u~ g Qand
r~ n GO
g ~
i m ~ ~ ~ eonly
n twhen
e ~ the s y s t e ~
is found to be in a ~ ~ n e r a state.
It is r e c o ~ ~ s from
e d [33] that transaction o ~ ~ - c ~ n t ~c~o~~ e cn~ci cyv ae p a b ~will
l ~ ~be
~ e l p f5r
~ le l ~ ~ a t i cn og ~ s ~ a~i no ~~ a tBoth
~ o ~~ o. ~ t - c o ~ ~ ~~ n~ ~ ~~ necontrol
c cy t md
~ v ~
p r e ~ e n t control
~ ~ e are, therefo~,taken into accoun~here.
The aim o f the method is to m i n ~ ~ i sd e v ~ a ~ ~ ofrom
n s ~ a n s ~ s~c ih ~e ~n uw ~h ~ ~~ e
es to enswe s~~~~
tive and ~ ~ s t - c Q n ~ n gcorrce;ctive
for the case ofpre~entivec
~ i ~ on
~ the o~ s ~ u ~ ~ t ~ o n
d ~ l e d~~~ s a c ~ is
i o the
n most
c ~ ~ control,
e ~the ~conisidertition
~ ~ $is to reduce benefit loss of the ~ e v i o ~ s$ ~c yl ~ e ~ ~ ~
~ ~ s ~ cwhen
~ i ao~ on ~~t ~ g e on c yc ~ .

to the case where the
may be out o f sus
der ~ i i ~ e ~ con
o ~ t ons
~ ~ and
e deals wi
o f pool ~ ~ ~ randa demand
t i ~ as~well as bilateral transactions. A new
nota~ionis i ~ ~ o d here.
~ ~ e d




and AFT{ we: ~ r e ~ e nc~~ ia~n e~ine s~ a ~ ~ .PG~

~ c ~ ~ o n
where QG,,
pool to ~ u s t o sales
~ e ~~ a n s a c t ~ oPDi
n md b~latera~
~ ~ s a c PE,
~ ~ resp
o n
and NT are the total ~ ~ ~ o fbt r ~e~ s~a c ~si o nf the
pGi and pw are ~

a prices rof pool~~ ~ s ~ a cPGi

t~ ~ ~ ~~

~ ~ ~ eprice
~ i en f ~o ~ta tsi ~innrespect of bilateral transacti
The Q ~ j e c ~ i~v e~ c t i for
o nthe klh line-outage con~i~gency
is taken to be:




the ~

~ pcj,
~ p&
c armd~ pTi$ U1
s u b ~ i~t i f f e prices
~ e ~ for
~ n o ~ states
a ~ and for con~ingen~
c o n ~ i ~ 5 depen
aversion to occasional s h ~ ~ ~ i ~n tie ~
mp et i o n or
s c~ai~ments.
ltiple o b ~ e c ~ ~ v~e h e dprobliern
~ l ~isnnow
~ f o ~ u l aast folfows:


Min F = W O.Fo f

where "0 is a weight attached to PO and satisfies

pdce at bus m (the calculation of pool price i s outside the scope of this c
[233/); 2) pTj,nis set equal to pTj,m
plus the ~ a n 5 ~ ~ price
5 i oof~ later^^ ~ ~ a c Pn~, ~ o
The prices p;f under ~on~ingency
can be obtained in a simiiar way to pR.
~~~~~$~ ~reventiveand pos~-c~n~ing~ncy
onse~ationof power in the pool, A s s ~ that
~ ~only
~ transact
~ g
ide system regulation the associated generatQrbus can be ch
to say, the slack bus power a ~ j u s ~ emust
n t balance the c h ~ g e in
s ~
and load power with due regard for ~ ~ s ~ i fosses.
s A
~ linear
Q ~ pool power b a ~ ~ c e
equ~tionin the or^^^ state can then be written as

where rGi, rDi and rn are sensitivities o ~ ~ a n s a c ~PO,

~@o. nI),
~ PDi and BTi with ~ ~ ~ ~ e

to slack bus power

in the n
~ state.~
any ~
Q contingency
a d~~ i t i o nAteratio
~~ ~
y ~os~~con~~
c oe~nec~yt i Q nthe
linear power b a ~ ~ cequatiQ~
~can be witten
~ as

w: The flow of power in a line c

since c u ~ ~c r ai ~~ be
o allo


0 2 1; I
~ I

~ I E, ~ ~ ~ z

The c h ~ of~linee flow

~ in the normal state ~ ~ u~s t ~

where sGj,sni and sTI are sensitivities of the c o ~ e ~ p o ~n rda ~n ~

s ~~~ to
~ ~theQsn q ~ of~ e
the c ~ ~ in~line
e Enin ~the normal state.

Transmission Open Access

Similarly, the changes of line flow under contingencies must satisfy

2 0 ~

Power System R e s ~ c t ~ and

n gD ~ ~ ~ l a ~ i o n

as a h e out^^^^ could c a ~ s generator

to lose ~ ~ c ~ rthen
~ the
n o~ s ~ ,
reventiive action to modify the operating state, Hence, d y n ~ se
~ c
in the context of both pool and lateral dispa~chis also a very i ~ p o ~ a n t
An erati tin^ state can be ~ ~ d in~many
~ ~e ~ fdf e r e ways,
and the operator
~ h ~ the
o a~tion
~ e which will not only ensure s ~ s t e ms
e q ~ in an
~ a ~~e n - ~a ~ cenviron~ent.
e~s s ~ ~ A ~~ r ~ s~i eener
described in this section. The TEF is a Lyapunov-like huncti
oint (UEP) or a particular fault is the most c
~ pointt on ~
state spase of generator angles. The transient energy m ~ g i (TE
d i ~ ~ r e between
n ~ e the ~ n energy
~ ~of ~the tsys
~ of ~s ~ c~ u~ ~~ and
t~n its
~ value
n g at the ~ o n ~ r o UEP,
l ~ ~ %e
~ o ~ e s ~ oto~ the
~ dfind
i n p~~~-disturbance
system and t o ~ l o ~ ,
the tran~~ent
energy is less than the potential energy Cone
the system possesses transient stability for the fault in que
The chief a ~ a c ~ i aofn a TEN method Is that it lends itself very ~ o n v e ~ e n t tloy a
s e n s i t i ~ ~ ~ - b~a s~e ~p r [34].
o ~The
c ~sensitivities~ ~ ~ r ~~ a ~t e~ s ~are ithe~c ~h ~ af~n ~c s
EM with r e s ~ e to
~ t ~ ~ d ~ g ve ~ i e d~ a~~
t a o~~ w~0~ r ~ In the~ eve ~
d i s ~ a t cc ~o n ~ ~ u r a posesses
d ~ ~ a security
~ i c riskscs,the most
available to the IS0 is to ~ ~ d ~ generator
~ a power
~ ~ houtputs so as
~ e ~ s~ i~ tf o~ ~~provi~es
a ~~ o~ na clear signal o f the most
he~e,The a ~ p d e~s c ~
o b ehere
~~ ~is to use the sensi
pe in ~enera~ion
from critical generators to non-c~tica~
genera to^.
-based methods we available, ine~~iding
ethod [XI, the c o n ~ o l ~ i nugn s ~ b l eequ
~ e t h can
~ ~
be sused to ~ o ~ pthe
u UEP,
t ~ and thw EM
and the s~~sitivities
can be obtained then. A eth hod E39
c Q ~ ~ ar ~ s~c he edd u l ~isn ~resented next in which the
~ o s s ~ ~many
s e ~ v ~ n ~[40].
a ~ e s



= ~echanicalpower input
= dr~vingpoint c o n d u c ~ c e

y s

@cr ' m8ys

consta~tv o l ~ behind
~ e direct axis transient reactance

of the critical generators and the r e m a ~ n i ~gene~a~ors,

= speed o f inertial centres of the critical generators and the r e ~ ~ n i n g
generators, respectively, at the instant when the fault is cleare
= inertia constants

~ u p e r ~ c rpr'i pstands
for tbe values of variables in the final post-fault system confi~ration.
The a p ~ r o x i ~contro~~ing
unstable e q u i l i b r ~point
~ ~ (8') is c a ~ ~ u ~ ausing
ted a
method which is used as s ~ r t ioint
~ ~for solving the post-fault system equ
~ e r i v a t ~ ofthese
results can be found in [42$

where AEM = Eit4""" - EM'. The sign of qi-+j~ n ~ ~ cthe

a ~direction
in which g e n ~ ~ ~
is tar be s
~ to en~ance
~ the eEM. The
~ m a g n i ~ ~ofe s e n s ~ t ci o~ ~~ e ~ ~ o ~ d i n
change in the ~enerationfrom the most a d v ~ critical
c ~ generator to tbe least
ilical) ~ ~ ~ e ~will
a tbeo high
r ~ and, hence, the best c~ndidatefor the ~ ~ c h e d u ~ ~ ~ l g
er ~ ~ ~ e ~of tthei ~a r ni t i c aand
~ ~ o n ~ c r ~ t i~enerators
~ ~ o ube
l dset as

Transmission O ~ Access
~ n

a, ~ h o o s e;a contingency from the given set.

btain the optima^ dispatch using equation (6.2) (enskng post-fault system static
of this p ~ o b l e ~ ) .
corre~ondingEM (eq~ation(6.23)).
d. If EM is positive, then go to step a and select the next c o n ~ i n g e ~Ifc ~ .
go to step e.
ute the n u m e ~ ~sens~t;vities,
qiY9for the set o f system g
dicussed above. For computation of new energy margin for ch
g e n e ~ t ~ ofrom
n ~eneratori toj, the base loading 6r has been used
to get the new UEP c o ~ e s p o n d i nto~the change in the gen~ation.It is fa
rbatiQnin power gives the best result.
als; c o ~ p u t ethe c o n s ~ ~ n ton
the sens~~~vities
by m ~ k e tprice
the ~ ~ n e r a t in
o ~pairs
s a
g If all critical contin encies we tested, then stop, Otherwise:go to step a.
~ e ~ i l nu~erical
s ~ d i reveal
~ that:
f cr~~ica~non-cri~cal
generator buses is r e d u c e ~ i n ~ r e as ei g~ n ; ~ c ~ ~ l y

~ y n a msec~rity
~ ~ incre~sesspot prices at the buyers bus but the ~ n c r e ~ si se not
e p r e s ~ c of
e b~latera~

than discused s

er increases the spot prices at the

systems become more

11 entail a more comple
S S U ~ Sin relation to con

d price e i a s ~ i issue
c ~ ~ [23,2
oraneo~sprice but also
ral price d e p e n d ~ ~ of
ory and is central to pool d ~ s ~ a t cThe
h . fo
of elasticity are ~ ~ ~ o d u c e ~ :

the conve:ntio~~~
price elasticity o f demand and
e ~ ~ sof~ d ~ mc a in The
~~ . a ~ ~ i t i o nsubsc~pt
j on e


Power System Resestructuring and

elasticity and the pool demand, denotes each p ~ c h a sepa~ately~

p t is an e ~ e m oe f~a ~
me-dependent price vector p (for e x ~ 24~~0~~~
~ ~podep r i c ~ ) .
The follow~n~
~ u ~ ~ ~ T u conditions
c k e r can be d e ~ from
~ ethe~pool

where: C md C me ~ r ~ offer
d price
~ cand~power
sets of matrices of dual variables, at: time b, on the set of


- Eet r., G$r.2




)* * 9


where J i s the n ~ ~o f~poole loads

r (load busbars).
The ~ ~ s p a t c~hr o ~ ~ dwould
u r e begin with a fore~asEof the d ~ y sprices, say a%halfh~~~~~~ n ~and~the c~ ~a ~ ~ expecte~
, ~ setoof ~~~~d
~ d ~~e c t~oThe
~ . s ~ ~of the
~ t ~
lem as well as (6.25) will provide an a I t ~ ~ a ~ set
i v eof
rchatxaser expec~tio~s,
If these match the
m i s solved. Tf they do nrot, the exp
Qusing the
~ eiat~~~ties
in~(6.24) and
~ the p~ ~ ~ ec v i~a t ~ o ~
ain. The p ~ o c e is~ repeated
~ ~ e till c~nver~ence
o b ~ ~ i ~ ~ ~
p r ~ ~ ~ d are
~ K~r er o ~ini[23].
~ e ~

Transmission Open Access

under a normal cQndi~~on

is d e ~ e ~byi defini
~ ~ d a La~rangianA and fin
its derivativ~with res ect Eo all the v ~ a b l e s :

is the matrix whose elements are s e n s ~ refations

~ ~ v ~ ~~ e ~ e e n
and when ~ ~ r ~ ~3 ~e 8for
~ a~nset o
f i n c r e ~ e transactions
A ,this also satis~es
where the e ~ e ~of~vector
~ t s
er than or eqml to zero, whose values
d ~ p ~ on
n d the state A. Inequ
dition that an ~ d ~ t~ i ~o s~ ~set ~~ t
AT as^^ at state for the next interval, is in a feasible d i ~ e c t ~ ~ n . nce E257
~ ~ ~ andv ~ ~e t [QJ~~ theo~ ~ n~ i linear
~ ~ ca ~~

subset o Z ( A ) of constraints in state A , w ich are on limit, If


The e ~ a ~ ~~ ~~ Isee~t ~e s ~~ dhere

e r eis~&-ke same as Figure 6.9
line 2-3 now has its square o f the
set shown as ~ ~ x e d + A d ~ i t
W at bus 5 is
Genco at bus 3, for c o ~ ~ ~ rreasons,
c ~ a l is ~ e s ~ Q ~ s for
i b l sup
~ e ~ r e s e by
~ ~~ansaction
TA (78 MW initially fiom bus 3 to 5),
atch. How ~ o o ~ ~ n a ~t ~ o n e ~ a~ r p ~ ~~a t ~~

~ n ~

Power System ~


s ~ ~ ~ ~a ~~ e c~c i~~s ~t a lis~ now

yc h i ~ ~ u s ~ aThe
~ e de .x ~ s pool
~ ~ ~n ~e ~ a n
and the ~ i ~ a ~~ansaction
e r a ~ fkom 3 to 4 are given oricy in the fWo
they are ~
s to have
~ ~ b ~u i prior
n e~~~
~ the ISO.

us 3 Genco s u ~ ~ the
~ ~~eds i t ~ ~ er
n a ~ TA alone md only bus I i s
~r e ~ i~ s pna ~to
c ~hmake
e ~ l up the
~ ~ ~ ~ s ~losses
~ c~ ~s ~by
~ sthe
oe d~n
3 ~ e n c o~ v ~ t bus
e $ 2 Genco to join in the ~ran~ction
r making good extra lasses.
~ e is w
n ~ ~ not
~ ~only
n gto ~ o o ~ d ~wn ~ t e s 2 ~ e ~ but
c odso to
pool ~ ~ ~ s a c~~~~o ou the
ng shISO.
ispatch results of cases 1-3 are given in Table 6.2, Case 1 is the *nomase md new ~ ~ s a T",
c which
~ ~ i so~ i~i a ~ e(r far~Qbus
~ 3 tdlt 5) in
is h
~ c u~ ~ ~Case
~ ~ ~2yshows
e ~ c. o Q ~ d i n a twitbin
~ o ~ ~ ~ s ~Td,~w~~~~
t i ~ oo w~
~ u l t i l a ~ ~since
r a l both t r a ~3 and 2 supply the ex
s 5. Since the l o a d ~ ~ g
s ~ n s i t of
~ vline
~ ~2-3 with respect to the ~ a ~ s ffrom
the ~ e ~ $with
i r~e ~ ip e~cto~ the
~ ~~ s ~EFom
e 3r to 5 is
~ some ~ o o r ~ noa t i o( ne ~q u a ~ ~(6.38))
~Q ~ where
e ~ a n s f ewe~

case I, not only is the ~ ~ sf?om

~ 3e tor5 ~
u less in~ cme ~
TA is c o r n p ~ ~ ~ e ~ y
transfer is s a ~ i s ~ eind fbll. That is, ~ansacE~on
of c ~ ~ r ~ i n aist ii l~l n~ s ~ ain
t ecase
~ 3. hen the a d d ~ 70
~ ~ ~
-5 is ~0~~ to be close to its c a ~ ~ c i
a s i the
~ ~~ a n s f e ~ s
eref fore inore expensive power at bus I can be s h ~ ~ to
e dbus 2
h to bus
~ 2, the
~ less
e the~~ o a ~ofi pro
bus 3 ~ e n c oi s to p ~ o a smaller
~ i ~ share
a i l ~ e nto
t ~anac~ion
TA,Overall ~ e ~aree improve^.
~ ~ s


Case 1
~ d d ~ ~ i o ~ a ~

Case 2

GaEe 3

Poo1 gen. at bus1

Pool gen. at bus2
001 demand at bus4



40,6 t



146.8 f



~ i i a t ~ rfrom
a l 3 to 4
from 3 to 5
from 2 to 5







-- No data
apprQachestowards ~ ~ s m i s s i osystem
operation in power ~ ~ r k ewt s~ r ~ in
~ nangopea

skied ~

u u ~ Prmedikre
d i ~ ~ ~ ~ ~ ~

price ~ ~ ~issues d i t c u~~ ~ ec Section

~ ~6.8.1 i s based on the ass
able to respond p r o p e ~ ~and
~ i ~ aare
~ ~
t es r ~ e c trational
~ o w e v ed~ , e m elastic~~~e$
~ ~
of c ~ s t o ~ c r s
range from h ~ ~ elastic
h ~ yto h ~ ~ h ~l y e ~~ ~~s ~ ~o mwith
~e r ~shighc elastic~~~es
will b
s e ~ stoi power
~ ~ ~prices while to tom er^ who are more ~ n ~ ~ awill
s t be
i ~inert to
prices and fail to react in time.
~ r a n a ~~.Qt o~r~d ~ n a ias
i ~dn e ~ a n s ~ a t e&dQ V ~ explores an a ~ t e ~ a t a~ vp e~ r o to
ameliorate c o ~ g e s ~ oand
n provides useful ~ u i d e l ~ nfor
e ~market pa~ic~pants
to n ~ ~ ~
puwer e x c h ~ n ~that
e s avoid ~ ~ n ~ e sand
t i learn
o ~ to d e ~ e on
n ~geo
h ~ c da ~ ~~ ~~ ~ s
~~~~rs u ~ ~(and
l y d ~ m ~ ~n od ~~ f o ~~ ~~ ~o t ~ a d .
An ~ n ~ ~ o~ n ~g e m
as ~~a~ g~ee r ~~n ~~ ~o~ c [45]
e das~$ ~ ~ in ~i~~
orates the ~ b o v etwo issues into the wiil~ngnes$~to-~a~
~ ~ $ ~ a ate
~ # ~ i ~ e~0~~~

t ~ ~ e ~ tby
i othe
n IS


arket response
~ ~ r ~ procedure
~ n afor~congestion
~ o ~ relief
sent a short time ~ e ~ which
~ o ids divided
E need ~not be ~equal to
~ each ~
~ y s t ee er
~ at ion conge~ionis found
i n ~ o ~ ~ a i iwhich
o n , may
o p ~ r a t i nstatus

(6.7) during i n t e ~ a l

operation time ~omain.

procedure must iterate in the whole ~ansi~ission
This i n t e g r a t ~c~o ~ r d ~ n a ~procedure
can be seen as a practical aliemat~~e
to c a
rig~ts,which are defined in a airwise manner l46] or as rights on i n ~ i v i ~lines
~ a lt47J.

e s ~ c of ~the rpower
~ ~in&
last two decades and up to now about 20 countries have r e s ~ c ~ r their
e d systems and
others are ac~~vely
p ~ s u i n gsimilar paths. One of the mo
c~~~~ efforts is the t r ~ s ~ open
~ saccess
~ ~ and
o this
~ has
c ~ a p ~ ~ ~ ,
Firstly, this chapte~d ~ s ~ ~ ~b he $a r ~ ~ t of
e ~Uie$ ~~ ~ ~ s~

and the necessity of open ~ ~ ~ ~access

i s to sf a~~ ~o ~ ~ t ~ t e
disc~ssionof e l e c ~ i market
c ~ ~ s ~ c t and
~ asso
~ e ~
c ~ ~ p has~ been
~ provided.
~ e ~ The
~ fiinc~ion~
and r e s ~ ~ n s i b ~ ~ i ~ ~ ~
rns have been d ~ s c ~and
i ~disc
e ~
sion open ~ c ~ e si,e.
s , costs of ~ ~ ~ s r n i s s ~ o n
~ ~ e briefly.
~ ~~ n~ n~this~ec l ~ l ~ ~
nal issues in the e ~ e raz~ ~ ~ g
ment and effects of security c o n s ~ d ~ ~ ao t i ~ ~ s
h ~ all~been
e isc cussed from the o~e~-access
v i e w ~ o and
of this c h a p t ~ rMost
o f the discussion is based

, a s~~~~

T~nsmissionOpen Access







Price $k
4.WF .3





1 .OS





** Voltages are kept within the range of0.95-f.05.

- No data

~ i l ~ ~ n (w)
$/MW 2h



Power System ~ e s ~ c ~andr Di enr e~~ I a ~ i o n

Transmission Open Access


.David and R.S.Pang, S e c u ~ ~ ~ ar~cheduling

o ~ r ~ ~ a c ~ini ao dn s~ r e ~ l pQwer
system, IEE Proceedings - Generstion, Transmission and Distribution, Vol. 146> No. 1,
January 1999, pp.13-18,
J.G. ~ a ~ t e n b a cand
h L.P. Hajdu, Q t i i a l corrective re-scheduling for power system security,
r E E Trsnsac#~ons
on Power ~ p ~ a r and
a r~~ y ~ V~o l ~eP A~S -sNo.2,
~ , ~ 1971, p p , $ ~ 3 - 1.
A. T ~ ~ ~ k a c an
~ l a m Tudor, ~ p r e~ s c~~ ~~ d ~of~power
1~ n g for s y ~ ~~ ~e ~~ a ~ j l
IEEE ~ r a ~ s a c ~ ~on
o F i s ~ ~ ~ aundsvs~ems,
r a ~ s Vol.PAS 71, 1971, pp.2~86-2~92.
A. Monticelli, M.V.F, Pcreira and S. Granville, S e c u r i ~ ~ o n soptimal
~ ~ n ~ dpower flow with
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n sPower S y ~ ~ e mV01.2,
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February 1987, pp.175-182.
Davivid and R.S. Fang, ~ ~ i ~ ~operational
c a n $issues in open access ~ y s ~ ~~ s , ~
srch C o ~ hop,
n ~ ~ paper
at U n i ~ e ros f~ ~~ e s t Ae ~~ s ~Jufy
l ~~ a9 9~ ~ .
M,Kakimoto, Y. Ohsawa and M. Hayasbi, Transient stability anal~sisof electric power
Lyapunov hnction, Part I and 11, IEE Japan, VoI.98, 1978, pp.62-79.
re and S. Virmani, A practical ~e~~~ of direct analysis o f ~ransient
stab^^^^', iEEE Tram. on Power ~ p p a r s and
~ ~ Systems,
Vo1.98, 1979, ~ ~ . 5 7 ~ ~ 5 $ 4 .
Y. Xue, T.V. GuEsen and M. Pavella, Reai time analytic s ~ ~ s ~ i ~t ~~e v~ ~for
~ ot dy
sec^^^ a ~ s e s s i ~and
e ~ ~t r ~ v e n t i control,
IEE P ~ o c e e ~ iPart
~ g ,@, Vol. 135,No.2, I
H.D, Chiang, F.F. Wu and P.P. Varaiya, Foundations of direct methods of power $ y $ ~ ~
~ Transffctions
~on Circuits
~ and~ Systems, Vu1.34, No.2, 1987.
S.N. S~nghand A.K. David, Dynamic security constrained congestion ~ a ~ a g c ~ in
c o m ~ ~~ ~ e~ cv~ ~~ ~~ ri Proceedings
~ ~e ~ af ~the IEEE PES ZOO0 ~~~~e~
S~ngapore,January 2000,
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~ sTransient S~abilityassess men^ and Security Control, P
Thesis, Hong Kong Polytechnic University, 1995.
B.M. Anderson and A.A. Fouad, Power System Control and ~ t u Iowa
~ State
~ ~ n i ~v e r~s i ~,
Press, 1977.
P.W. Sauer md MA. Pai, POMW~ y s g ~
e ~ y n and
a ~~ ~~ u~Prentice
b ~ Hall,
~ Mew
~ ~Jersey,
S. Sterling, &LA, Pai and P.W. Sauer, A ~ e t h o d o l oof~secure and 0
~ opera~on
~ a ~
power system for dynamic contingencies, Electric Machines and Power Systems, Vol. 19,
1991, p~.6396~5.
H. ~
l and F. aAlvarado,
~ ~ ~ a~n a ~ ofe~ ~~ e n u~~c ~ n g~~~s r ec~
do n d ip~ ~in~~n~ ~ ~ ~n d ~
ration of a power system, IEEE ~ ~ u n s a c5n
t ~Power
o ~ ~ y s Vo1.13,
~ e No.3,
~ ~~
2998, p p . ~ ~ ~ ~ - ~ O 1 9 .
.S. Fang and A.K. David, &I i ~ ~ e congestion
~ a t ~manage men^ strategy for real-time
system operation,IEEE Power ~ n g i n e e r ~Review,
~ g Vo1.19, No.5, May 1999, pp.52-54.
W,W, Nogan, ~ o n ~ r anetworks
for electric power ~ ~ ~ s s iJ oo i ~~of~ ~~a ~ e
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s ~ electsic power ~ ~ ~ ~ ~ Ji os ~s ~oif of f~ ~~
Vol. 10, 1996, pp.25-59.

XYan ~ i a o T o U
n ~~ ~ v e r s i ~

Dr Loi Lei Lai

City Universi~Lon


Since China ~ n ~ its~ first

~ eac o~n oe~ ~r~ce ~ o in
~ sjate 1978, e
~ c oe ~ s~ u has
~~ ~ ~ ~
oss don~e$~ic
~ r ~ d ~ c t
e ~ e r c~ y o ~ s ~ ~ ~ ~ ~ n
prices have p ~ ~ y e ~
ears or so. Before thaf strict but e ~ f ~ c ~ ~
h e l ~ hold
e ~ ~ n e d~ e~ y~ in~check,
~ d and until r e ~ ~ te~l ye, c ~s ~h io ~~ ~ e s
rion. Now that the market larg~lyd e t e ~ i n e ~e~~
~ e n planing
~ r ~has
~ matured, economic forces are I

~with a~~ o ~ c~ i ~oeif grants

a ~ ~~and
o ns u ~ s ~ d ~ s e
from provincial and local utilities. In 1985, the
d to set tariffs to recover inve
ed ~ o ~ s ia c~ ~ ~s ~s ~r oa v ~~ ~l c~
e s ~ ~ ~new
~ ~policies
s h e to~ c r ~ ~at e

. Power ~

in the power sector d u ~ n gthe late 1 ~ 9 ~ s

~ r a ~c r ~e e a~w~~~~i define
~c s~ , how ~ u p c ~
er plant, are not being ~ o ~ o u r~e ~ . ~

cording to ~ a r g i n cost;
a ~ that is, old plants usually sell the most power sin
ady paid off their c
~ casts
p and~need~to cover
~ only fuel,

ent of ~ h i ~electric
a ~ power i n ~ u has
s ~gone t ~ o u g ha ~ e r y
that is, the power i n d u s ~is gradua~lyc
et economy c h ~ a c ~ e ~ s tand
i c the
i s also ~ h a from
~ the
~ stle
n side
as the r~~~~ of the electric power ~ n d u goes
s ~ on, the de
will have a great in~uence01p the f u ~ r e
ectriciy sector i s cha~ginga great
~ v ~ ~ oofpChinas
~ ~ nelectric
in effect and the e a v ~ o costs
~ ~of e ~ ~
d for. These factors must
energy use are not yet even p ~ i a l l y
ricing s c ~ to~ promote
m ~ the
~ s ~ ~ $ ~ a ~ nuse
a bof
l eenergy 13-61.
tranpare~cy and legal r ~ ~ will
~ eu n s~~ ethat
c o ~ ~ a are:
c ~ sh ~ n o ~ ~ ~ d
g is s ~ ~ a i ~ and
~ s the
e dde~i~oa-mar~ing
a u ~ isoclear.
~ ~
e c o ~ o ~cost
i c of pollutio~needs to be coni~eredso that true kast 60
made. Chinas e c a n ~ ~eifc~ ~ i e n and
c y e~vironmentalquality ~ e p e n don
~ ~ ~ o ~ s .
The ~ l ~ ~ co w
~ ~~c r~ din ~ h ~~ has
n aalread~
t ~ gone ~
h a t a ~~yc ~
past ~ e ~ ~Atd ~e .r e ~its~~ ta n, s i t ~ o ~ a p l a ~~c o~n o~~
under way. On 16th
of Electric Power w
s e m ~ ~ State
~ ~u ~o C ~ ~ n e~ ~ e~r e s~~ o~n s ~ ~ ~w~ i t i e s
search. ~ i K grid
e man

reale a m
e n ~ cred~tab~e
~ e
service a
ard bgal r ~ ~of~~ tn sv e s t ~ ~ ~
The ~ s t a b ~ ~ $of
~ ~ e n t Power ~ o ~ o r a ~
~ omn ~ the ~r
er i n ~ u ass it~ entered a new stage [7-161, Pilot bi
~ u n ~ c i p a~l i~~ e~ ~~ ih aa ~n d~~o rno~v ~ n and,
s in ~~~~,
and thea ~ a ~ i o by
n 2005.
~ ~ eAn
and order1~
~ g ~ ~will
e be
t full
~ o ~h ~~d reopower
s plant will allow a wi
The reform of Chinas e l e c powe
of r e f o and
~ a satooth

~ %hat
~will e

~~ of

e ~ e c ~~ c Q i W
~ d ~u o~ ~
economy presents problems that demand further exploration and confro~ta~ion;
s ~
e to ~
be sa~s~actorily
from basic theory to ~ o n ~~r a ~c ~~i ~~a

This c h a ~ will
t ~ ~ ~ ~ o the
d u c ~

and ~ a ~ a g e m
~ t of
plan. The p r o b l e ~ and
s obstac
of e l ~ c ~~ ~ c c ~and
~ ~n g
~ e v ~case
r a ~$ t ~ ~ ~ e s

Electric Power Industry ~ e s ~ c ~ inn China

n g

The ~ ~ s ~ i of~power
u ~ network
o n
service areas and their installed g e ~ ~ r a ~ ~
are shown in Table
e 7.2. A c ~ a ~ l the
y , f i t four ~ ~ t e r ~ ~ ~ o ~ i n c
shown in Table 7.1
an ins~a~led
capacity in excess of 30 CW e
ina I n ~ e r c ~ n ~ Nefwork
e c ~ e ~ with capacity of over 45 GW has be
i n ~ e r c o ~ e the
uangxi, Gu~zhouand Y u ~ four
~ n
HNPG is just below
and has not been shown in Figure 7.2.


of power network sewice areas

Installed capacity
Network &c ~ e ~ i o n



Electricity ~ e n ~ r ~ ~ ~ o n


(m) 4"w



North China Power Net. (NCPN)

Northeast Power Net. ("JEPN)
East China Power Net. (EC
Central China Power Net. (CCPN)



Northwest Power Net. (NWPN)

~ ~ ~ n d Provincial
Grid (SDPC)
Fujian Provincial Grid (PJPG)
~ ~ a n g d Provincial
Guangxi P r o ~ ~ n c i a i G ~
Chongqing Power Grid (CQPG)
S ~ ~ h u Power
a n Grid (SCPG)











Share o f ~ n d u (%)
s ~ SIiare


~~~) ~


h Heavy
~ Light
~ ture

Share of
Share of
Share of
~ ~ s ~ ~ ~ ~urban
c~ k;C, nual
i p
~ tation
~ etc. ~ c ~ ~~ ~ 1r ~ c e ~


I987 49Q,27 8f.Q
1988 535.87 80.3
1989 576.20 79.8
1990 6 ~ ~ . 678.7
1991 669.63 77.8
1992 745.54 77.1
1993 820.11 76.7
1994 904.65 75.4
1995 988.64 74.8
1996 i0~7.03 74.1
1997 1103.91 73.0
1993 1134.73 72.0









I .7
I .7






~ ~~


Municipal and


Chemical Products



an ~

x large ~~ ~ ~ e~ -e o ~ ~ ~~r ~hase~assets

~~s eof ~,x 8 . 2 ~ yi ~ ~ ~ o n

t role in the fbture ~ e v e l o p ~ of

e n~hinas
~ o w e in
ng and ~ a ~ a g i nitsg assets well or not. In two y e w 9 pract~cemd
e SP has set its deveiopment objective o f creating a ~ r s ~ ~e ~ tl ea~~rins~ s e
the wor~din terns of h o ~ d ~ nstock
and g r o ~rn ~ agement, and this is a ~~~e~
de~elopmentof the
policy of ~ o ~ o ~ t irs e~d s ~ c ~ ~ g ~
~ ~ g a l i ~~a~~~
Thus, the SP has made a strategic
~~~~ for fhe fiime d~velo~ment
of ~ h i n a electric
~ o w e in
(1) The Erst step, from January 1997 to



~ s ~ ~the~ SP~ands the~ d i s ~n~ n~~ l the

i n g ini is^ of Ekctr
transfer of government functions and p~ofessiona1~ a n a g e ~ e n t
c o ~ ~ ~ r u cat inew
~ g ~ e c i s ~ o ~ system
~ ~ ~ a~ k~~ ~~ ge in
w coo ~m ~k l ~ with
a n ~a ~ o c i a l ~ s ~
m ~ r ~~e ct o ~ ~ ~ n ~ y ;

(2) The second step, from 1998 to ~ 0 0 0

Insisting on the policy of separating the gov
etions and taking the ~ ~ o v i n c eass entities
~ o ~ p l the
~ ~~ ~e n sg ~ in the
c SP
~ system;
~ n ~

the genera~o~

) The fourth step, after 2010

Upon the es~~b~ishment

of the SP, the ~ n c t i o nof~ m i n g the s
ise ~ a ~ a g e m formerly
~ ~ d e ~ by
k e n
SP. It ~ o $ s ~ sno
s e~~ o v e ~ ~ e n
s u p e ~ ~ i ~ from
i o n related gov

its ~ n a budget
~ cis a~located
~ ~ directly from n
The ~ r g a n ~ ~is~ shorn
t ~ o nin Figure 7.4 belo
, n a ~ e l y~ o ~ h e aNorth
s ~ , China
a Power ~ ~ o and
u p~ o ~ h w ~ s t
Gs5up and Gezhouba ~ n ~ ~ n ~Group,
e r i as
n ~w
d s u ~ s i ~ i o~ ~ e s

~ Power
e J u ~i n ~ -~ ~ ~eo~c~ ~o r a~t iwo ~h ,~ are
~ h all exclusive~yowned s ~ ~ s i d i a r i e ~

Electric Power Industry Restructuringin China

ese state~owne~
assets, held by the Armed Police Hy
under the SPC.
C o ~ s t ~ c t i oTroops
as Anneng Corp.), belong to the SPs ~ ~ a g e m e n t .
Other c o m p ~under
i ~ ~the
i of Electric
~ Power
~ are the
~ SPs swholly ow
holding or jointly shared companies according to their property n
s ~ c ~ r eThese
s . cQrporatiQnsand ins~i~tions
under the SP include the fol~Qwing:


China ~ u a d i a nPower Plant En~~neering

General Corp.
China Anneng Construction Corp.
L Q n ~ ~Electric
a n Power Group Corp.
~ h o n ~ e Power
n g Tech. ~evelopmentCo. Ltd
China Fllecbnc Power Trust & Investment Co. Ltd
China ~ ~ e cPower
~ i cTechnology Import & Export Corp.
China Fulin Wind Energy ~ e v ~ l o p ~Corp.
China Power Investment Co. Led
China Power Investment Holding Corp.
~ h o n g ~ Electric
~ n g Power Industry ~evelopmentCorp.
National E1ectrh.i~
China Extra High Voltage Trans, & ~ ~ b s t a t i oConstruction
lectric Power Fuel Corp.
Other e n t e ~ ~under
s ~ sthe m a n a g e ~ of
e ~the
~ SP.

ing & Design General Institute
Natio~alPower Control Centre of China
China Electric Power Information Centre
Electric Power Research Institute
Thermal Power Research Institute
Najing A u ~ o ~ a t i oResearch
Wuhan High Voltage Research Institute
North China Electric Power University
China Electric Power News
China Electric Power Press

Power System ~ e ~ ~ ~ c t uand

r i~fel~~~ ~ M l a t i o f l


The o p ~ r a ~ i o nand
a ~manager~alfunctions of the SPC niainly include:
~ u n n ~ nthe
g e x ~ l u s ~ owrted
v e ~ ~ subsidia~compan~esand Ehe h ~ l ~ori jno~~ n t h~a~~ d
~ o ~ p aand
~ the
i e sia~~"owned
stock r ~ ~ inh their
~ s a f ~ l i a ~ units
e d ~ ~ ~to state
s u law,
a ~ ~
~ ~ g u l a t policy
~ o n ~and s ~ t ~ ~ y .
~ a i s i n gfunds within the financing scope approved by the state to finance and invest in
power projects and related enterprises; the income from investment and assets property
transfer will be used for capital reinvestment ~ u ~ u toa the
n ~regulation; taking charge of
national power network int~~connect~ons.
Running and managing the large power stations connected to regional i ~ e ~ o r kors
t r a n s ~ ~ butk
t ~ ~ power
across regions and the n e c e s s 8 ~peak~ngand f r ~ u ~ n ~ y
r e ~ u ~ a ~power
i n g stations.
plan^^^^^ and ~ ~ s p a tthe
c ~~ ~ a~power
~ ~network
~ s u p~e ~ ~ s ~i nsafe,
g stable,
e~~ o n o m ~ c
and h ~ g ~ ~ ~ uo ~
a ie ~r at ~yoft
~ oalf
n ~ o ~ w ~ ~in~the cormtry.
~ x e r c ~ ~power
i n g n e ~ o dr~~s ~ a t c h ~m~nagemen~
on the na~iona~
power network and
the related generation, ~ a n s m ~ s s ~
o n~ i s t r i b u ~e on ~~ e ~ ~based
~ ~ son
e sthe ~ e g u l a ~ i o n
of Power System ~ ~ s p a t c l ~ i n g .
The restructuring within the SP, separating generation from transmission and dis~ribution,
promoting the na~ionwidepower network interconnec~ionand speeding up rural power
~ n s t ~ ~ t i oreform
n a l are the current focuses of electric power industry r e f o and
~ are listed
as foflows:

(1) To ~ ~ othe ~r ~ a~ a~ ~~~0~~

~i ~s nc ~~ r nh ~~a of
~n d~ i~ ~s e r ievels
e ~ ~ in the
In ~ ~ c ~ ~with
d 8the
n r~ ee u ~ ~of~s e ~~ ~~up
n sga mode~isede n ~ e ~~~ s e ~the 5Psis
g a m u ~ ~ ~ -el ~~v e~ ~ ~ ~ entity
r i s~ a~ n/ a ~~ e~system.
~~e an ~
~ r ~ ~ a t i o n ~
and its s ~ b ~ i isdan~ equal.
a ~ one
~ in law among ~ n ~ ~ p e npersons,
d e n ~ and it
is a capital link ~ e ~ a ~ ~ o nins hproperty
between the investor and the e ~ i t e ~ r i invested.
The pilot project was ~ ~ i i ~ ~by
a t ethe
d Northeast Power Group Company WPGC). The
NPGC was ~ e ~ r g a n ~8s
s e an
d af~li8tedentity of the SE",being an agency of the SP in
Northeast China. The three provincial power c o ~ p 8 n ~ eIns Liao~ing, Jilm and
Heilongjiang provinces, formerly affiliated to the NPGC were reorganised as companies
with ~ n ~ e p e ~ dlegal
e n ~qual~~cation,
having c ~ ~ p ~~ ee ~~ ~e ~ rights.
~ n nThe
i nbasic
p ~ n c i for
~ ~r e o r ~ a ~ ~is~tos iset
n ~up one p r o ~ c power
~ a ~c o ~ p ~ for
n yedc
its r ~ s p ~ n s j b i sl ito~ ~ ~ p l ~ rthe
and ~
ao ~
we^ n e t w o ~ The
~ . a ~ m ~ n i ~ ~~a tn~ vc et ~ ~ n ferred
to the s
m ~ ~ a g e m edn et p a ~ e onf ~the local g o v e ~ ~ ~ ~ ~ .

(2) To promote s e ~ a r a of
~ ~g ~~n~ ~ ~ afiom
t i o~na n ~ ~ ~and
sd i s~ ~n ~ ~ ~~ntroduce
t i o n ~the
compe~ition~ e ~ ~anda build
n ai n ~o ~~ a l ipso ~w ~ market.
The launch on the ~ ~ i l d ~power
n g market was d ~ ~ in eDecember
~ ~ 1997.
n For
~ ~
establishing a ~
~ ower~ market,
l ai step-by-step
~ method was adopted. ~ c c o r d i nto~
the policy, 'power plants can be run by multi~atera~s,
power networks must be managed by
the State'; the current objective is to separate genera~ionfrom ~ a n s m ~ $ s and
~ o nd ~ s ~ i b u ~ o
and to build the & e n e ~ t ~ o n - spower
i ~ e market. It has been d e ~ e ~ ~ to
n einitiate
n ~ ~ ~
projects in five ~ r o ~ ~ and
n c ~one
s city, Le, ~ h e j ~ a~ n~~e~n d ~o ~ ~a , o Jifin,
~ e ~ ~ pro~inces
~ n ~and ~~ h~ ~a g~ne~c ~
aau s~eof .the ~ ~ ~ ps ~~~ ~i ~and
~i o~~n st ' ~ d ~
issues, the c o ~ c r a~p~~ er o ~ c hof
e sthese power companies are d ~ f f e ~Ine a~ ~~. ~ owith
~ ~ ~
the r e q u i ~ e ~ c of
n ~the
SP, the follow in^ ~rinciplesshould bc ~ o m p l with:

Electric Power Industry ~ e s t ~ cin~China

r ~ n ~

equaI competition
high ~ansparency
sharing benefit
lowest cost
opera~ionby laws and reg~la~ions
subject to supe~ision.

i o n reorganise several
The concre~epractice is to separate generation from t r ~ n s ~ ~ i s s first,
generation group companies, and adopt a hid price ~ e c h a n i sin~ genera~ionfor the
generating companies, but a few power plants, such as peak regulating units rhsrmal units
mainly used for s u p p ~ y i nheat
~ to the local area, are temporarily not included. For the sake
of transition, the electricity genera~ioncould be divided into two categories: one is the
basic part o f electricity generation, the account of which is sertled according to the current
electricity ~~neratioii
price cons~deringthe repayment of principal with interest far newly
built power plants; and the other is the competitive part of electricity genera~io~~,
which is
detemiined by the bidding price. As time goes on, the bidding part should be increased
gradually. Finally, the principle o f an equal electricity price for the same network and the
same quality of electricity should be carried out.
( 3 ) To promote the implementation of the nationwide power network interconnection and
realise the o p t i ~ a disposition
of resources. Owing to the distribution of energy ~ources
and loads in ~ h i n a ,implemen~ingthe nationwide power network interconnec~~~n
realising the optimal disposition of resources is an inevitable option. The construction o f
the e x ~ r e m ~large
~ y Three Gorges hydro power station and its ~ a n s m system
~ s ~ ~ ~
motes the f o ~ a t ~ of
o nthe nat~~nwide
power network interco~nection.It is p~aff~ed
between the Northeast and North China power networks will be
in 2 ~ 0 0 the
, in~erco~nec~ion
between the Fujian provincial power network
and the East China power n e ~ o r kwill bc accompl~shedin 200 1 , and the inF~rconn~c~ion
between the Shantong provincial power network and the North China power network will
be accomp~i~hed
in 2003, the ~ n ~ e r c o ~ e c ~between
i o n the Sichuan p r o v ~ n cpower
network and the N o ~ h w ~power
network will be accomplished in 2004. Three crossregional. interconnected power networks in northern, middls and southern China will be
basically ~
Q around
~ 2010.
~ The
d ~ ~ i interconnec~ed
~ e d
power network of the whole
c o u n ~will
~ be achieved between 2010 arid 2020. The decisions for the above large
engineer~ngprojects are all made on the basis of detailed preliminary feasibility studies of
the ~ e i i e f i ~and
s effect~vene~s
of ~n~ereonn~ction.
The f o ~ n a ~ i of
o ~the
i nat~onwi~e
network in~erconnec~~on
will ~ ~ f i n ~accelera~e
~ e l y &hefuture develo
industry more e~Qnomica1
and effective way.
(4) To s~~~~ up mra

r n a ~ ai ~~s t~i ~~~ ~~~ o ~n at~l

I ~ p i e ~ e n rural
~ a n a ~ ~ m~enns tt i ~ ~ i oreform,
technically r e n ~ v ~ ~rural
power ncnvorks and reali~inga unified electricity price for urban and rural areas in the
same power n e ~ o r kwith the same q u a l i ~of electricity arc the current objectives of rural
power system deveiopmen~.It will take three to five years. The task o f this r e f o ~i s
mainly to s i m ~ ~ i fthe
y ~ ~ a n a g e structure
n ~ e ~ ~ and
~ to solve the chaos in rural e l e c ~ ~ c i ~
pricing, targeted at realising unified maIiagement, unified a c ~ o u n t i nand
~ ~ a uni~ed
electricity price for urban and rural power networks. Technical renovation of the rural
power network aim to
e the losses of lines and transformers. The estimated
is 180 bill~on
art. The line loss rate will be reduced to below IS % from

ofthe SP

gy of power ~
d de~e~oprnent,
sthe SP~will o ~ s ~ ~ e
le d e v e l o p ~ ~byn relying
on technical progress, mher d e e p e n ~ n ~
r ~ f and
o ~~ d e n ~ open
n g policy.
In additio~to focusin n ~ d ~ eresearch
n ~ and
l staff t r a i n ~ nthe
~ ~SP ha
echnology pilot projects, namely clean coal power g
y c o i i s ~ ~ a t i oand
n e ~ e c t saving,
~ c ~ e~
as well as a ~ o ~ ~ u ~ e informati
the $16 has focused on bath international
omestic ~ n ~ c i sources.
s power i n d u s ~is still m ~ u o task.
~ s~~e r n ~ t i g a tin
d ~ ~ ~due
c to
~ the
l t increase in electri
in 1997 in China was only 0.21 kW,
e i e c ~ i consu~ption
world average. It i s planned that the nations total installed capaci
W in 2010, the na~ionwidepower ne
ect being at the centre. In order to achieve the goals, SP will ~
u8 ~
policy of

change that must take place is that the electric power sector
ented to the market rnechanism. The
pr~vides8 good o p p o ~ for
n ~the~power sector to make
itself. These ~nclude:
should be worked out in accQ~d~nce
course of economic d e v e ~ o p ~ e inste

e x ~ a n s i o f~s r n a l ~ ~ sci ~o e~ d ~ n s i ~n h~ e~ ~ppower

a~ i plants.
~ ~ r ~ ~ g the
~ hc o~ nn~ ~t ~nc g~ofothe
n ~ e ~ With
o rthe ~rapid dev
~1~~~~ the c o ~ ~ s ~ coft the
i o ~ e ~ oincluding
r ~ , the facilities from
lines to rnediurn~and l o w - v o l ~ ad~i s~~ b u t i no ~e ~ o r lags
~ s beh~nd

o ~ ~ ee ~~ists o ~~ ~ ~ la e~ ~~ ~~ ~and
e oau d ~ i s~ ~ ~
%awhere conflicts are enc~unteredbetween
on and d ~ r e ~ l ~ ~
b e ~ ~ e n
value and controlled profit, and b e ~ e %~n o v e ~ ~ e n
local and p ~ v a t ~e ~ ~ t i a t iThe
v ~ so. f ~ e i a~ d~ ~anager

at the vikpiaus levels U

necessity and i
~ of transition
~ to~market
e ~ C Q ~ Q but
~ Y they
are not well i
about the ~ e c ~ and
~ approache$
~ s ~ tos realise the ~ ~ s ~7%t ~ o ~ .

cing reform lies at the heart of Chinas response to

Electric Power Industry ~ ~ ~ ~ ~in cChina

~ r i n g


~ ~ w e v none
~ r , of these has been st~dardisedas ~ ~ t i o np ao~ ~ ~ c ~
however9 there is a gr~wingrealisation that the establis
p ~ i c ~ n~g
~ has become
~ to the
e ~eve~opment
of a s ~ ~ t a ~ ene
Since Ehe mid ~ ~ an ~
0 s n u ~ b of
~ enterprises,
~ ~ ~ c ~joint
l av r ~ y
a d o ~ t ecost-pI~~$
~ r ~ c si n~ ~c ~that
e sbase the price of e n e product
~ ~ ~ on ~ ~ d ~ c t i o n
costs ( i ~ c l u d i ~
i ~recovery of c o n t ~ c t i ~capital
and interest, o p e ~ t i o ncosts and
labour costs), tax aid to the government, and profit. This is a considerable j ~ p ~ v ~
over the a ~ i n j $ ~ r a t i v efixed
l y price, but it still results in several amb
how to c a l c ~ ~ costs
a ~ e in an e n v ~ ~where
~ n ~~ ~ ~~ist often
~ t~ oi ~ob l~
regulate the profits of enterprises.
pricing was i n ~ o d ~ c eind 1987, along with $ e a s o ~ a ~
er is a mjar compo~ientof base load. H o w e ~ e the
to d e c o~w ~ to
n~~the~ ~nabi~ity
of rates to cover ri
~ c ~ to ecap^^
s pricing differences, i ~ v e s ~ e ~n t~ v ~ rtos si m
o ~a ~ ~ ~
lm capacity~and the inability to collect user fees.
The regional and
ectldcity tariffs, which are jointly fixed by the state, inre
a ~ ~ i n by~ the
s ~ ~ ~ ofdPower%The ~
~o f united
~p r ~f c c
~n~~ ~of ~th ~ s t
grid prices and outes which arc: managed by the ~
~ o f Power
~ r o v i respectively.
~ c ~ ~
The prices of mid- to small-size power plants man
and counties are fixed by local ~ o v ~ ~ m echecked
and r a t i ~ e dby
r e s ~ o n i for
~ ~ pe ~ as welf
~ as
~ the, p~~~~ ~ u r e a Tbe
~ . w ~ o ~ e s prices
a ~ e of
r p ~ which
~ are
~ priced
by the state are checked and ~ a t ~ f i e d
d p r o v ~ c ~ power
b ~ ~ a respec~~vely.
The base price reflects
rice, md has no relationship to ~onsum~tion.
The c ~ r c ~ ~ aprice
t ~ n g~ ~ ~ o r
the v
~ ~ r ~~~ ~ ccost.
~t i oThe
n~ ~~~~c~~~
s ~ c is ~d ~ i einto aix
~ c a ~t e ~ o ~ ~ $ , ~
b w d on uses and v o ~ ~ ~ gThe
e s .cate~or~es

electricity rates for ~ ~ g h ~ n g ;

md o r ~ ~ ~ n n d ~ ~ s ~ ~
e ~ e c ~ i crates
~ t y for the larger ~ n d u $ ~ ;
electricity rates for agriculture ~ r Q d u c ~ ~ o n ;

rirnarily becaus~nationalis~dand ~ ~ d ~ d ielectricity

pricing po~ic~es
have not been
$ ~ e n t ethe
~ , c l a s s ~ ~ c a ~of
i oelectricity
tariffs does not reflect the ~ ~ a r a c ~ e ~ s ~ i c
t e ~ e ~ ~~ ~~ i ~t y
u ~ pfor
t ~example,
o n ; e ~ ~ c rates
~ cin i s~~~
~ ~~e~ (e.g.
~ o ~ ~~~~~~~s
e r and
c ~~ o~t e ~ontinue
~ s ~ to be subsidised~as are the p r e f ~ r e n t ~i ~
sent, tariffs fixed by the
.e. electricity prices are b
be r a ~ i o ~ a l ~and
~ e d~ner~ased
es have offset revenue s ~ e froni
a ~the~~ m ~ ~ h
with s y s ~ e ~ - weffects
i ~ e of the resulting ~ n a n c ~ a ~

~ s t a b ~ i ~ h iRn g~ o w market
~ r
in China will in~oducea m ~ ~ e t - o ~ eec~o tn e~ ~ y ,
promot~ngs ~ b s t ~ t development
in the power i n d u s ~Tt~is ~ x p ~ to
c ~sollve
~ d the
1. Power resource location problem
the electric power
the s ~ ~ a t i oo nf an electric power shortage>the main issue
~ n d u s must
t ~ face is to speed up c o n s ~ c t ~ofo new
~ power plants. Divversi
~ n v e ~ charnels
~ e n ~md ownership of power p h t s will help to achieve the e
~ o a ~Ats .the same time, however, it will also bring ~ r o ~such
l eas~the~i n a p ~
we^ mix ~ c air~~ oe~ ~~u and
t ~ onno ~ i ~ s y n c ~ r o ncoo~ s~ s ~ c ot f ~theo ~ ~ w e r
In tbc past, the above p ~ b ~ were
e ~ cs o n ~ ~bya lthe
~ power s ~ o ~ sg~ e~ a t i o ~ .
hen power supply exceeds d e m a n ~these
~ p r o b ~ e b~ es c o ~ ethe ~ a i cons~d~~ation.
Afier establishing the power market, power projects are to be decided a c c o ~ i n gto
~~~e~ ema and, not adm~nis~ative
order. Under r e ~ l a t i o no f the ~~~e~ m e ~ h a n i s ~
p ~ w eresources
allocation will be more e f ~ c ~ and
e n stable.

2. Low a ~ i n i s ~ a t i efficiency
~ u ~ the
n gpast 20 years, r e f Q of
~ the Chinese economy has u ~ ~ ~ r ag rapi
o ~ e
~ e ~become
a b ~ d while
~ t prices
Supplies o f c o ~ o d i t have
no effort to i
To compete in the market, manu
ever, Chi~a's
a ~ ~ n ~ sand
~ ~a ~t oi ~ their
o~ t es e ~ ~ ~ e
i n d ~ does
s ~ not face such still o p ~ a ~ aecsc o r d ~ nto~ ~ l a ~ ~ n ~ ~ ~0
~ o d u ~and
e s has a ~ ~ n oelectric
~ ~ pl ~y win~selling.
The gene ratio^ cost has been ~ ~ c ~ e a year
s i ~ by
g year. The g ~ e r a ~ oand
~ r ~ ~ ~ i sindices
s i o nare very low: for ~ n s ~ n the
c ~ na~~onal
net ~ o n s u ~ rate
~ ~ is~ o n
about 400 ~ W (standard
coal); the line loss rate is a b o 7%.
~ ~ These ~ n ~ i c are
e s fw
b e h i n ~the world's average level.

3. ~ c i p r~~ bg~ e m
~ ~ a ~ of the power i n ~ u tos gain
~ ~ more b e ~ e ~ t the
Under the ~ a d ~ t i omonopoli~s
o p e ~ ~ ~strived
o r s to ~ a i n t aaj higher
rate o f e ~ e ~ ~ At
i c the
i ~ same
time, the cen
~ o v e ~ ~encourag~d
~ ~ vin the
e power
~ plant
~ by
~ s ~~ o t ~ sgoiices
i ~ s~u ~t has~ ~
'anew p~~~~l ~ m
rate', 'QW p ~ ~ one
n t rate'. "bus the e ~ e ratec ~ ~o ~~ ~ ~~ n~ u
i n ~ ~ ~every
a s ~year
d with new power plants pat into
average rate in an areas was about 0.47 ~a~~~
0.67 ~
~ ~ o r n ~p with
~ d the~average ~ncome
of .~ h ~ n epeop
other c o m ~ ~ d ~ t the
i e sprice
of electricity in China is
If the power shortage was an obstacle to develop
the electricity rate gradually became a new barrier to the growth of China's ~ c Q ~ o ~
To maintain a sustainable development of the national economy thorough reform ofthe
electric power i n d ~issurgently

To ~mp~emen~ing
reform, the SP has set forth a four~s~ep
r e s ~ c ~ r ~i na ~m e w The
~ ~ ~ .
period from the e s t a b l i s ~ e n ot f the SP in 1997 to the t e ~ ~ ~ a of~ the
Electric Power was the first step in ~ e a l corporate
~ ~ ~ nr ~~ s ~ c ~From
i n 19
~ ,
the SP will c o n t ~ n ~toe i n t e n s i ~~~ s ~ ~ ~ w
~ n~ period
gc ,~the
v e ~ m e n~t n c t ~ o from
n s those of e n t e ~ ~ sas
e sf o ~ ~ o ~ s ~






ower plants, and a w e l l - r e ~ l a t ~ dt , e c ~ i ~ a ~ ~ ~

wifl be open to all power plants. The SP and a111
r~tionswill run the power n ~ ~ o r k
r i s ~ / l e person
~ ~ l and e c o n o ~ i e
after 2020, the f o ~ step
h of the reform, the Chinese power indus
will t~~~ a p p r ~ ~ i the
~ a t ~ ational a ~ v a n e elevel,
~ ~o~ing
~ a t i ~ top
n alevel.


~bstaclesip2 ~ ~ t ~ b l the
i ~Power
h i ~ ~

ow to acceIe~tethe pace of reform and smoothly make the ~ ~ s ~ t fkom

i o ne ~ i s t ~ n g
~ o n d ~tot a~ ~~ ~~ ks e ~ - o ereetric
~ e ~ power
~ e d i n ~ u are
s ~the q u ~ s t of
~ otoday.
~ ~ The
~ dachieve the ~~0~ goals are as foI~ows"
~ b s ~ athat
c ~must
e ~ be r e ~ o v to
plants are not real comp~n~es.
In fact, they me just s
of their necessary powers held by other higher
e ~ o n g ~togthe SP+Thus many of the key ~ n c t ~ w
run d i r ~ c t ~ory ~ ~ ~ ~ ebycthe
t l SP
y and its s ~ b s i d i ~ ~ e
t cannot be estab~~shed*
it ~ ~ e
d ~ ~ ~j ~n g ~,and
c er ~ ~ o n a b l ~ n e ~ .
Here we face two major problems. The first one is the
rope^ right' issue i s based on the observable fact that un
the e n t e ~ r i ~ins the power i n a ~ must
s ~ be ~ ~ v o ~ v
o ~~ ~ e ~of their
t i property.
~ n
In fact, it is a p~oblemof how the ~n~~~~~~will
be able to manage and operate itself. The second one i s the ~ r Q b of~ eparatin
e ~
t and e n t e ~ ~~s e~ c ~Upi to
o now,
n ~ the
~ t~~aitional
s basically u n c h ~ ~ e although
the SP was establish
wer was t e ~ ~ n a t e C
d . ~ e ~ with
l y ~such
p e~ ~ ~ t o i ~m ~~ ~ ~ s a ~ ~
the s t ~ c of~ ~e ~ o rights,
1also r e ~ unr~solv~d
~ n
the ~ l e c ~ price
c i ~ is quite c ~ n ~ s e
. ~ ~e$onomic
c e reform began in ~ ~ i ~ a ,
s has been ~plementea.But the e ~ e c ~ ~ ~ ~
e ~ o v e ~ b~~ ce an~the
s~e electric i n ~ u i ss consi
a ~ ~ the
~ cOv~rall
e c o ~ and
~ ~ syt ~ d a ~ofd living. T h e ~ e ~ ~ r ~ ~
r e ~ o ~ a t i oofn the power market is rigorously l ~ ~ to~the~ gene
e a
f a ~ v e r s i ~~ni v~e ~s ~ e ndifferent
hnts can be economicallycla

4. Small hydro power or thermal power p ~ a n constructed

by focal g o v e ~ m e n t They
s ~ are
u s u a ~ ~mn
y by local power ~ o m p ~and
~ esell
s electricity a c c o ~ d i ~to~the
g price audite
by local gove~ments.


a1 power p ~ a sold
n ~ to f o r e ~ ~e n~ ~ e ~ rTa~ get
s efurads
~ . to ~ o ~ n ~ c t
in solme regions, several t h e ~ apower
plant8 have been sold
to the agreement of sale regional power companies tee
that this kind o f ~ e ~power
a l plant will sell a certain amount of e i e c ~ ~ cto
~ tthe
y grid
each year at a 6 e ~ i price.

Prices for e ~ e c power

~ ~ c varied co~siderablyacross p r o v i ~ cand
~ ~even withk $ ~ a
chase agreements, which define how much e ~ e thatc the~ ~ ~
m the power plant, are not being honoured. Old pXants ~ s u ~se1
most power since they need to cover only 5x1, operatio~and m a ~ n ~ costs
~ n and
~ ~neee
not pay their c a ~ cost,
~ ~ a ~
From the above classification of power plants one can see that the price system 0x1
ge~ierationside is very omplica~edand it is very difficult to form a n o ~ a ~ i s ceodm ~ e t i ~ v e
n ~28
ower Law ap~rovcdby the Peoples Cong~essof ~ h j on
f date. It i s almost useless in r e s ~ c ~~h n~ n~~a ~J power
and i ~ ~ r o v e m eofn ~the electric power m ~ k e t~ u tbe
ed by a complete legal f r a ~ ~ w oThere~ore,
new ~ e ~ i s l almust
dition or the neces
reformation of the electric power.
be dealt wilh are:
1. prop^^ owne~hip:This subject occupies a very important and critical p o s i t ~ oin~
Chinas electric power ~ n d reform.
~ s Without
a thorough ~ ~ a r ~ fand
i cfia ~ ~ ~
~ e f i n ~~ o~n~c oe ~the
i nproperty
right of regional, p r o v ~ cpower
i~~ c
i n ~ ~ ~ ~e o ~w d~~~~~
~ er ~ the
~ ~ a n s ~ to~ a~ true
s ~power
o ~ m ~ ~ e t

l a ~ i ~ nIns ~todays SP lmanagement system, temp

a d m ~ ~ ~ s ~orders
a t i vare
~ still the main measures used to manage
~ ~ ~This
a ~s r~ ~~ .shows
a ~ the~ ~o ~ ~ ~ h n ~ ~ ~ ~of t e~ s ~ i ~~ s
~~~0~must be d e f i n as
~ ~the basic p ~ ~ c i p ~ ~
p r o ~ ~ power
c i ~ ~
c o ~ o ~ a t i oand
n ~ ind
they often show more concern a ~ o u their
ing ~ i $ ~ b u t ~ofo social
ben^^^ is an i
t of the ~ o ~market.
e r
In s ~ mChinas
~ ,e l ~ power
~ ~ industry
is at its initial stage of r e f o ~ a ~ ~ o ~are
many c h a l l ~ ~toe sbe over~ometo establish a fair and efficient power market.

The characte~~stics
~ r n ofo g ~e ~~ ~ ~~ a t
s u ~ t a ~for
le ~ h ~ n a

ity ~ ~ 6 ~inxChina
1 g originated from the r e ~ u ~ r e moef~a t1
g f ~ and
n ~~ ~ v e s ~ eThe
n t . Ps used in the uf( are not
have beea $~ggestedto d e s ~~~c~~~~~
~ ~

Power System R e t ~ c ~ and

u ~ ~~ e~ rg e ~ l ~ ~ i o


~ t e ~~ s~ ~ ca two-pm
l u p~r ~ c~~ ns g~y s ~~eThis
~ ~" section will discuss a one
~that cm
~ with
e the above
~ o t of
s e l ~ c t r ~include
c i ~ o ~ e ~ costs
~ o md
n inves
~ of e ~~ ~costs
~ involves
~ c i n~
ause operation optimisation is the basis of
r e ~ ~ a ibs ~the~ basis
i ~ ~ of determining capacity i R v e s ~ e n t
p r o d ~ c ~ osimulation
of the power system becomes one o
p r e ~ i e ~l e c ~ ccost
i ~ "71.

In order to analyse e l e c ~ i ~ i costs,

t y we should mn a ~ r o b a b ~ l ~~s tr~ Q
c d u s ci r~n ~~ ~ ~~ ~ Q R
y hour. Then we can obtain fuel costs F(d) and loss of load ~ r o b a b i l i td;~
(t = ~,2;.*,~760) - This data is the basis for cdculati
Variable costs of electricity consist of fuel costs
be re~reen~ed


e7ti., : ~ e ~ ee ar~ a c i~for

i ~~base
~ load
~ ofthe s y s ~ e ~
: ~ e n e ~ ~ci ao n~ a for
c ~
~ load of the s y s ~ e ~

K, : a n ~ rate
~ aper-unit
capacity for base load
K , : annual rate per-unit capacity for peak load


dicting generat~oncosts for each hour, the annual rate of

evenly d i s ~ ~ bamong
u t ~ 8760 h, while, the ~
u rateaof ~
~ h o u~~~ h e (r e fthe~~G~ O~S ~~of)
h be o~ ~~ s~ ~ ~~ cb o tou~ ~~~ i n ~~or e&ch
~ for hour~t is


F ( t ) : fuel cost ofthe power system in hour t

( t ):~ ~ ~ the
~ risk
( tlevel
) in, lmur 8

R A : the risk level in the investigated year


where P(2) is the system load at hour t.

The ~ a ~ cost
~ p(t)
~ of
n e a ~ ~e c for
~ hour
c ~t is~

Electric Power Industry ~

s in China


~ u ~ s~ ~~u a ~t i (72)
o ~n tinto~thenabove
~ equation, we have

in equation (7.5) can be found by running a probabilistic production s i ~ ~ l a ~To


~ ( 0

find the second tern of equation (7.51, we can use the follow in^ two methQds.
I. ~ ~ i ~ tgae ~i ~n e r a ~capaciv
~ o n ky, u ~ ~ h a and
~ gincrease
~ , I unit load for each hour,
~ o b a ~ i ~ i ps triocd ~ ~ t i os~mulation
in this situation, ~

~ ~ c ~peak
~ aload
s e c a p a ~ kt/,
i ~.
Because it is d i ~ ~ utol get
t the cost of loss load, the second way is ~ r e ~ e ~Ue d .
above ~ o n ~ e ~~ u~ a o~ (7.5)
on n can be r e ~ ~ a asn g ~

5can be ap

~ i ~ a t e found
l y by the following ~ ~ o c e as
in Fi
~ ~ ( t )
LDC in the ~~~~e is the load ~ u r curve
~ t formed
~ ~ from
~ ~ ~After~~ ) n. a n

The risk level o f ~ whole

~ e year, LOLPA,i s determined by tbe abscissa W, i~
~ 7.5 is
g the ~load duration
e curve formed by P(t) -E- hp ;here AP is an inc
duration cuwe become
C , With the same L O P A we can nd a point in ELDC, the
abscissa of which is
erefore, the section of line A r e ~ r e ~ e the
~ t sc a ~
~ f~ ~t e~ I equa~~on
o ~ ~ g
~ ~ ~ ~ eAW
i ~ Thus
e n we
t can s ~ ~ s tthe

a ~ ~ to
e r~ a ~ the~ n e~ c ei s s n~c ~ a c reserve
i ~
in[: ~ ~ ~ ~ acapaci~,
r i o nwe can draw up ~ ~ n ~with
a c ~ s
~ a p aof~ the
~ system
t ~
is not eno
; in ~e~~ these ~ o n s will
u ~
s ~ ~
af c o n ~ ~ r n ethe,
~ s ~ e n e ~ cost
a ~ s~ ~o ~onot
~ inch
l ~
cost b e ~ ~ ~ e ,

ises have their own power units and

~ o i n ~ u s er ~ a l
they do not GO
respective reserve, their electricity
q (7.8) ~ ~ so~ ~~ e ~~a q~(7.6).
~ ~ ~ ~ ~o n

Electric Power Industry Restructuring in China

0.9 1




9 10 11 12 13 14 15 16 I7 18 19 20 21 22 23 24


Xn order to supervise the market price o f electricity for the ~ o v e ~ m easily,

e n ~ we can
calculate several characteristic costs (or prices) for an interval o f a certain time, say one
week, one month of: one year.
the f
~ to ~ ~e ~the
n c~ ~ ~~~ ai ~~casts
~ ~ eefor~raat~i n~ ~t ~e of
~~ one
~c ~
is 27, and the set of s h o u ~ load
~ e ~time i s T, . The n u ~ b of
e ~h

~ are~ t , ,r t, ~an

r e ~ ~ e c tand
1, -t- I,, -t t, = 8760

~~ oc n ~s in~ the
i ~ peak,
e ~ ~s h o ~~ l ~and
~ f valley
load ~ ~ r i are
o ~A,,s A, an

r ~ s p e c ~ i ~and
e ~ yare
, calculated as follows:


Power System Restructuring

and Deregulation



If the cost of e ~ e c ~ igenera~~on

in the peak, s ~ o ~ i and
~ d evalley
~ load p e r i ~ is
~ sCp, Cs

and C, ,res~ect~vely,
then they can be found from equation (7.2) as




ence we can d ~ t ~ ~the

i naverage
cost of electricity for the peak, s h ~ u l ~and
e r valley
load p e ~ ~ as

The ~ v e cost
~ of
~ ~~ le

e for ~the year

~ isc thus~


and is,, are average marginal costs or the p

s respectively, and are c a l ~ ~from

l a e~ q~~ a~ ~ ~(7.6).
o n The a ~ e time
~ used
~ e
costs u ~ ~ ~ eforca real
~ cpower
i ~ system are s ~ ~ in
w Table

Peak load
0.402 1


Shoulder load

Valley load

~ ~ e c ~~ ~ i~
~ ~ ~i i ~ ~ ~ ~ ~~w~~
i~ ~Q~~~~
e~ r ~ -

7 the ~ ~ t i ~ electric
~ w ~ ~~~e~
d e shortage which last

As a c ~ ~ s e q ~many
~ ~ power
c e , plants suffered a 1
first t h e . T h e ~ f ~ the
r e income and ~
~ of the
n plants
e were~
of m a ~ the
n ~p ~ v ~ n cp~oa~l e cr o ~ ~ r ~ ~ ~ o
s and ~
i ihe
~ p ~ e ~ flows
e ~r alon
lly died off. Owing cap the emph

This operation obviously

The cause of such a p e ~ o ~ is~due
c to
e the pr
a m ~ ~~r Q
g vi~c~s.
Let us i ~ ~ u s this
~ ~~t reo b ~ eby
m a real ex^^^^ of the ~ o ~ hp w
~ e ~r s sy ts ~ In

~ China,
~ w
four ~~rov~ncial
s t power s y ~ e ~are
s ~n~erco~nected.
These ~ ~ o v i n c e s

Electiic Power Industry ~

~in China
~ c

i n ~ l u d~~n~~~
~ ~ n s~ui ,n ~ xand
i a i n ~ ~The
~ ~i i. ~ j ~ a
n g ~ o ~~ ey sr ~ eisman
isolated system. The ~ o source
w mix
~ of
~ the: n o ~ h power
w ~ ~system
~ iat the end of 19
shown in Table 7.4 and F i ~ 7.7.
~ ~Wee can see that in Shaanxi a d ~ i ~ ~ ~r ~ x~ ~ ~n cae s
electricity is mainly s~~~~~~~
by c o a ~ - ~power
r e ~ plants; in Gansu and ~ ~ n ~~ hr a~ i v ~ n ~
more than half the electricity is supplied by hydro power plants. Therefore9 u ~ ~
in the n ~ ~ power
w esystem
~ can
~ make a significant profit.


(a) ~ e r ~power
a l

(b) Hydro power

re 7.7 Weight of we^ ~

ai n s ~ ~a in
~ ~four

la 7,%Power source mix in the northwest power system (~~~


Thermal power

Hydro power


~ ~ a a 4025
~ i
















3 ~ * ~ % 2480









e 7.5 ~

~ 21.3%


S ~ a a Exchange
~ ~




~ ~
o f interco~ection~
i ~

Load ~~e~~


~ 302 ~

Separate Operation
~ ~ 6 D O

~ ~ ~ ~Energy
i a n g ~ 0
~ @OSc e
~3 . 4 ~~ ~ 7 ~ ~
Fixed Cost
Lmd E n e r ~
~ e n ~ r a tEnergy
x 8747
a~ 0 ~ ~
~ ~ e r ~ tCost
Fixed Cost
Load Energy
3095 I
G e ~ e ~Energy
a t ~ ~
E x ~ h a ~ Energy
~ ~ e rCost
~ t ~ o ~ I.
Fixed Cost
Totat ~ ~ ~ ~Cost
t i o 35,59297
~ n ~ ~Benefits
~ ~ o ~0 e c ~

Interconnected Operation
~ 3 5 ~ 8
8 ~ 4 5 ~

~1.78287 Q
f 8747
~~ ~ 36 D ~ ? ~
~ . ~ 9 8 ~ 4


Electric Power Industry R e ~ t ~ incChina

~ ~ n ~

Effects of prices on interconnecting benefit d i s ~ i b ~ ~ i ~ n

change shaanx~
0.7495 1



-0.005 17
0.5995 1

-0.08 107
-0.25 1 16



Transmission of electricity is becoming a separate industry ayer. A viable ~ ~ s ~ i

bus~nessis critical to a s ~ ~ c c e s compet~t~ve
electric ~ ~ k Ine the
t ~past, the
i n a ~ p r o ~ ~ends
a ~ e of ~rnphasisinggeneration, i ~ o ~ansmissjon~
~ n ~ in the el
power industry ~f China made adequacy ~ ~ s r n i s very
s ~ o oor.
~ Since the basic business
of the SP and its ~ubsidiariesis ~ansmissionthey hav a duty to prov~de~ ~ o u g h
~ a n s ~ ~ s s capacity
to satisfy the requirernen~of the power t ark et, This is a massive
~ n d e ~ that
~ ~will
~ cost
n gbillions of yuans. Where will the money come from?
The r e f o ~of the power industry brings ~ ~ s ~ i s pricing
s ~ o into
n a new
there is a g r o ~ ~ need
n g to identify the costs of ~ a n s r n ~ s ssieQ~~i c e sIn
, such a
one s h ~ answer
~ ~ dquestions such as how much i s this g~neratoror load making um of
this ~ a n s ~ ~ s line?
s ~ o nOr what p~o~ortion
of the n ~ ~ losses
o r i s~ allocate^ to this
(or load) ? olutions of these prob~emsare very i
services provided by transmission systems, and hm a direct hfluen
This section presents a comprehensive inves~igationof load fl
c o s ~ i Two
~ ~ . current d e ~ o ~ ~ o s i t axioms
i o n are first i n ~ o ~ u c easd the f ~ d a m ~ ofn ~ ~ s
load flow analysis in wheeling costing. Then rigorous math
cal models of ihe
~ e s ~ b l i s h e ~To. solve these
faGtor problem and loss allocation p ~ o b l eare
p r o ~ l e ~we
s , i ~ ~ o d u ac series
of theorems based on graph theory and a very simple and
e f ~ c a~l eg o~ r ~i ~is~developed. Finally, case studies are introduced to ~ ~ l u s ~ the
u ~ ~ ~ l nofe the
s s ~ r o ~ otheory
s e ~ and algorithrn [ 181.

Electric Power industry Restructuring in China


Current Decomposition Axioms

~ a r ~ e t - d r i v etransactions
have become the new independent decision variables d e ~ n i n g
the behaviour of the power system. Understanding the impact of bilateral transactions on
system losses is important in order to aliocate a c o r r ~ s p o n ~ nloss
g co~ponentto each
~ndividua~~ ~ n ~ a and
c ~ improve
i o ~ econom~cefficiency. One essentia~ piece of
~ n f o ~ a t ~that
o nthe biI~tera~
market needs in order to improve economic e ~ c i e n cis ~
k n o w ~ e o~ f~the
e ~ ~ n s m ~ s 5losses
~ o nassociated with each proposed b ~ ~ a~~~ ~n s~a ac l~ i o ~ .
This k ~ o w ~ e pernits
d ~ e buyers and $ e ~to~~ ~ c~o rs ~ othe
r ~level
t e and cost of Iosses into
their n e ~ o t i a i i o The
~ ~ , essence o f the pro~osedloss aI~ocati~n
~ e t ishthat~given
~ a path,
along which the ~ ~ a i ~ s a ~ vary
i o nwith
s time, it is p o ~ s i b ~toe find for each ~ ~ ~ ~ ~ ~ e s
i n ~ ~ e m e n~t ar~a n ~ ~anc ~~ st s~onc ~~~~~~e
a ~ e ~and 5 e ~ a r foss
a ~ ~~ ~o ~ ~This
~ lea
o ~ e ~ ~
to a loss ~ l l o c ~ c~ ~oo n~ ~ for
o each
~ ~ ~ n~ n~s a c tAi n~ ~~, ~ ofb c ~u r~ ~n r ~ ~ ~ for
o 5 a ~
c ~ ~ ca su s ~i ~~~~~~ ot e~nd t~ ~ tosses
~ c ~haye
a ~been ~ ~ ~ ~ f 19-24].
o e ~~~n
~ o n s ~ ~
~ we need to identify the power (or c u ~ e n ct ~o ~ ~ o n of
the ~ r o ~ I o~f w
r nh e~~ I i ncos<
each branch and allocate the effects such as losses to its componen~s~
To solve this kind of
pro^^^^ i t is not enough to use onIy Kirchhofls laws of electric circuits. ~ h e ~ e f o rine ,this
section, we introduce two axioms.
Assume the current o f branch k,
consists of L current compo~ents
1 ~ ~ ) , ( 1 l= ~ , ..,L)
. supplied by L generators,


where I(,) and I(,), are the effective or r.m.s. values of the currents, which can be either
active or reactive components. Similarly, in the following description, the term p~wer
can also be replaced by either active power or reactivepower @5].
The coiiipon~ntso f current in a branch are conservative.
The axiom states that each co~ponentI{,)[ is the same at the initial and terminal node of a


~ ~ s ~ ~factors
u ~ are
i othen same at the two nodes of a ~ r ~ n c ~ .
is obvious when we define f C k j fby cments as shown In ~~~a~~~~~

because both I(,)! and IWt ~ a ~ nthe~ same

a i values
at the two nodes o f ~ ~ k~, c h
~ o w e ~ine power
r ~ s ~ s ~ ea m
~ a ~ ywe
s ~us~ u a ~ use
I y power instead of c u ~ Thas
e ~we~ ~
~ i op~~l ~~this
v es ~ ~ ~is also
~ ~true
e when
n t we use power to defme d i s ~ i ~ u tfactors.
~ s s u m the
e v o l ~ g e at
s the initial and terminal nodes of branch k are U, and U , . Thus
the r ~ s ~ e c t i powers

Tlie powers at the W O nodes supplied by source I are

Power System Reshucturing and Deregulation

This corrcludes our proof.

e ~ r ~ of ~toss c~ ~~ i ~~on~~theaebasis
~ io fo ema
~ an^ s q u a ~ ~was
d also sug
271, i.e. the loss a l ~ o c atot ~component
current I(,,, should be calculated a6cordi~gto

The current components in the outgoing lines of an i ~ J cunene

e ~ at ~ba node
~ ~
are ~ ~ o ~ o to~the
o cnu rar ~~n ofthe
going ~ ~ n e s .
~ s s u that
~ ~total
n ~~ u n ~n~ected
e ~ ~ at nodei i s Ii, this a x ~ so ~~ ~ that
e swhen the

t ~ ~ n~ ~ ~ o
current ~ n ~ bye generator
c ~ ~ 1 ~at node i is IiZ its ~ o ~ ~c o ~ e ~~in ~

h e k is



is called a ~ l ~ ~faclor
a ~ of
i #line
~ k,

= ~~k~~~~


The whole loss caused by t r a n s m ~ ~ energy

i n ~ from ~eneratorsto a node is
called loss ofthe node. We will denote the loss of node i by Pi

rs, the loss of node i, d

$ is equal to the total loss of these ~ncominglines. To
the outgoing lines of node i we have the f o l ~ o w

The factor of n o ~ eloss a ~ l Q c atot ~an~ ou~goingline is equal to its ~ ~ ~ o c a t ~ o n


Assume that node i hasLi incoming lines all directly cQnnec~e~

~ ~ n ~then
~ the
~ loss
~ o f rn ~s i~~
i se

i ~ lines
g of node i are not all c

~to the
~ g ecn e ~t t o~e~ $ ~~

the r ~ ~ s i rve aes o ~ n

As ~ c n ~ above,
~ ~ there
n e are
~ rkvo ~ ~ o b l e m
to load flow a n ~ ~ y ~ ~ s
, namely the ~ i s ~ i bfactor
~ t ~problem
~ n and the loss ~llocatio~
the ~ i s ~ ~factor
~ ~~ ~~ i b5 ln e ~ .
For a s p ~ ~o i~ ~e e~ c~ao ~n ~~ ~gof
Q an ~ Q w e~r y ~one
~ can
e o~ , ~the t
Ihe or ~
~ by a loa s
e d i s ~ ~ ~ ~factors
t i Q nof each g ~ ~ ~ r afor
t o er
s N nodes, N , gene~at5rsand N, branc
ctars d e ~ n by
~ de q ~ t i ~o7~. 1 $ ~ ,
&E the ~
c ~ ~
o n ~~ i e ~ ~~ ~
~ ~ e ~1afor~~Q r r k i s ~
~ c o ~~~ o nee in
n ~o~tgoing
~ lines at
their c ~ ~ ~asnshown
~ s in
, equa~~on
vo~tageat node i yields

e n e r a 1~can
~ ~be c a l c ~ ~ ~ ~ e dation (7.21). To do

Power System ~

5 and ~
Dere ~


= [PiG,P? >.
*. ,P,G f'

is the vector o f ~eneratQrpowers and

S 9 Pz 9 *.*, P, I'

is the vector o f total node injee

elements of which are defined by

r, (i)


is the set o f the outgoin

b r a ~ ise ~~ Q W hence
~ ; the eIeme~ts
us i l l ~ ~ ~this
a t with
a simple p
have the f Q l ~ Q wrelationship:

ove ~ a t h e ~ a t ~model
c a l is ~ ~ o r Q uand
s , does need not to ~ ~ thev ase
l~sslessbranch as adopted in [25].

A circuit ~ ~ a g r afor
m simple power systems


Electric Power Industry R ~ ~ c in~China

~ n g

equation (7.26~we can obtain the c o n ~ b ~ t i o nf each generator to the total

r at each node from the following equation:
B", = -1

Thus the con~ibutionfactors can be readily calculated by equation (7.25).

After getting f ( k ) iwe
, can further allocate the loss of the transmission network to each
generator by the f o l l o w i ~equation
according to equation (7.2 1):

is the loss allocated to generator 2.

~ Q w e v ethe
r ~ loss allocation robleni can be an independent problem. ~ h ~ r e f ~
need a ~athematicalmodel for
problem to allocate loss to each load or each gen
To allocate the loss to each load, the key step is to calculate the losses of
~ j ( j ~ 1 , 2 , . . . , N ) . consists of two parts, as follows:

Firstly, the sum o f loss APg in the incoming line i j E

( j ), where

r- ( j )denotes the

set of the in~ominglines of node j . S~cond~y,

the loss of @, allocated "CO line ij

which can be calculated according to equation (7.24). Note that k

balance equations are as follows:


i j E l?-

(9) . Tbe loss


where ai(k)is the al~ocationfactor d e ~ n e din equation (7.23). For cQnve~~ence

we can use
the following form to determine

Here E";:L is the load power at node i .

Equation (7.3 1) is a linear equation system including N unknown variables o q , which
be solved by a conventiona~ a l g o ~ t ~After
equa%ion (7.31) for
( i = 1,2,... N) loss allocation to the load at node j is then
13 I.


We can use a similar approach to foimulate the problem of allocating the loss to
generators. Based on the discussion above, we may conclude that to solve the di
factor or loss allocation pro~lem,we should first build and solve the linear
equation (7.26) or equation (7.3 1). However, this approach is not ef~cientand not flexible,
We will develop a very simple and efficient algorithm by means o f graph theory in the next

Power System ~ e ~ ~ cand~~ er r ei ~nu l ~a t i o ~


graph is a directe graph. At this stage, the direction of each

the direction of its ctive power flow. Each b r ~ c has
h its initial
while each node has its outgoing lines and ~ n c Q n ~lines.
i n ~ The
number of outgoing lines at node i is denoted by d+(i),the n
above^ the set of outg~inglines is den
lines by r-(i). A directed path is formed along the direction of
d terminal node o f a directe
are identical, we
to denote the resistance, r ~ a ~ ~ a n c e ,
er flow of branch k, and
If the

follow in^ reIationship holds for each branch alon

T in a load flow ~~~h~

then there exists no directed circuit in the graph.

e use the methodo~og reduction to absurdi~.If the~eexists a
dB(k, = 0



where AB(,, i s the phase angle ~fferenceb e ~ e the

e ~two nodes of bran~hk, and can be


equation (7.35) take the values at the terminal node of branc

k ) , then

b6,k) > 0, and

exist in this situation.

ns. In case there i
ch is certainly negl
When a directed graph has no dir~ctedcircuit, there are at 1
tidy d+(i)= 0,and d- ( j )= 0 respectively.
~ s s d,~ (i) ~> 0e holds for all nodes, i.e. each no e has at least one out
out from any node q , we can travel to the n ~ x nt
from n2 we can travel further to n3 by similar reasonin
Thus there are only two p Q s ~ ~ boutcomes:
one is that we ~ a v in
~ m p o s s i ~for
~ e a finite graph; the other is that there exist dire
the c ~ ~ d i tofi othe

Electric Power Industry R e ~ t ~ c in~ China

~ n g

larly, we can prove the other half o f the t~eorem.~ o m b ~ i n g

h, there exists at least one node without an outgoin

and one node without an i n c o ~ line.

e i is a node with d-(i) = 0 on a load flow gra~hs.The ~rocessof

d its out go in^ lines r+( i ) is called the e l i ~ ~ ~ ~ afor~noi n ~ p ~
ow graph, a111 branches can be eliminated t ~ o u a~ recu~sive

raph by Y, and the b r ~ ~ h

at least exists one node i,
a out an
~ e l i ~~i n a t i nnprocess
~for node i l , we get $ubgraph El'(
cted circuit. Hence, there exists at
can carry out an el~minationproce
so on. Thus we can e ~ ~ m i ~ all
a t ebranches by a finite (less than
elimination ~rocess.
lain the e~iminationpr~cessby a simple example, as
raph has no directed circuit, and d - (1) =
lines 1, 2 and 3. A ~ eliminatin
e ~
7.9b, in which d"-(2) = 0. The
e l i m i n ~ node
t ~ 2 and its out
and its out go in^ line 5, and thus w
the above e~iminat~on
cessively e l ~ r n ~ ~
m e s s can also be carried out by $uc~ess~ve~y
eiim~atingthe node with d+(i)= 0
its ~ n c o lines
~ ~ ~ g The co~esponing d e ~ n i t i o nand
~ t h e o r ~ mare
~ s i m i ~ ato~ the
discussion above.


~ r o b ~ofe load
~ s Raw anaiysi
below, we will use PDF and P
location problem respec~ively~

Power System ~ e s ~ c ~and

i n~ ge r e ~ ~ ~ t i

i by equation (7.25).

LA: Calculate loss allocation to the load of node i by e ~ ~ a (7.33).

~ ~ o n
Do the follow^^ for all j , ij E (i).
F: Transfer the power of each generator at node i to nodej


bji is defined by equation (7.27).

the loss of node j , Pj,according to Equation (7.3 1).

indicating that the node has been eliminated.
. Search for the next node without ~ c o m lines,
~ ~ until
g all
are ~limina~ed.
can imil~lyin~oducean a l g o ~based
t ~ ~on e ~ i ~ i n a t i n~gn ~ o m i nlines.
g In this case,
cal~ulatedresults for PDF are the d i s ~ i b u t i ~factors
of ~ r a n c ~ used
e s by loads; for
losses are allocated to generators.
no~hwestpower n e ~ o r kis calcu~atedby the ~ r o p o aigori
cost. The data used in the case study is real exchange p
i provinces dated I6 January 1998 as shown in Figure 7.10 a, The
n in T ~ ~7.7
the wheeling cost paid by Cansu province as
l eand
Figure 7.10 b. The calculation results are the wheeling cost paid
shown in Table 7.7 and Figure 7.10 b. In Table 7.7, sum of wheel
y in the table refers to the energy loss cost, Capaci
erator capacity to compensate power loss, while Line9refers to ~ a n s ~ i s s i o n
, The average wheeling cost of the day is 0.0247 yuanlktlrh.

This chapter has described the Chinese power market that is an embryo
which the state retains ownership of the generator and some of
i n f ~ s ~ cbut
~ is
~ ~pening
e ,
up the market to limited c ~ ~ p e t i t iEle
transmission loss methods have been proposed and examples of a simplified Chinese
power system have been used to demons~atethe advantages derived from such ~ e t h o d s .

uppo~edby the ey Project of ~ a t i o n a~cience
China. The authors would also like to thank IEEE for granting permission to reproduce the
~ a t ~ r i aclo~ t a ~ n in
e dreference [ 181.

Electric Power ~ n d u s structuring

in China

%e7.7 Wheeling cost for Shaanxi and Qinghai power exchange




Line Using



0.1 1



33 1




- 30






m e l i n g Cost ( p a n I kWh)
0.01 1
0.01 I
0.01 1










0.0 I7


0.0 17


0.0 14
0.01 1



~ . ~ 2 2

S.Q. Gao and P.L. Chi, Several Issws Arising During the Retracking of the Chinese Economy,
Foreign Language Press, 1997,
J.P. Sun, Electric Power Industry in China 1999, China Electric Power Information Center.
W. Sweet and M. Hood, Can China consume less coal?, IEEE Spectrum, Vol.36, No.11,
November 1999, pp.39-47.
M Hood and W Sweet, Energy policy and politics in China, IEEE Spectrum, J01.36, No. 1 1,
November 1999, pp.34-38.

. .-





9 10 11 12- 13
14 15- 16 17 1
- -..

~ e e l ~ ncost
g for $ ~ a ~ and


the Electric P o w e ~ I ~ d ~1998,

s t ~p ,p . ~ ~ 6 " 1 4 1 ~
Shi Yubo, 'Take vigorous action to promote power industry's reform and ~ ~ v e ~ o p ~
~ ~ i Power
~ f fE ~ ~ e~ ~Q ~ ~ ~ Qs No.1,
ge e 1999,
~ e pp.7-8.
~ ~ ~

Electric Power I n d u s ~ e $ ~ ~ c ~in rChina


[lO] Zhang Shaoxian, Clear up reform i as and initiate a new chapter o f p ~ f e s s i o n a ~

~ ~ a g e m e n tChina
, Power Enterprise ~ a n a g e ~ e nNo.
t , 1 1, 1998, pp.4-5.
[ l l ] Ciao Uan, On the second step reform o f the State Power Corporation o f China, China
~ a n a ~ e ~N0.2,
e n ~1998,
, pp.4-5.
[12] Lu Yanchan~,A ~ e ~ ~ d e ~ tabout
a n ~then simulated
power market practice, Chinina
Ente~prise~ a n a ~ e ~No.4,
e n ~1998,
, pp.8-9.
[I31 Wang Yoii~ian, Strive to accomplish two reform in thee years and basidly feaIize equal
China Power Enterprise ~ i n a n a g ~ ~ No.
e n t 12,
, 1998, pp.16-18.
books on energy pricing, IEEE Spectrum, Vo1.36, N0.12, ~ ~ c ~ m b e r
1999, pp.59-63.
sector decision making in China, IEEE Winter Power ~ e ~ t ~ n

rprise ~ ~ n a g eNo.
~ 1,z 1999,
~ ~ pp.
~ 16-1
, 8.


CXgiRE Task Force 38.04.03, ethods and tools for transmission costs, Elech, No. 174,
~ c t o b e 1997.
services by the end user Case
n p r o ~ d i~ngt e r c o ~ e c t eopera~ions
tioopral Science ~ o u n ~ a t ~
aliana and Mark Phelan, Al~oca~ion
of transmission losses to
in a ~mpetitiveenviro~ent,IEEE Transac~ionson Power stem^, Vol. 15, No. 1, ~
2000, pp.143-150.
Tomas G o ~ a l e zGarc~a,and
er losses, IEEE Xra~sactionon
nd load distflb~tionfactors for supple me^^ c h a r ~ e
o n Power
S y s t ~ ~Vol.
s , 12, No.3,
a l l ~ a t i o nin ~ ~ s ~ i s sopen
i o naccess, IEEE ~ r a n s a ~ t ~ on
1997, pp.l189-1193.
L.L. Lai, J.T. Ma, N.~ a j ~A.~~ a~ ~dand
,a ,
efficient a l g o ~ ~ h mfor
s ~ a ~ s m i s s i o10s
~ n ~ ~ r n a t i ,Iournal
o n a ~ afElectric Power and Enerm Systems, Elsevier Science Ltd, Novem~er

Prof. Vijay K. Sood


In recent years, major changes have been introduced into the s ~ c ~ofr electric
utilities all over the world. The reason for this was to improve ef~ciencyin the
the power system by means of deregulating
industry and opening it
e~tion.This is a global trend and similar
ctural changes have o c ~ u ~ el~ewhere
in other industries, i.e. in the teleco~unicationsand air~ine~ ~ s p o r t a ~indus~ies.
net effect of such changes will mean that the ~ansmissi5n~
generation and dis~ibution
syst~msmust now adapt to a new set of rules dictated by open r n ~ ~ eIn~ s .
sector of the power utility, this adaptation may require th
~ o d i ~ c a ~ iofo ninterconnections between regions and countries. further more^ the
ptation to new generation patterns will also necessitate a ~ p ~ t i and
o n require in~reased
xibility and availability o f the transmission system. Addin to these problems has been
the growing env~ronmen~al
concern and constraint upon he righ~s-of-way for new
i n $ ~ l a t i ~ and
n facil~ties.Yet further d e m ~ d are
c o n t ~ u a lbeing
l ~ made upon u t ~ ~t i ~ ~ e
supply increased loads, improve reliability, delivery energy at
with ~ ~ ~ power
~ ~
v The
e dpower industry has respon
the ~ e c ~ o l oof~ flexible
AC ~ansmission systems or
e n c o ~ ~ ~ sas whole
family of ower electronic controll
achieved maturity within the industry whilst some others are as yet in the design stage.
FACTS have been d e ~ n e dby the IEEE [4] as:

Flexible AC Transmission Systems (FACTS)

A power efectroiiic based system and other static equipment that provide control of one or more ac

transmission system parameters to enhance con~ol~abi~ity

and increase power transfer capability.
For m a ~ ~ u f a c ~ rofe relectrical
equipment, this challenge provides an o p p o ~ n i t yto build
equipment that is reliable, flexible and relocatable since planners now d e m ~ dr
adaptation to c h a n g ~ gsyste
FACTS rely, to a large
upon advances made in power electronics (PE) and
microprocessors. The PE tec
,well known in low-power industrial applications, has
now migrate^ to hi~h~power
utility applications because of the economical availability of
reliable high-power switching devices (i.e. thyristors, GTOs and IGBTs). Note that
developmen~sin other related areas such as communication systems (using fiber-o
etc.), super conducting materials for energy storagc and metal oxides for surge arrestors
will also play important roles in the continuing growth of FACTS applications. This
t e c ~ o l o g ywill impact on all aspects ofpower system operations, for example, in:
generation systems (i.e. from hydro, thermal, wind or photovoltaic means),
storage systems (Le, by conversion of energy from AC to DC, DC to AC,
transmission systems (i.e. by the rapid control of system parameters such as voltage,
current, imp~danceand phase angle),
dist~butionsystems (i.e. by the rapid circuit or current i ~ t e ~ p t i ofor
purposes), and
consumer systems (i.e. by the power conditioning of consumable energy).
F a ~ i c u l ~for
l y transmission systems, FACTS technology offers the f o ~ l o w i n~ossibilit~es:

Greater control of power, so that it flows on the prescribed ~ ~ ~ s m i s sroutes.

Secure loading (but not overloading) of transmission lines to levels nearer their
thermal limits.
Greater ability to ~ r ~ ~power
f e r between controlled areas, so that the
reserve margin typically 18% may be reduced to 15% or less.
of cascading outages by limiting the ef3ects of faults and equip men^ f a i l ~ e .
ampi in^ of power system oscillations.


Static var compensators (SVC) is an example of a mature FACTS applica~io~.

Other more
novel ap~lications(i.e. STATCOM, UPFC) are being developed and tested to provid~
increased flexibility, enhance stability arid transmission capacity in the operation of power
systems. The present environment of deregulation and constraints on building of more
provide compelling reasons to develop FACTS c o n t r o ~ ~The
~ p r o v e m e n tof a deteriorating power quality will be an additional focus for FACTS
controllers of the future,


Benefits of FACTS Technology

The two main objec~vesof FACTS controllers are:

to i n c r e a ~the
~ power transfer c a p a b of
~ tr~smission
networks, and


Power System Restmcturing and ~ ~ r ~ ~ l a

ravide direct control of power flow over des~gnated~ r ~ s m i s s routes,

ible AC system owes its tighter transmiss~oncontrol to its ability to m
ated parameters that constrain todays AC systems, ~ ~ c l u d i nsg
e, phase angle and the ~ c ~ ~of~osc~~~ations
n c e at various ~ e q u e n c ~below
rated ~ e ~ u e n c y .

Power flow over a transmission system is limited by one or more o f the f o ~ l o w i n[4]:
system stability,
loop flows,
1 limits of either lines or terminal equi
hart circuit level limits.
itations on power transfer are primarily
inter re~atede ~ e c ~ parameters
including vo
reactive and ~ t i v power.
~igh-speedcontrol of any one or more of these parame~erswith
E controllers will enhance the value o f AC transmission assets. liminary studies of
several ~ y s t e have
~ s shown that FACTS controllers can provide economic sol~tionsto
some of these p ~ o ~ ~ e m
A $discussion
of each of the above-~entio~ed
provide^ next.

This r e q u ~ e sthe power system to retain a margin o

~ystemand still main~ains ~ c ~ o n iSin
nd are able to eontrol the
for avoiding the addition ofne
traints [4] could be hrther spli
i ~ i t ~ few
a l seconds after a major p
rove the performance by the use of, s
exci~ationsystems and the implementation
t ~ m p i concerns
n ~
the ability of a
ns once initiated by a small disturb
include power system st

er system to ~ a i n t asi y~n c ~ o ~ i sfor

ion. A n u ~ b e rof e~ample
lled series capacitors, high

it describes the situation when the next i n ~ e ~ ofe load

~ t
causes a voltage collapse in the power system. This v o l ~ g ereduc~onis g
occu~ingover time periods ranging from many secands
that are used to improve VSL, include operator action, a
~ o ~ p e n s a t i ogenera
to^ or sync nous ~ o n d e n s ~and

Flexible AC T~ansmissionSystems (FACTS)

-sync~onousresonance (SSR) is due to interactions b e ~ e e nthe seriescompensat~dAG power ~ansmissionsystem and torsion v i b ~ t i o n
g e n e ~ t o runits. This issue is dealt with by cons~ainin
that desired for
c o ~ ~ ~ n sp ae t~ ~i ~ to
e~ disafe limits; usually this level is
system security. A p p r o ~ h e sthat are used to improve SSR condi
of series capacitors d u r i n ~unsafe operation^ passive series blo
tor exci~ationor SVC on the generator bus. Ge
lied to c o ~ any
e ~u n e ~ p ~ c t contin~enci~s.


Loop Flows

ows occur as an unwanted result of the operation of the interconnected ~ a n s m ~ s s ~ o n

are dictated by e l e c ~ i c acircuit
laws (i.e. Ohms and ~ r c h h o f laws).
~ s These
at steady state where the undesired loading affects the v
n of thermal or stability limits, These effects are address
or by series capacitors. The new FACTS c o n ~ o ~ l e r s
ver, since speed of opera~~on
is not a major c o n c e in
~ this
problem, c o n ~ o ~ ~will
e r sbe justified onIy if .frequent a d j u s ~ e n are
~ s require

o ~
by a c o ~ b i n a t ~ oofn genera~orreactive
V o ~ t a c~ eo ~ is~accomplis~ed
fixed or mechanica~ly s w ~ ~ c ~reac~o~s~ca~acitors
and m e c ~ a ~ ~ c a ~
~ a n s f ~ ~ e~~~t
r s . reactive equipment is used for coarse control while the ~ e n e ~ ~ ~ o r
prov~dev e ~ i con~ol.

Thermal limits are inherent in ~ansmissionsystems owing to both line c o ~ d u c ~ o ~ ~

series equipment (i.e. ~ a n s f o ~ e rreactors
and series capacitors). Trans~issionlines
ope~atedbelow these limits to provide s e c u in
~ the
~ event of a
role of FACTS c o n ~ o ~ ~will
e r sbe to use this inherent thermal capacity in a more e f ~ c ~ $ n t
and secure manne~.


High ~ ~ o r t - ~Level
i ~ Limits
c ~ ~ t

The p r o ~ ~ eofmexce$sive s h o ~ - c i r c ulevel

~ ~ can be quite difficult and expenive to c o ~ e c ~
dition is made to the ~ a n s m i s s i ~system.
This can result in
levefs c r ~ e ~ i up
n g in sub-~ansmiss~on


Power System Restructuring and

The IEEE definition of a FACTS controller is:
A power electronic based system and other static equipment that provides control of one or more ac
transmission system parameters.

The technology concerning FACTS is well known in the low-power industrial applications
field, but is relatively less well known in the utility power field. This technology is
intimately concerned with developments in the follow~ngtwo areas [S]:
Power electronic switching devices and pulse width modulated (PWM) converters.
Control methods using digital signal processor (DSP) and ~icroprocessortechnology.
Developments in both areas are advancing rapidly, and need to occur further before
a~plicationsin the power utility field appear econo~callyattractive. App~icationsof PE in
the power utility field still need further research in the following areas:
active harmonic filtering and reactive/active power support,
single-node or area-wide application,
c~mpensationof non-linear loads, and
transient performance of the controller.


Power Switching Devices and P WM Inverter

Of the switching devices presently and potentially available within the near future (next
>,the gate turn-off (GTO) thyristor and IGBT are the most promising. However,
in the longer future (10 years), competition for these switching devices will occur from
o nthe various ~ o w e r - s w ~ ~ h i n g
~ ~ S c o n ~ othyristor
1 ~ e d WCT) devices. A ~ m p a ~ s of
devices is presented in Table 8.1.
wever, owing to the higher switching losses in G
devices, the ~ a x ~
e , to
ng frequency operation is limited to less than about 1 z. F u ~ e ~ o rowing
the switching and drive characteristics of the device, it has
been feasible to operate
devices in parallel for high power applications. Some limited success in the series
op~rationof devices has been reported, but again this remains a l~mitation~
r increasing the rating capability of a FACTS converter
on appears to be the use of several converters op
hing frequency presente~to the total filter can als
shifting the switching functions of individual inverters, and by
converter ~ a n s f o ~ e rAs new
, possibility exists with the use of ~ulti-levelconverters.

Flexible AC Transmission Systems (FACTS)

Max. voltage
rating (V)
Max. current
rating (A)
drop 0')

















1 .a


















voltage rating

target max.
current rating


: Gate Turn-off thyristor


: Insulated Gale Bipolar Transistor

: Static Induction thyristor
: MOS-controlled Transistor
: MQS Field-effect Transistor.

Two versions of switching converters are feasible depend

storage device utilised is an inductor or a capacitor. When the storage device is an inductor,
the converter is called 8 current source converter (CSC); when the storage device is a
capacitor then the conve~eri s called a voltage source conve~er(VSC). A n~ticeable
change in converter topology usage will be the increasing use of VSCs instead of CSCs
used in traditional HVDC transmission. The VSC will find applications in advanced static
var co~pensators(ASVCs), active filters, S T A T C Q ~ etc.
~ , The main reasons for this
change are that VSCs are smaller and less expensive than CSCs; ~ ~ h e ~ oVSGs
r e ,are
expandable in parallel for increased rating. A brief comparison between VSCs and CSGs is
given in Table 8.2.

Power System Restructuring and Deregulation


le 8.2 Comparison of current source versus voltage source converters

Current source converters

Use inductor L for DC-side energy storage

Voltage source converters

Use capacitor C for DC-side energy storage

Fast accurate control
Higher losses
Larger and more expensive
More fault tolerant and more reliable
Simpler controls
Not easily expandable in series

Constant voltage
Slower control
More efftcient
Smaller and less expensive
Less fault tolerant and less reliable
Complexity of control system is increased
Easily expanded in parallel for increased rating

T r a ~ ~ ~ ~power
o n a lconverters used line-commuta~edthyristors as their active switch~ng
elements, but next-generation converters will exploit self-commutated CTO thyristors in
the near-term future, and will probably exploit lGBT and/or MCT devices in the long- re^
future. The basic PE building blocks will comprise either the:

anti-paraIIe1 thyristors which will be used to control irtduclivelcapacitive i ~ p e d a n ~ e s ,

six-pulse CSC or VSC unit, employing multi-level operation (with or without multihase ~ ~ s ~ ~to increase
~ e r thes pulse
) number (up to 48 pulses), to reduce ~ a ~ o n i c
~eneration.The basic switching elements will be the anti-parallel G ~ ~ ~ ~ori o d e
IGBT-diode unit,

Control ~ e ~ and
h Do~ P~/ ~ ~
i c r ~ ~ r ~ cTechnology
Control eth hods based on either the time or freque~cydomain are feasible. These ~ e q ~ i $ e
i n s ~ n ~ n e o monitoring
techniques and complex computation of switching ~ n c t i o n sfor
the firing of the converter switches. A comparison of the control methods in the two
d o ~ a i is
made in Table 8-3.
Comparison of time domain versus frequency domain comp~nsation

~ r e q u e ~ dc ~y m a i n
Fast response

Easy to implement
Computa~ionalburden is low
Ignores past periodic characteristics

Slower response
Complex measu~ementsand analysis
Computational burden is high
Depends on periodic characteristics of d i 5 ~ 0 ~ i o n

wing to the complex switching functions required and the c o ~ ~ ~ ~ ~ tburden

necessa~,exten~iveuse of DSPs and microprocessor technology will be required in a
power system environment. Utilities have some experience with HVDC ~ e c ~ o l oSVCs
rotection relays which use microprocessor-based controls. However, the
application of FACTS devices is likely to be at a greater level of complexity than anything

Flexible AC ~ r a ~ ~ ~ i sSystems
s i o n (FACTS)
known previously within the utility environment. This will require careful considera~ions
of r e l ~ a b i land
i ~ ease of use within the utility environment.


F ~ e s ~e ~ ~t on ~ACT^~ Activities

EPRI of the USA has been promoting a program (EPH Project 3022) on FACTS for some
years [ 11. A number of special conferences on this topic have been o r g ~ i ~ by
e dE
these conferences comprise, by far, the largest effort on FACTS-related literature. Since
the last five years or so, IEEE and CIGRE working groups have also become involved and
are being reported in their literature also.
FACTS have been with the power industry for many decades in the form of SVC and
other applications. However, it is only recently that these applications have become
classified under the b ~ ~ a d - bheading
a s ~ ~ of FACTS controllers o f the power system.
FACTS technology is not a single, high-power electronic controller, but rather a
collection of controllers, which can be applied individually or collectively in a specific
power system to control the intenelated parameters that constrain today's systems. The
thyristor (either line or sclf commutated) is their basic switching element; however, in one
particular application called the interphase power controller, no active switching device is


n Concepts
~ ofa~~ansmission

A simplified example of power flow in a loss-less transmission line, with inductive

impedance X,, c o ~ n e ~ ~two
i n gac systems with voltages V , and V, is shown in F i g ~ r e8.1.
The transmi~edpower P is given by equation (8.1) and also shown in the figure. From
equation (8.1) it is evident that power flow can be controlled by varying 5, Y,, X, or the
angles 6, and 6,:
P = (V,. VJX,) sin(&,- 6,)

.1 F u ~ ~ d ~ r n eonf AC
~ l spower transmission

Transmitted power P can be regulated by control of any system parameter by a FACTS

controller, or any combination o f controllers, as indicated in Table 8.4.

Power System Restructuring and Deregulatbn


.4 Control of system parametersby FACTS controllers

Voltages V, and V,
Angles 6 , and 6,

Phase angle regulator



The FACTS app~ica~ion

have been split into the fo~~owing
categories d
their mode of operation:
Control~erswhich act in shunt to the ~ a n s ~ s s i system.
Controllers which act in series to the tra~smiss~on
Controllers which act in a s e ~ e / s ~ ucombination.
Controllers which alter the phase angle between voltage an
A special category which encompasses HVDC controllers and any remaining
Details of these various c a ~ g g o are
~ ~provided
in the following sections.


Shunt Controllers

reactive power com~ensationsince the mid t

for arc furnace flicker compensation and then in power ~ansmissionsystems
first 40 MVAr SVCs was installed at the Shannon Substation o f the ~ i n n e o t
ystem in 1978. At present some 300 SVGs with an installed capacity of 4~,000
s are in service all over the world. The SVC results in the ~ o ~ ~ o bwe inne ~~ [S]:
voltage support,
transient s ~ b ~ lim~rovement,
power system oscillation damping.
A l ~ ~ o u gmany
versions of SVCs exist [9] (i.e. variants are TSR, TG
common one (Figure 8.2a) usually employs (either thyristor or mec~a~ically)
capacitors and ~ ~ ~ s t o r - c o nreactors
~ o l ~ e(TCRs).
With an appro
the capacitor switching and reactor control (Figure 8.2b), the var
and rapidly ~ e ~ ~apacitive/inductive
~ e n
values. It maintains the steady state
and dynamic voltage at a bus within bounds, and has some ability to control stabili~,but
not much to control active power flow.


Flexible AC Transmission Systems (FACTS)




Conanuous Inductive R%ng


fig^^^ 8.2 (a) The SVC and (b) its V-I characteristic

S ~ a t ~ cQ n ~ ~ (ST
e ~ s ~ t o ~
The S T A ~ aCsolid-state
~ ~ ~ voltage source inverter coupled with a transformer, is tied to
a transmission line. A STATCOM injects an almost sinusoidal current, of variable
m a ~ i t u d eat
, the point of connection. This injected current is almost in quadrarure with the
line voltage, thereby e ~ u l a t i ~ang inductive or a capacitive reactance at the point of
connection with the transmission line. The hnctionality of the S ~ A T C Omodel
verified by regulating the reactive current flow through it. This is useh1 for r e g u l a ~ ~the
fine voltage.
An advanced static var compensator (ASVC) [ 101 using a voltage source inverter (VST)
is shown in Figure 8.3a and its V-i characteristic is shown in Fi
8.3b. The VSI is
storage capacitor to generate an output AC voltage V,. When V, equals
AC bus, the VSX draws no current; when Vo > V, the current drawn by
the leakage impedance of the transformer is purely capacitive. On the other hand, when V,
< V then the c ~ e ndrawn
is purely inductive. The ~ n c t ~ o npael ~ o ~ a n ocf ethe A
superior to the t r ~ d ~ t i o nSVC.
Tran smmion 1ine

pu Voltage
Couptiiig *amformer

DC storage capacitor


Figure 8.3 (a) STATCOM application and (b) its I/-I characteristic


ive Rating

Power System ~

The ~

~ and
c ~ e~ r ~n ~ ~l a ~ i o n

~ isValso C
superior to the conventional SVC for the fo~lowingreasons:

eduction in outdoor area requirement, since it replaces the ~ o l u r n ~ ~ o ~ i s

capacitor/reactor banks associated with a conventio~alSVC.
roved dynamic p e r ~ o ~ and
~ c enha~ced
s ~ b ~due
l ito~its a ~ ~to i~ ni ~~r e a s ~
siently tbe var generation.
roved p e r f o ~ a n c eat low operating vo~~ages
down to
by t r ~ $ f o ~leakage).
Reduced need for AC filters.
ve r e f ~ e dto the ~ ~ O - ~ system
a s ~ as
functional operation of this device is, howe
ous condenser, but without the slow response t
i n e ~ i aand so it was briefly own as the Static Sync
ent practice is to refer to these as STATC
generates a three-phase volt
a reactance. When the AC
(lower) than the bus voltage, the current flow is cause
eS how ~ u c h
~ u ~ flows.
e n ~This allows the control of

on and to prod~cepra~ticallysinus0
is s

re effective than the SVC in providing voltage support


FIexibIe AC ~ ~ s m i s s i Systems

Acts as a voltage source behind a reactance

Insensitive to transmission system harmonic

Was a larger dynamic range
Lower generation of harmonics
Faster response (within ms) and better
performance during transients
Both inductive and capacitive regions of
operation possible
Can maintain a stable voltage even with a
very weak AC system
Can be used for small amounts o f energy
Temporary overload capability translates
into i m u ~ o ~ evoltaae

Acts as a variable susceptance

Sensitive to transmission system harmonic
Was a smaller dynamic range
Higher generation of harmonics
Somewhat slower response
Mostly capacitive region of operation
Has difficulty operating with a very weak
AC system

,based on IGBT switches, and capable of operating at s w i ~ c ~ i n g

been developed. The core parts o f the plant, compris~n
s, control system and the valve cooling system, are fitted into a
of 10x20 rn. The outdoor equipment i s limited to heat
utation reactors and the power transformer. A rating o f rl: 100

container with a
exchangers, air-c
Mvar per converter i s availab~e~
in case of increased rating, multiple units can be operated
in parallel. The modular design makes it easily relocatable to another site when desired to
meet hanging s y s t e ~needs.
~ The response time of this unit i s very fast (about o n e - ~ u ~ e r
cycle). As a result of its high switching frequency, the plant can operate without h a ~ o n ~ c
filters, or may only require a small high-pass filter. The risk for resonant condit~onsis
heref fore negligible. ~ u r t h e ~ o rthe
e , possibility of active filtering of h a ~ o n i c salready
on the network makes this an attractive choice.

mat~hingthe ~ ~ r ~ i
mechanical power and the generator electrical power during system faults. This can be
~ ~ a series or shunt braking resistor. Shunt resistors are p r ~ ~ e r a b ~ e
done by i n t r o d u c ~either
because they are less expensiv~and easier to coordinate in a system with any
and lines. Moreover, a hun~-connecte~
thyristor-controlled resistor with a radial
transm~ssionline can be used effec~~ve~y
to damp power swing oscillations [13] in a
transmission system.
These systems are esigned to provide post-fault AC system speed control by
compensatin~for fault accelerating power by dissipation in a shunt resistor. A pair ofbackto-back ~ y ~(Figure
~ s8.4)~ does
o the~ application of the shunt resistor, The application of
braking resistors should take place as soon as possible after fault detection and they should
not be switched out until the derivative of the swing curve becomes negative. The ~atingof

Power System R ~ s ~ and

~ D c~ ~~l a nt i o~ n


the resistor should be such that the kinetic energy injected by the fault sho~ldbe
before the generators slip the first pole.

.4 Dynamic brake application

The ~eliabilityand effectiveness of braking resistors have been demons

different projects:

PA's Chief Joseph substation, 1400 MW, 3 seconds, 230 kV system;

C Hydro's G.M. Shrum substation, 600 MW, 20 seconds, 138 kV sys~em;
3. Argentina El Chocon Project.
asically LT changers regulate the output voltage when subjected to variations in the input
voltage due to c h ~ g i n gsystem conditions. M e c h ~ i c aversions
were used widely in the
i n d ~ for
s ~many years. These mechanically operated load-tap hanging transfo
now have t h ~ ~ o r - o p e r a ~switches
(Figure 8.5) to do the same function faster [14]. This
permits the improvement of system stability and damping of the power system osci~l~tions.

High speed static tap changer

use a super conducting coil

acts as a b ~ f f e rbetween the
power generation and load consum~tionand aids in the load levellin~and
matching (within a few cycles) of the two, enabling a greater control and flexibili
power system [IS]. The benefits o f energy storage systems are offset by the
losses of s t o ~ n genergy. The round-trip efficiency of a SMES system is claimed to be
90%. The SMES coil is fed by a current source GTO inverter h m the AC
n required, the SMES can supply transient active or reactive p o w e ~to the AC
supply to support it. The technology holds promise for improved en
d flexibility to meet peak utility system loads. A multi-temi
to act as a power flow control device also [6,7]. A fairly rec

Flexible AC Transmission Systems (FACTS)


suggested the use of a SMES system for SSR damping of turbine generator units. A SMES
unit has been in com~ercialuse on the BPA system.

I Superconducting

~ i ~ M 8.6
r e SMES operating principles

imilar to a large uninte~ptiblepower s~pply.A

VSC connects the DC battery to the AC system. Such applications provide load-levelling
benefits and act as a spinning reserve on islanded networks. Modulation o f the 10 MW
BESS at Chino has increased the transfer capability from Arizona to California by several
hundred megawa~s.
Battery storage has been applied at a number of locations including:
an 85 ~ ~ / minute
3 0 system in ~ e ~in~1986,
i n
a 10 MW/4 hour station commissioned in Chino, S . California, in 1988 [17], and
a 20 MWI4 hour station commissio~edin Puerto Rico,


Series C o ~ t r ~ l l e ~ ~

g AC lines for increasing line loa~bility

has been known for a long time. Adding a isto tor-controlled series capacitor (
however, is a more recent pheno
and provides greater flexibility in
ission line impedance continuously
~ a n s ~ i s s i oAn .TCSC can vary the
below and up to the lines natural
to force power flow along a contract path.
The advantages of the TCSC are:
ability to mitigate sub-sync~onousresonance (SSR),
ability to balance three-p~~se
power flow,
ability to control power flow flexibly,
ability to reduce short-circuit currents by rapidly controlling the capacitive to ~nductive
impedance, and
ability to damp power system oscillations.
The controlled series compensat~oninstallation will likely have two key componen~
(Figure 8.7). One element will be the mechanically switched portion, and the second will
be the thyr~stor-con~rolled
portion. The relative sizes of the fixed and c o n ~ o l ~ emode
portions will vary with appl~cation.The TGSG portion i s made up of a number of small
series-connected modules. Each module is either inserted (with the thyristors blocked) or
b ~ ~ (with
s ethe ~ y r i t o ~fully
s conducting). In this manner, a stepwise ~ o n ~ iso l

Power System ~ e ~ t ~ ~and~ Deregulation

r i n g


ach~evedwith minimal losses and harmonics. There also exists the possibi~ityof op~ra~ing
in a vernier mode where partial conduction of the lhyristor path during each-kalf-cycle is
used to circulate inductive current through the capacitor and boost its effective ohmic
value. One advantage of such small-signal ~ o d u ~ a ~isi othen control of S
Transmission line
5% sections

Breaker switched

.7Thyristor-controlled series capacitor

A new control scheme with a TCSC [IS] indicates that a method of modula~ingthe
firing angle can be used to boost the series capacitor voltage and virtually eliminate the
of SSR oscillations. A phase-locked loop (PLL) is used for synchron~s~ng
thyristor firing with the line current rather than capacitor voltage for a more stable

~ ~ n t (I r ~ ~ ~ e ~
IPC [19,20] does
conlain any PE equipment, it is included here as a
FACTS device that can aid in the ma~agemcfltof power flow between two synchronous
t ~ gs u s c e ~ ~ n c e s ,
s y s ~ e ~The
s . basic IPG consists of a series-connected device c o ~ ~ r i s itwo
one inductive and the other capacitive, subjected to properly ~ h a s e - s h ~ ~voltages.
whatever the angle 6 at the TPC terminals, some of the cQmponentsare always subjected to
voltage. By adjuting the value of these compo~en~s,
it is always ~ o s s i bto
l ~force
t in each of the networks even if the a n ~ I eat the t e ~ i n a ~
is szero. When all
t set in one o f
are energised, the ampIi~deand phase angle of the c u ~ e nare
s to wh~chthe IPC is coniiected. This current contro~thus en
d reactive power through the device.
any types of IPC are possible and each type can have d i f f e ~ ~con~gurations~
In one
type cai~edthe IPC 120 (Figure 8 . Q the voltage phase shifts are achieve^ with a crossconnection between phases using an inverting transformer to reduce the voltage ~ a g t ~ ~ ~ d
applied to the reactive compQnents.One practical appl~cat~on
o f such an ~ n s ~ l ~ a has
appeared in ~ e ~ oUSA.
n t ~

group of three-phase reactors and c a p ~ c i t oeac

~ ~ , ~ ~ s ~inl series
~ e d
between two AC systems. The IPC is different from other series corn nsation devices in
the way the series elements are connected. For exa
of the s ~ n end~ system
i ~ i ~s connected to phases
Thus, whatever the angle B a
IPC t e ~ ~ ~ asome
I s , of the ~ o ~ p o n e nare
t s always
adjusting the value of these components, it is always
subjected to a certain voltage.
to force a current in
ystem even if the angle is zero. ~ e all nc o ~ p o n e n ~ s
are. ener~isedthe amplitude and phase angle of the current are set in one of two buses to
which the IPG is connected. This current control thus enables the power carrie
to be set, as well as the reactive power ~bsorbedor generated at one ofthe buses,

Flexible AG Transmission Systems (FACTS)



.8 Three-phase diagram of the IPC 120

The SSSC, a solid-state voltage source inverter [21,43,44], coupled with a transfornm, i s
connected in series with a transmission line. An SSSC (Figure 8.9) injects an almost
e ,series with a transmission line. This injected
sinusoidal voltage, o f variable m a g n ~ ~ din
voltage is almost in quadrature with the line current, thereby emulating an inductive or
capacitive reactance in series with the transmission line. This emulated variable reactance,
inserted by the injected voltage source, influences the electric power flow in the
transmission line.

dc bus

.9 Static synchronous series compensator

er c o ~ ~ r o ~cu~ently
in use is the ~
~ ampe~
~ [22] to ~~ o ~ n t eS r
was first o b s ~ ~ at
e dthe $quare utte ~roject.SSR ins~bilitiesare at. times an
side effect of us~ngmec~anical~y
controIled series capacitors to a t r ~ n s m i s s ~ ~
The ~ e n e of~ a~ ~
s ~series
i ~ ca~acitors
are to lower the lines i m p ~ ~~ ~~ cc ~r ~e, oa w~ ~~ r
sists of baclc-to-~a~k
thyristors connected in series with a
ss the series capacitor (Figure 8.10). The operat~onof the
damper is based on two principles. ne is to fire the switch 8.33 ms after each zero
crossover of the capacitors vol e, or half a cycle (or 180 degrees) at 60 13%.But if the
voltage wave contains other frequencies9some half-cycles will be longer than 8.33 ms. In
this case, the valve firing at 8.33 ms causes some current to flow during the exten~edpart
of the half-cycle and damps the oscillations. The second principle is to fire the switch
somewhat earlier tlxan 8.33 ms or less than 180 degrees following the voltage zero

Power System Restructuring and Deregulation


crossover. Earlier firing causes the impedance of the combined circuit to be more negative
than that with the capacitor alone, thus de-tuning the circuit. F u r t h e ~ o r eb~modulation
of the firing angle, the impedance can have a powerful damping effect at any unwanted
frequency below the main frequency. Similar effects can be achieved with HVDC controls.
A l ~ e ~ a t i v eactive
l ~ , filters can also be used.

-set time
resonance damper

S controller for using a TCSC to damp out SSR-related problems was

presented in [1 87. The new method controls the amount of voltage boost of the TCSC that
makes it exhibit a virtually inductive impedance in the frequencies from 15 to 45 Hz where
SSR problems may exist. Basically, the TCSC firing angle is modulated to provide
damping at SSR frequencies.

he team at the Kayenta ASC [24] showed similar results that the TCSC
exhibits an inductive impedance at sub-synchronous frequencies~and the danger from SSR
problems was alleviated. However, the main SSR danger resulted from the unco~troiled
portion of the series capacitance in the transmission tine.

PE switches (either thyristors or GTO thyistors) can be used to interrupt AC currents. The
thyristor depends on current interruption at the natural zero crossover point of the fault
current, whereas the GTO thyristor may intempt at a specified current setting (which is
below its interruption capability). Such static switches have been applied mainly to
distribution systems where the switch ratings are lower [25]. The static breaker can have
two parts in it, one a static switch and another a current limiter (Figure 8.1 1). When a fault
is experienced, the c~rrent-~imiting
switch is firstly triggered to take over the fault current,
and the main static switch is opened. This forces the fault cment into the current-limiting
path owing to the series inductive element. The non-linear arrestor across the static switch
is used to contain the overvoltages [26].

F i ~ ~ 8.1
r e1 Solid-state breaker and current limiter

Flexible AC Transmission Systems (FACTS)


It is possible to consider the switching capability of thyristors to use as c u ~ e n limiters

in the application of TSCS in the future [27]. The increasing interest in FAC
in paI~icularseems to indicate that fault-current-limiting functions can be economically
added onto TSCS units. F u r t h e ~ o r e ,these additional features lend themselves to be
retrofitted to existing facilities.


Combined Series/Shunk Controllers

rh the transmitted real power and, in~e~ende~itiy,

the reactive power flows at the sending and receiving ends of the transmission line. The
UPFC consists of two GTO-based converters connected together by a DC link having a
storage capacitor. This arrangement functions as an ideal AC to AC power converter in
which real power can flow in either direction. Each converter can either generate or absorb
reactive power at its own AC terminal.
Converter 2 of the UPFC (Figure 8.22a) injects an AC voltage Vm of variable
magnitude and angle in series with the line voltage thereby allowing the control of the
phase angle between the resultant voltage and the line current. This injected voltage can be
considered as a synchronous AC voltage source. The line current flows through this
voltage source exchanging real and reactive power between it and the AC system. The real
power exchanged is inverted into DC power and is stored in the DC link. The reactive
power exchanged is generated internally by the converter.
Converter 1 supplies or absorbs the real power required by converter 2 through the
link. Inverter I can also generate or absorb reactive power as a shunt device from the line.
Converter 1 can be operated independently of converter 2.

Parallel lransformer


.I2 Unified power flow controller (UPFC)

The operation of the UPFC can fulfil the multiple functions of reactive shunt
com~ensation,series compensation and phase shifting by ~nject~ng
a voltage Yw with
appropriate ampiitude and phase angle (Figure 8.12b). Comparisons between the UPFC
and TCSC, and between the UPFC and TCFAR, are made in (281. Results from transient
network ana~yser(TNA) simu~ationsand computer studies are also shown. An application
of this technique is presently underway at WAPA, located at Mead, and is rated for I060
NIVA (series injection) and 475 MVA (shunt compensation) capabiIi~,

Power System ~ ~ s t ~and

c Derenulation
~ u ~ n ~


concept (301 for the compensat~on

power flow mana~ementof multi-line transmission systems. In its general form, the IPFC
employs a number of converters with a common DC li
each to ~rovideseries
~nsationfor a selected line of the ~ransmiss~on
system. cause of the c o ~ m DC
link, any inverter within the IPFC is able to transfer real power to my other and thereby
faciiita~ereal power transfer among the lines of the transmission system. Since each
inve~eris also able to provide reactive compensation, the IPFC is able to cany out an
overall real and reactive power compensation of the total ~ a n s m i s s ~system.
~ a p a b i makes
l ~ ~ it possible to equalise both real and reactive power fl
lines, ~ a n s f e power
from overloaded to under loaded lines, c o m ~ ~ n s a t e
rops and the corresponding reactive line power, and to increase
ng system against dynamic disturbances. In its simplest form, the IPFC

line I

.13 I ~ ~ ~power
r ~ flow
i ~controller


A s c h e n i ~ t i~~~ a g r aof
m a phase shifter 1311 is sho

a ~ c o r n p l by
~ ~adding
h ~ ~ or subtracting a variable vol

fkom a
o ~ e isn o~tained
have voltages p r ~ p ~ ~ i oton a l
be included or e x ~ ~ u d e ~
and 9 - along with the plus or
e range of -13 to +13, thus gi
var~ableh i g h ~ ~ control
p e ~ ~of the p e ~ e ~ d i ~ uvoltage
l a r co~ponen~.

Flexible AC Transmission Systems (FACTS)

4 - -



V - Input voltage
i - Linecurrent

The principles of a pliase-shifting transformer (Figure 8.14a) with a thyristor tapchanger are discussed in [31]. Similar to a conventional phase~shifterwith a mechai~~cal
switch, a c o n ~ ~ n u o ~ svariable,
quadra~revoltage is injected in series with the
transmiss~online v o ~ ~ (F'I
1. It uses three ~ i ~ f e r etnrta n s f o ~ e rwind~ng(in
3:9), with switch arrangements that can by-pass a winding or reverse its
oduce a total of 27 steps using only 12 thyristors (of 3 different volta
, There is no thyrisgor"con~o~1ed
phase shifter in service
ifter does not have the ability either to gener~teor ~bsosbreactive
wer it absorbs or supplies must be suppl~edor absorbed
a n s ~ o ~must
~ e rbe locatea close to a ~eneration
to reactive power transfer.
~innesotaBower has deve~opeda novel and
P single core/single tank &bangeconom~cversion o
bang' %ype TCPAR which
ical and thyristor switches.
An advance^ phase sh
ng voltage source inverters (VSIs) using 6
shown in Figure 8.12 in an earlier section. The converter 2 is used to inject v o ~ V,~, in~ e
series with the line. The phase relation~h~p
of this voltage V, to the line vol
a r b i ~ aas
~ shown
in the phasor d i a g r a ~Thus
the injected voltage can be used fo
ulat~onor both. ~ u r t h e ~ o rthe
e , VSI can itself generate or a ~ s o r ball
ompensating voltage injection. On the 0th
must be provided by the AC sourc
available). ~ w i t c h ~converter
1 supp~~es
to or abs
dc link capacitor the real power involved in the overall compensation. Since CO
handles only real ower, and as its AC side is in shunt with the transmis
largely i~nmunefrom the effects of surge currents during any line faults. C o n ~ e r ~ e2,r
however, has to handle its total injection FA as well as any surge currents during faults.
Consequen~iy,the rating of converter I is smaller than converter 2. The phase shi~terof
this type is econo~icalto a total angle variation of 120 degrees. Above this value, the
rating of the injection converter becomes larger than the power transmitted through the
line. In such a case, it might be economical to consider the approach of the HVDG back-to-

Power System Restructuring and Deregulation

back c o n f i ~ ~ t i considered
in Section 8.4.6. The advanced phase s h i ~ ehas
r the ability
to control all three parameters affecting power ~ansmission:phase angle, voltage and
edance. For this reason, it has also been called u n i ~ e dpower flow contro~ler~ ~ P F C )

Strictly speaking, HVDC transmission does not fit in with the definition provided for
ACTS controllers. However, HVDC systems have been a dominant player for such a long
time in the usage of PE controllers for transmission that their role in promoting high PE
c o n ~ o ~ l ecannot
be overlooked. With the latest developments in PE t e c ~ o l H
~ ~C
sys~emswill play an even greater role embedded in AC systems. Trad~tiona~ly,
~ r ~ s m i s s i oisnused only for special situations and applications:
~ong-distancebulk power ~anmissionwhere it was cheaper than the AC a l ~ e ~ a t i v e ~
asynchronous interconnections, and
using a submarine (or underground) cabie,

~ a f i s ~ ~ ~ s i ~ ~
transmission, power is electronically controlled, and hence an
~~~C line can be used to its fill thermal c
e converters are adequate~yrated.
line can help a p ~ a l ~AC
e l line to
F u ~ h ~ ~ oowing
r e , to its high-speed control,
maintain stability (as long as the E'NDC con
not sustain ~ ~ u ~ failures).
a ~ o
C ~ n s m i s s i o nis used only for
~ o w e v e r owing
to its expensive impleme
special situations and appiications. An alternative a ~ ~ g e m with
e n ~a con~olledseries
capacitor in an owing transmission line may provide similar advantages at a lower cost.
~ o w e v ein
~ ,i n t e ~ a AC-DC
systems, it is now possible to have a DC link in parallel
an ac link, Ln such systems, and there are a n ~ ~ b ofe rsuch instances (i.e.
Intertie, C h ~ d r ~ p u r - P ~ dtie,
~ hetc.),
e h e DC link can be used to increase the power
~ a n s ~ i over
~ e the
d AC system and provide additional d ~ p i n when
requ~redfor stability
ith the availability of GTO/IGBT converters, it is feasible to conside
inverters feeding into very weak and even dead AC systems [34], which have no
s ~ c h r o n o machines
at all. Some of the problems previous~yassoc~atedw
terminal HVDC systems using conventional thyrigtors may now also be addressed with
parallel taps using f o r c e ~ c o ~ u t a t econverters.
This means th
consider multi~term~al C systems more sympathetica~~y.
G systems can materialise, however, one additional device
ects for this are excellent.
opmen~will be the HVDC breaker; the
The practical d ~ f ~ c ouf l impleme~tin~
~ T ~ - ~ a conve~ers
for high
a p p l ~ c ~ ~ has
~ o nbeen
s the problem of operating GTQ devices in series. Some tec
een suggested to build up the high voltage required for DC t r ~ s m ~ s s i obyn using
~ ~ l t ~ - ~ n v e rint eseries
[353, or the use o f mul~~-level
converters; in either case,
capacitors are used to equalise the voltages across the ~ u ~ t i - c o n ~ e ~The
e r s economic
of such t~chniquesfor h i g h " v o ~ ~ app~ications
is far from clear at present.

Flexible AC Transmission Systems (FACTS)


Up rill now both converters have been line-cominu~tedand therefore havs had control
only over the direction of active power flow. With the use of self-commutated GTO
converters (Figure 8.15), reactive and active power flow can now be controlted in any one
of four ~uadrants,since there is no restriction &om the commutation voltage of the valves.
Additionally, use of PWM techniques will assist in the minimisation of harmonics
generated by the converters and lowering the overall cost of the terminal equipment. We
can expect further applications o f BB ties at Iower cost and improved performance.

AC systm1 I

Active and reactive power can

flow in either direction

AC system 2

.I5 Force-commutafed BB link

In this respect, two recent deve~opi~ents

that will have significant reper~uss~ons
future ties are:
capacitor commu~atedconverters (CCC) [36], and
controlled series capacitor converters (CSCC) 1373.
Both these t e c ~ i q u e srely on utilising capacitors in series with the converter wit
effect that the reactive power demande~by the converter is effectively compensat
the series capacitors. This i s a ~ u n d ~ e n tdeparture
from the previous HVDC converter
practice o f empIoying shunt capacitors for reactive power compensation. The beneficial
impacts o f the series capacitor are as follows:

The capacitor voltage assists in the commutation voltage for the converter which
allows operation with a very weak AC system.
Since the reactive power flow through the converter t r a n s f o ~ e ris reduc~d,the
d~mension$of the converter t r a n s f o ~ ecan
r be reduced.
The valve short circuit current is reduced to about 50% when ~omparedwith a
c o n v ~ n ~ o nconverter.
Since the AC filter is reduced in size, the load rejection overvolfages are much smaller.
Coupled with these trends, ~ a n u f a c ~ r eare
r s now offering more efficient, cont~nuously
tuned AC filters, active AC and DC filters, compact and modular outdoor valves and fully
digital controls. These new concepts are going to reduce the cost of converters and improve
A new g e n ~ r a t ~of~DC
n cables is available based on polymeric i ~ s u ~ a tmater~a~
i n ~ instead
of the classic paper-oil insulation. The mechanical strength, flexibility and low weight of
the cables make them suitable for severe installation conditions. The cables use copper
conductors for submarine usage and aluminium conductors for land usage. Land cables

be inst~lledunder~oundby plough~ngtec iques or go overhea

elopment of IGBT valves c
the use of newly designed DC c
to new app~ications,Usin
es with switching f~equenc~es
e new IGBT-based, VSCs are ~e1f"~omrnutated
and can c o n ~ o lactive and
er flow. This reduces the size of co~ponentsrequired a ~ p r ~ c i
ers are c o n s ~ c ~ eind a modular concept and are e n c l o s ~i ~
ng range can vary from 7- 60
over distances of 0- 1
lications scenarios are envis
ith this concept:

ulk power ~ ~ i s ~ i s s ~ o n .
eacctive li er controller, coupled wiek an active dilteri
l-scale genera~ionfrom w i ~ d ,
ding of new r i ~ ~ ~ ~ omay
y ava~labIe.
q u a i i ~control by iso~a~ing
dis~rbingIoads such as smelters.
of appl~cat~ons
have a ~ r e a ~been
y ~ ~ p with
Q this
~ ~c od~ c e p(T~
future pr~spectsare excellent.

2 Gotland




active and reacti


Flexible AC Transmission Systems (FACTS)


Other Controllers

These can comprise

(a) T~zyr~stor

ected in series with a part o f a

In this application a
arrestor to lower the voltage limiting level dyn~mically.
(h) ~ ~ i y r i s t ~ ~ - ~ ~ ~ t r o ~ i e

This could be a regular t r a n s f o ~ e rwith a thy~s~or-controlled

t a p - c h a ~ ~ or
e r with a
thyristor-controlled AC-AG voltage converter of variable AC voltage, in series with the
line. Such a reiatively low cost contro~lercan be used for controlling the flow o f reactive
power between two AC systems.



Northern States Power Co. ( ~ S o ~f ~ )i ~ n e s oUSA,

t a ~ has installed an SVC in i
power tr~smissionnetwork, a part of the ~anitoba-~innesota
Project, the purpose of which is to increase the power i ~ ~ e r c h a n
Wi~nipegand the Twin Cities on existing transmis~~on
lines. This solu~~on
instead of build in^ a new line as it was found to be supeRor with respect to in
utilisation as well as minimised e ~ v ~ ~ o n m eimpact.
n t a ~ The main
eneration and ~ a n s ~ i s s i osystems
d y n a m ~response
to ~ e ~ o r k
also provides improv~mentduring steady-s~ateconditio
adequate reactive power support. Wi the SVC in operation, the po
capabiIi~o f the y s t e ~has increase y some 200 MW. W i ~ o th~ t
~ a ~ a ofc the
i ~ ~S~ n e ~ o r kwould be evere~y1
excessive voltage ~ u c ~ a t ~ following
certain fault situations
system, or to severe overvoi~a~es
at loss o f feeding power from
The system has a d y n ~ ~range
i c of 450 MVAr inductive to 1000
500 kV, r n a ~ i ~it gone of the largest of its kind in the world. It consi
chan~callyswitched capacitor banks
required to control the ovewoltage
e n o ~ h end
e ~of the 500 kV line, The SVC consists of f x o t h ~ r i ~ t o r s w ~ t ~ h ereactors
( T ~ ~and
s ) three ~yris~or-switch~d
ratings are utilised only during severe d i s ~ r b a n cin~the
~ 500 kV networ
the SVC has been d~signedto withs~ndovervoltages up to 150 % of rated v o ~ ~ a gfor
short periods (< 200 ms).

Power System ~

s and Deregulation

essee Valley Authority teamed up with ~ e s t i n ~ ~ otou sinstall

a 100
at TVAs Sullivan 500 kV s u b s ~ t ~ o~n l ~ ,inl ~~o ]~ City.
o n This
trated in 1995. The selection of this site was made to:

Test the full range of reactive power of the STATCON.

Aid in damping the oscil~ationsin the TVA system fed in from the n e i g h b o ~ n gAEP
bus voltage during the daily load bu~ld-upso that the 500/161 kV
m e r bank can be used less often.
bus at Sullivan during off-peak periods.
are c o ~ s i d e r ~STATCON
a p p ~ ~ c aon
~ ithe
o ~C Q ~ O ~ W ~
d Electric Co. Some cost evaluations have been reported at
3 ~onference[ 121.



i ~ a n u f a c ~ r e rare
s resently being tested in North
In 6991, AEP of Columbus, Ohio, with the ~ ~ u f a c ~ ~ e ~
of a single-~hase series capacitor b ~ atk
~ r o t o switch
~ e
er sub~tionin W. Virginia. Fo~~owing
s ~ c c e s tests,
s ~ ~ a 788
A, 42 ohm series three-phase capacitor bank was installed. Each p
consists of two p l a t f o ~ s one
, with both a 10% (7
the other with the remain in^ 30% (21 ohm) s e ~ ~ e
Power A u t h o r i ~(
e first t~ee-phaseTCSC 230 kV, 33
in Arizona [40]. For the requirement of inc
~ a n s i ~ i s s line
~ o nb e ~ e e nShiprock Subs~a~ion
and Siemens~okiajointly agreed t
yenta substation. In addition to the benefit of adjastable i ~ p e d a n c ethe
ed reactor can provide high-speed pro~ectionof the 15 ohm capacitor
managed the install
ith n ~ a n u f a ~ ~GB
~ r esuccessfully
ptember 1993 on a 500 kV line at Slatt subs~tionof the
TCSC consists of six series capacitor modules. Each modu~ehas
ohms at 60 Hz, in parallel with a ~~yr~sto~*control~ed
inductor of 0.
of the ~ o d ~isiachieved
by firing angle control.

Flexible AC Transmission Systems (FACTS)


UPFC application was commissioned in mid 1998 at the Inez station of

Kentucky for voltage support and power flow control.
regulates the substation 138 kV bus voltage by controlling six capacitor banks
Ars to reduce daily and seasonal voltage fluc~ationsto within acceptab~elimits.
The controllable rea~tivepower range of the shunt converter is from -160 to t-160 ~ V A r s
to Compensate for dynamic system disturbances.
The PFC is maintained at a level of 300 N W on the line between ig Sandy and Inez to
minimise system losses. Under severe contingency conditions, the UPFC controlle~line i s
capable of ~ a n s f e 950
~ n MVA.
In order to increase the system reliability and provide flexibility
changes, the UPFC installa~ion allows the operation of the shunt
~ d e ~ e n d e nS tT A T ~ ~and
M the series converter as an independent
ible to couple both converters together either in shunt or series over a double control

Each GTO converter is rated at I- 160MVA. The converter output is a t~ee-phas

set of nearly sinu$oidal (48-pulse) quality. Each converter feeds an in
transformer that is coupled to the transmission line via a conventional thr
is 50 % of the main Iran
transformer. The rating of the i n t e ~ e ~ atransformer
The converters are c o n s ~ c t e dfrom three-level poles, each c o ~ p o s e dof four valves.
This a~angementassists in waveform construction to facilitate harmonic elimination. Each
converter employs 48 valves in 12 three-level poles with a nominal dc voltage o f + 12kV
and -1 2 kV with respect to the mid point. The mid point voltage is maintained by ~ e a ofn ~
a split capacitor and diode arrangement.

lation of the power i n d u s ~[42], FACTS controllers will be r $ ~ u ~ r eby

power systems to ana age power flow to utilise transmission lines nearer to their t
limits. The ability to transmit at higher transfer limits will necessitate
to balance reliability and economy of operation of the power sys
adoption of FACTS controllers, the following concerns o f the power industry ~ ~ toebed
Transient ove~oltages.
System restoration.
Generator torsion behaviour.
Power quality.
Economic ~onsidera~ions
and cost benefits.

ower System ~ e s t ~ c and

~ n g

e ~ o n c e ~ study
tools are require^ to test. the FACTS con~o~lers
as c o n c e p ~prototypes
or before the
er c o ~ ~ e service),
r ~ ~ The
a ~
) and the red-time power
on ~ l e c ~ o m a ~ etransient
ly available. Noweve
these c o n ~ o l l e r sare still
Owing to the capital costs involved, FACTS d e s ~ ~ ewill
r s seek to add featur
FACT^ c o n ~ o ~more
l e ~viable, such as the feature of fault c ~ ~ l iem ~n t i~nwith
FOP the a p ~ ~ ~ c a t of
i o nS~T A T ~ O N ~
may be % ~ d if~ fde a ~ r e ssuch
ondition~ng(I.e. h a ~ i ~ n cancellation)
can also be provided along with

The author pays tribute to the many pioneers whose vision o f the FA
led to the rapid evolution of the power industry. Although it i
o f them i n d i v i d ~ a l ~ y ~c o n ~ ~ b ~ t iof
o nDrs
s N, ~ i n ~ o ~ ~ i
The author also than
s wife Vinay for her considerabIe
this ~ a ~ ~ s c r i ~ ~ .

i, FACTS - flexible ac ~ansmissionsystems, IEE ~ n f e r n a ~ i ~Conference

wer Transmission, 1991, pp.1-7.
mgorani and L. Gyugyi, ~ n ~ e ~ s t aFACTS
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AG T r a n s m ~ s Systems,
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o ~
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Flexible AC Transmission Systems (FACTS)

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~ ~
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Power System Restructufing and Deregulation









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J. Kappenman et al., Thyristor controlled phase angle regulator applications and concepts for
the Minneso~-Ontario Interconnections, EPH FACTS3 Conference, Baltimore, M a r y ~ a n ~
Oct 1994.
ood, Position paper for Canadian Electrical Association on Artificially ~ o ~ u t a ~ e d
Inverters, March 1989, Contract No. ST-174B.
ng, J. Kuang, X. Wang and B. Ooi, force-commutated NNDC and SVC based on
phase-shifted multi-converter modules, IEEE Transactions on Poww Delivery,Vo1.8, N0.2,
April 1993, pp.712-718.
T. Jonsson and P. Bjorklund, Capacitor Commutated Converters for HVDC, Paper SPT PE
02-03-0366, IEEE/KTH Stockholm Power Tech Conference,Stockholm, Sweden, June 1995.
K. Sadek, M. Pereira, D. Brandt. A. Gole and A. Daneshpooy, Capacitor c o ~ u ~ a t econd
verter circuit c o n ~ ~ r a t i o nfor
s DC transmission, IEEE Transactions on Power DeZivery,
Vo1.13, No.4, October 1998, pp.1259-1264.
J. Vithaya~hil,P. Bjorklund and W. Mittlestadt, DC systems with t ~ n s f o ~ e r l econverters,
IEEE Transactions on Power Delivery, Vol.10, No.3, July 1995, p~.1499-15~4.
A. Keri, A. Mehrbahn and P. Halvarsson, AEP expenence with the 788 Mvas series capacn d . 1994.
itors and the controlled thyristor switch, EPRI FACTS3, ~ a I t i ~ o r~e ,a ~ ~ aOctober
N.Christl, ct al., Advanced series compensation with variable impedance, EPRl Conferen~e
I on FACTS, Cincinnati, Ohio, November 1990. Proc. March 1992, EPN TR-100504, Project
J.Urbank et al., Thyristor controlled series compensation prototype installation at the Slatt 500
substation, IEEE Transactions on Power Deliwy, Vo1.8, No.3, July 1993, pp. 1460-1469.
enderson, Operating issues for FACTS devices An operations p l ~ i n pg e ~ ~ e c ~ i v e ,
EPN FACTS3, Baltimore, Maryland. October 1994.
Static Synchronous Series Compensator: Theory, modeling and
applications,IEEE Transactions on Power Delivery, Vol. 13, No. 1, January 1998.
L. Gyugyi, 6. Schauder and K. Sen, Static synchronous series compensator: A solid state
approach to the series compensation of transmission lines, IEEE Transactions on Power
Delivery, V01.12, No.1, July 1997,pp.406-417.


Kevin Morton
London Electricity Group

Cliff Walton
London Electricity Group

Asset management has been one of the most debated topics over the past decade, yet ofien
those words are used to label some very different processes. Asset management can range
from the ma~ntenanc~
and renewal regime associated with a specific indiv~dualor group of
assets to the management of a multi-billion-pound international portfolio of networks of
assets spanning a range of industries. This introduction explores the drivers of the
development of asset m ~ a g ~ m efrom
n ~ a UK electricity distribution ~erspective.The
drivers for change have most often arisen from regulatory initiatives or from the ~nancial
position of new owners, with asset management evolving to meet each new challenge.
U n d e r s ~ d i n gthe drivers gives an insight as to why asset manage men^ means ~ ~ f f e r e n t
things to different players depending on where they are in the resmchtring of their

In the years i~mediatelybefore privatisation, the electricity indushy 's finances and
investments were very much Treasury driven to meet the public sector borrowing
requirements. Compet~ngdemands for government investment meant that most e l ~ c ~ i c i ~
companies were required to curtail capital investment and were given annual targets to
return cash to the Treasury.
At this stage of developm~n~
asset management was normally considered synon
with time-based planned maintenance. However, the constraint on the capital expendi~re
(Capex) investment meant that as little in the way of reinforcement or renewal was possible
and this brought about a focus of improving asset utilisation. U n s a t i s f a ~ t oassets


removed and wherev~rpossib~enot replaced, whilst ~ d e ~ ~ i lp~ant

i s ewas
~ recov~re
reloca~edto meet load ~ o ~ h .
onal areas with local olicies a n ~ o inte
retation of policy rn
su~tingin ~ i d e ~ y
Is, unit costs and performance of networks.
en business o~eratingunits was used to drive lowe
utilisation but the availa~ilityof c
rmance proved to be a limitation
a b ~ the
u ~ac~uracyof the statisticsbetween rivals.

~ r i ~ a ~ i s ~~t i o~n a gho ~v e~~s~ e ntot realise the c o ~ s i d ~ cap

at the same time free industries from the cons
Prices in the UR were initially set vi
rec~ivinga ~ o ~ t i vx,e ~ h e r ~ be yn a b l ~the~ perceiv~d
nts to be hnded by the new investors.
ut the new sha~eholdersbrought about a strong ~ r o d~r i ~
t e rfor staff num
fall, which in turn b ~ o about
u ~ ~

Asset ~ a m a ~ ~ r l s eprovider
~ i c e business models beg^ to be a d o ~ ~ e
but in a variety o f ~ o ~Often
s . initi~~ly
with service level a g r e e ~ e n
provider conb-actors, some
relatively small asset ~ ~ a g group
e ~and~ i nn~ e~~semi
a ~ i moved
~ ~ s to adopt ~ o ~ c ao n1~ a c b~ se ~ e the
e ~p ies and ou~ourcenon~core
b e n e ~ t were
seen to be:
a c ~ ~ v ito~ei x~ ts e ~ c~mpanies.
g ~ p e r a ~ i n~ gx p e n d i ~(r e
rent ~ v e sdeci
~ ~ t
ecisions from the doing,
ed a d~~ferent
skill set f ~ o mthe ~xecut~on.
changes in pract~cesan
g to be contracted out b the ~ ~ o $ t
fied gets done (or

These chan~esmeant that comp

to acquire additional s
ision making enabled a
i d expertise enabling Iarg

t e c ~ i c astaff.
The asset manager/servi~eprovider model has met with mixed su
drivers o f the service provider not neces
become ~onfron~ationa~
with those of the asset m
0th sides need experts, one to specify and o

d successive year-on-ye
o f unspeci~edpena~tiesan

e achievement of (c~mp~y- set^ per

World class studies, bench~arkingand b~sinessprocess re-en~ineenng.
Considera~ionof a whole life approach towards vestment.
O r g ~ ~ i s a t i omoving
towards a three-layer model as they begin to s e ~ a ~ ~
a ~ e r s h i pfrom o~erationa~
a Strategy
b Asset m ~ a g e m e n t
c Service provide^
A more accountable set of relat~onshi~s
specifying what needs
the doing to the a c c o u n ~ unit.
~ ~ a t e g asset
i c ~ a n a g e m ~ approacl~
to u n d e r s ~ d i n gwhere value is c r e ~ ~ e
destroyed, s ~ ~ r n ~ins the
e d estion - where best to invest the next poun~?
cenario ~ a ~ y to
s ~ s
i n v e s ~ e n tstrategies that are most i
r ~ ~ u ~and
a tc ox ~~ ~ ~ a l

The second half of the 1390s

Power System ~

~ andc

Data mining, fault causation analysis and targeting of worst-s

customers and most
ve to operate n e ~ o r k s .
dition monitoring to inforni selective refurbishment or renewal.
e d engineer~ngand mainten~ce.
ing dormant and problem assets and imprQvingasset
y capital project management for smaller and smatle
~ a l u e - b a ~ procL~remen~.
ovation in technology and processes.

for past i n v e s ~ e n t an
some 9 m o n t ~ sahead
end of the five year review period. At the same time indications of future income caps and
~ e r f o ~ a ntargets
c e were published with 50% of the savings from mergers clawed back.
The im~ediatereaction by PESs to the regulators initial tho~ghtsdepen~edupon the
robustness of their asset management scenario planning and their long-term strategic intent.
Some cQntinued much as before but overall the publication of the initial r~viewresults
created a drama~~c
fall in capital i n v e s ~ e n orders
and in the asset replacement con~acts
h limited rewards for excellent p e r f o ~ a n c eand p ~ d ~ capital
i n v e ~ ~ e nthe
switched fixed resources onto those targets they saw as ~ a v ~ na ggood
ieving without additional investment, whilst ~ o ~ - p e ~on
l ~those
that require^ investment and additional resources.

prices cut by 20-35% per-unit from

r 3% per-unit price reductions for 4
ency savings of 19%-29%.

PESs from April 2001

and aggregation costs ~ a n s f e ~ to

e dsupply.
The role of dis~ibutionredefined and almost all customer service costs transferred to
al~owedrate of return (good asset m ~ a ~ e mcan
e ~deliver
A metering ~ ~ ~ p efrom
t ~April
t ~2000.
o ~
Agreeme~ton a business separation comp~ianceplan.
P e r ~ o ~ a ntargets
c e set by the regu~ator.
I n f ~ ~ a t i and
o n incentives project to come.
ce savings whilst ~mprovingcustomer
It is a major cha$~engeto deliver the DPC
suggestion from the regulator is that
service: with an uncertain incentive mechanis
o r ~to mimic a competitive
companies will be placed within an incentive ~ ~ e wintended

Asset ~ a n a g e ~ ~ n t


inarket with Gompanies that do least well in meeting their agreed targets financially
r e w ~ d i n gthose com~aniesthat do best by an exchange of penalty payments.
The uncertainty posed by Ofgems Information and Incentives Project in terms of what
will be incentivised, how p e r f o ~ a n c ewill be defined and measured has for many
companies effectively extended the moratorium in investment.
Companies need to consider how the required scale economies can be effected whilst at
the same time d e ~ i v e ~improving
p ~ r f o ~ ~Some
c e . companies may choose to ~ e f e ~
major new ~ n v e s ~ ~ commitments
and perhaps org~isationalchanges until there is
greater clarity about the rules of the next round of the regulatory game, but this brin
own risks of failure to deliver required improve~entssufficiently quickly. The u n c e ~ ~ n ~
the need for a robust frameworks for modelling and valuing the impacts of the
various organisational and investment opportunities against a range of scenarios.
The scope of asset management has developed with each previous sta
r e s t r ~ c ~ r i nofgthe d~stributio~
business and is therefore set to do so again.
For companies already recognised by the regulator as being frontier efEcient or as
leaders in effective asset management, but still being presented with a very si
in r~gula~ed
income, a her radical change is essential to achieve the r
change in results and still remain at the frontier.
~ o ~ b i n i the
n g manage~entof the two power distribution networks
v e n ~ r ecompany (2~seven)is LES and TXUs innovative response
~ e r f o ~ challenge.
~ ~ c e Creating an outsourcing a ~ a n g e ~ with
e n ~ the tran
vehicles and tools, etc., allows the shaxing of expensive ~esou~ces,
S U G ~as
offices, IT, control, s~ategicana~ys~s
and research, applying best practice
optimum solutions and delivering a range of services at best value for
allowing each company to retain is ownership, distribution licence and to
unique com~etitivearke et position should this be appropriate.
Such an approach creates the driver for the next evolutionary phase of asset
m ~ a g e m e n tand requires the separa~ingout and future comp~titiveassignme~tof the
responsibilit~esb e ~ e e asset
owner, asset governor, asset manager and operators.

The owner of major sets of utility assets, whether it be a gov~rnment,~ u ~ t ~ n a t i Q n a ~

co~oration,publicly quoted c o m p or
~ ~m ~ i c i p a lcooperative, will n o ~ a l l yhave a
relatively small set of strategic objectives it is seeking to achieve by its ownership, e.g.
ansion etc. It will not normally wish to concern itself with the detailed
~ ~ ~ cr ~i a~ ~uor, ~~ e~ c t~ iomc a~an~a g ~ e nof
t the assets but mere~yto s a ~ i s ~ at
they are in the hands of an effective governor who can reliably deliver its
objectives with Erontier ef~ciencyand effectiveness.


~ e p ~ a t i nout
g the respons~bilities of governance from those of o ~ e r s h
management and operations to an organ~$ationdedicated to the creation and release of
value t ~ o u g hthe effective m ~ a g e m e nand
t exploitation of the assets.

ower System ~ e ~ ~ c ~and

r ~i Ie ir ~~ ~ l a t i o ~


The asset ~ o v e r n ~ concept

provides for even a n o n ~ t e c ~ i corgan~sat~on
from the ownership of a world class set of distribution assets and services with l~mi~ed
d with a minimal stafX
s new to the e ~ e c ~ cindustry
~ t y but s ~ m ioppo
ities exist in other
~ s the own~rssee the need to
i n d u s ~ e ssuch as rail md a i ~ o where
a1 ef~ciencyand returns s i g n ~ ~ c a nbut
~ yhave other major an
ial o p p o ~ i t i e to
s commit their ~ a ~ a g e m etime
n t to.
~ ~ ~ ~compliance,
l a t supply
o ~ business satisfaction, income ~ a ~ i ~ i sand
a t value
~ o ~
e~erationre~uirea different skill set from the ~ a n a g e ~ eof
n t~ ~ d i v ~~ sds u~or~t ssets of

se, a v a i l ~ b i l i ~capacity
and income ge~erationfrom
g and actively managing the portfolio of risks.
developing network assets to match new ~ a r k e t sfor

sition with respect to frontier e ~ c i e n rc e~ ~ ~ a t o ~

es arising from the removal of geo

allows economies of
d maxim~s~ng
the returns from

sibly unique arke et p~sition

ent and operations to be ~ o n ~ a cout

t e to
~ the mo
r ean
r ~ c i ~role
a l of the asset governor is ~ e ~ e f oas
e ~ ~ e ~ tand
i v eefficient
the g o v e ~ owill
r require ntier u ~ d e r s t ~ ~of:

vol~mesof servic
lity of work done and the value add^^
s and s ~ n d a r neces
to evel lop and renew con~act

also discharge a ran

of the owner that cann

Power System Reshucturina and D e r ~ ~ ~ a t i o n

As has been seen, asset manage men^ is given a wide variety of int
industry and even within the electricity supply industry. Even with
i n t e ~ r ~ t ~may
~ i ochange
with time particularly as the com~anylearn
~ypically,asset manage men^ has been seen as the core of the d
being p~marilyresponsible for the strategy of the network and
both are derived through teamwork and cooperation throughout
main areas of focus are asset and network p e r f o ~ a n c epolicy
and s t a n ~ ~ di sn ,v e s ~ e n t
and operating costs. The focus on the latter is t ~ o u g hwork reduction and a v o i d ~ c ewith
the operational groups focusing on productivity issues.

Data is the essential ~ ~ ~ e dtoi eeffective

n ~ asset ma~agement.The asset man
process adds value by converting this data into decisions, which reduce the o v ~ ~ a l ~
ycle cost of the network.
n service ~ifecyc~e
costs can be ~ r o k edown
~ into ~ r e ~e ~ s t i n areas:
one o f the major factors in
operations & maintenance and d e c o ~ i s s i o n i n gHowever,
of the asset. ~ n s ~ l and
~ a ~ ~
d e ~ ~ i n i nthe
g overall lifecycle cost is the actual
at the concep~alstage of a
ave adi it ion ally been evalu
d e c o ~ ~ i s s i o n i ncost
intenmce costs being considered over a fixed
project, with operating
gers today are faced with d ~ i s i o on
~ s whe
p a ~ i c ~ asset.
~ a r Asset

invest, but also have a responsibility for the much wider issue of the exisli
For all these existing assets, decisions must be taken which reduce the CO
asset in service and extending the period for which the ass& provides sati
this i s the essence of asset m
The i m ~ o r ~ aquestion
Asset Managers must ask themselves is:

If the answer is yes then the task is s ~ a i g h t f o ~ a-r we

d simply record the age of our assets
and replace them at the correct time to prevent them becoming a safety hazard to staff,
d i s ~ ~ ~service
t i n ~to our customers, or becoming expensive to m a ~ n ~ a ~ ,
Life just isnt that simple. Assets age at different rates depend in^ on the nature o f the
duty imposed on them, the environment which they inhabit, the way they were
well as a whole host of other c o n ~ b u t factors.
Even if we are able to no
ageing process it is still necessary to be able to predict the life span for each
we are to avoid replacing plant too early, or allowing our service level to deteri
Tools exist to enable us to d e t e ~ i n ethe condition of some of our
condition of the asset is far more i m p o ~ nthan
t its age. The present conditi
of how well the asset has aged over time.

~ o n i ~has
r ~come
c o ~ o n p ~ a in
c ea number of asset-inte
It has the potential for e ~ m p l i c a t einformation
systems to capture pre
about ~ a ~ i c u laspects
of an assets p e r f o ~ a n e eand present them in a us
to fac~l~tate
decision m ~ i n gon maintenance regimes and replacement
vides the opportunity for an operator to inspect visu
on, a piece of equip men^ and report whether a n y ~ h i nhas
~ change since the last visit.
g re~o~in~
Taken to its other e x ~ r e ~ite ,could mean a fully auto~ated~ o n i t ~ r i nand
system complete with e ~ ~ y - w ~ ai lnmgs for an indication of wear or %heneed for
The degree of c
ity is a major factor in whether the cost o f c
can be ~ e c o v e r eb~
ed m a ~ ~ t e n a costs,
n c ~ higher utilisation, ex
manage men^ of risk here i s little point in just mo~itor~ng
t r a n s f o ~ e ron a re
r basis, via expensi~eanalytical e ~ u i p
oil sample will provide a more reliable i
i ~ e x p e ~ ~ analysis
wear or ~otentialfailure. If neither of these t e c ~ i ~ u eenable
accurate pred
fai~ure,or reduc~ionin main~enance,then we must question their u s e ~ ~ n e in
management process.
tage of condition~~ased
monitoring is that it allows the as
ree o f con~dencein how the assets are p e r f o ~ i n gand
le Eime-based preventative maintenance. In short, it provides the
the cost of maintenance and extend the life of the asset. If re

Power System ~ e s ~ u c t and


it or in^ is carried out and records collated, a foo I for each item of
established and trends monitored.
This can be useful for predicting potential f a ~ l ~ ~ s
correct~vem a i ~ ~ n ~ c e
Lace, which is normal~yless expensive than
g a catas~ophicf a i l ~ e .
ines for ~ n a c c ~ ~ tperformance
are unavai~able,collati
pu~ationenables Qut~iersto be identi~edand e x a ~ i n e d
~ e g r e eof comp~exityof the rnonito
remain %hesame - decide on the criteria for perfomm
ind~catorof po&entialv ~ i a t i o nfrom this s
~ and ~
point in con~~nuousl
or of wear is the time it take
ring equipmen%and techni~uesare ~ ~ e n availab~e
t ~ y to the
following sections detail a selection of some of those e

many aspects of a transformer which can be monitQ~ed.One simple but e f f ~ t ~ v e

form this is ach~eved
mon~tori s the level of moisture in the insul
vis~ialiyinspect~ngthe colour of the silica
r e f ~ g e ~ b~ ~e ed ~ ~ ~which
e r s actively
s if the ~ o i s t u r level
should rapidly increase.
eing process can effectively be slowed ~o~
r. London Electricity has effectively employed
level of m o ~ s t ~within
the tram
A more d e ~ i ~ ~e di c ~ofr the
e condition
out dissolved gas analysis (DGA) on a sampl
sent and what activity is likely to h
ite equip~entto provide a coarse i n d ~ c a ~ iby
carbon ~ n o n o ~ i dmonitor.
This provides
a$so~iatedwith overheating, elec
set levels. This provides the opp
lant arising and actual
and moisture content tests can also
of the c o n d ~ t i oof~ %hep l ~ We
t ~ can

Asset ~ ~ a g e m e n t

not simply the num

duty of the contacts

continuously loaded
profile in Outer ~ o ~ ~ o n .
trials are now in progress to s i ~ u ~ amany
t e yews' w o ~ ho
onths. ~ n s p ~ of
~ othe
n oil and contacts at various i n t ~ ~ ~
enable us to c o ~ our
i initial
~ ~ asse~ionand d
within these trials s
e t e ~ ~ n i ma~ntenance
intervals for diffe~entlyloaded ~ a n f o ~ ~ r ~ "

Apart from the routine oil condition tests mentioned ~ r e v i o u s l ~
breaker t~mers
e arnoun~of wear on the o ~ e r a ~ imec~anism
to be ~ o n ~ t o r e~d .~ n d ~o n~ e c ~ i
se of a simple and inex~ensivee ctronic timer when carrying out op

ry ins~ection(~ressureVessel

city makes e x t ~ s i v euse of infrared detectors and t h e ~ o v i s ~ oc n
ts caused by loose c o ~ e c t i o n sor worn c lings on exposed b ~ s ~ aor

Ith check nion~torsare used to check for excesive vi~rationmd h ~ n c e

mon~tor~ e c h a n ~ c aear
l on th
~ a n s f o ~cooling
The i ~ i ~ ~is~not
t oar vibration
truest sense since it is basi
evice, w ~ i assi~iilates
~ h
noise with wear.
detectors are
ta monitor d ~ s c h a activi
~ o ~ a transient
b l ~ earth ~ o l (TEV)
~ ~ e
of the d i s c ~ a ra~c t~i v i ~ ,or c
o sirnil~
ion. ~ o ~ ~ n ~u mooun i~t o r iis~ ~a1so availabl
on it or 'leaky' ~ l a ~This
t . can

compile a f o o ~ r i n tfor a particular substation. Where a high level of le

monito~ngequipment with pre-set a1
vels and potential failure.

Long-term Asset Costs
If we are to ~nders~and
the long-term costs of employing assets, then we must have a good
~ d ~ r s ~ dofi nhow
g they perform in service and what t e c ~ i ~ u can
e s be e ~ p ~ o y etod
xtend asset life or reduce the level of main~enancerequired, to
them in service. As
ind~cated in the previous section, purely ti~e-basedmainten
ent being ma~ntainedtoo early or too late. In both case
u n n e c e s ~ ea ~x ~ ~ n d i ~ r e ,
therefore need to develop a data model of the asset, which can a c c ~ ~ t ereflect
l y Its
n, m a i n ~ e n ~requirements
and life span. In many cases this can be
wealth of historical data, coupled with on-line indication of performance. ~ n f o ~ a t e l y
this is not a~waysthe case and we are left with the problem of developing a model based on
tions and very little feedback from the asset itself.
toring of assets is not
of the pop~ation,accessi
sampling techniques to e
n based on tests performed on
~ I e c t ~iscthe
i ~~ d e ~ g r co ~ d

~ ~ d e ~ g Cables
r ~ ~ n d
V and 17500 km of LV under
The s ~ ~ o n network
d a ~ consists of 8500
cable. The e n v i r o ~ e nin
t which it exists makes it difficult to mon~tor,~ l n e r a b to
~ e~hirdularly with the high level of excavation a c ~ vwi i~t ~ i nLon~on,and
network account for nearly two-th~dsof the inte
s ~ a ~ e g i c ai ~
m~py o ~ to
t the com~any.
d cables, investment must be targete
r e a c ~ n the
g end of their useful life.
It is essential, therefore, that we are able to derive a meaure
~ n d i v ~circuits
~ ~ a l and even localised sections
on a circuit has ~adi~ionally
been accepted
e f ~ ~ c t ~The
v ~ assumption
has been that the per
failures against asset life, or at least the middle
this approach is owing when the particular asset has re
f a i ~ ~ r ewithout
the volume of these failures seriously
need to consider the generic model of the ba
focus on the bottom ~ o ~ ofothen curve.
Figure 9.2 d e m Q ~ s ~ taeseries
of curves with v a ~ i n grates of fai~ure
their life span. The ideal situation would enable us to ntifj small increases
dicted by the latter
as the b e g i ~ ~ nofga steep increase in the failure

~ ~ d i c a tthat
e s the slope on many of the small va~ationsis s





How long?

ath tub curve p r e d ~ ~failure

t ~ v ~mode

entify some other means of

in^ tanda~dsof network


edicting ~ a ~ lif~ we
r e are to a v o i ~

lem is to analyse the fau~ts
cable or joint being an
to lead to similar failur
s provides the crucial key
d where they are most likely to occur.
o ~ r ~ modes
m a of~ failure:

t ~ g e t e dcon~itionmonitoring t e c ~ i q u e scan i tify i n ~ i ~ i d ucirc~its

of failure, Some of the condition m o n i t o ~ techniques
Tan 8 and delta tan 6
Zero sequence impedance
P a ~ i adl i s c ~ ~ mapping
time domain reflectrometry.
E: Cable failure from overloading itself is rare but most f a i i ~ e cs
to thermal runaway in the insulation
~ o i in
the insu~a~on.
c o m ~ a r a ~ i ~rare
e l y in the UK. Condit

Partial discharge mapping

~ ~ ~ l e cLoss
t i cangle (Tan 6)
ielectric Loss angle with voltage (
al imaging of t e ~ ~ a t i o n s
onic aging and ~ i s c h a r detection
uted ~ e m ~ e r asensing
~ r e using fiber optics
series of tests have
pressure test as an indi
re ~ x ~ ~ n stests
i v eh
e ~ e a s u r e ~ ~The
n t . Q ~ j e c ~ of
v e these 0th
p e ~ f o ~ a n of
c e the re~ainderof the circuit,


.3 Partial discharge map of 1i kV circuit

es have been lo eloped at

the circuits in ~ o ~ ~ i s s ~ o n ~

Power System Restructuring and ~ere~ulation


.4 Zero sequence impedance values for 1 1 kV circuits

ers expectations for the reliability of e ~ e c ~supply

c i ~ have signi~cantlyincreased
in the last 30 years and this trend is likely to continue. Reflecti~gthese expec~tions,the
regulator monitors closely the performance of the electricity distribution companies and
strongly encourages them to reduce the number and the duration o f service i n t e ~ p ~ i o ~ s .
Some of these i n ~ ~ ~ pare
t the
~ ounavoi~ab~e
~ s
consequence of essential m a i ~ ~ e ~ a n c e
or repair work, A few results from operating errors while a significant number are caused
by acciden~lor intentional damage to the equipment. However, a large majority of these
outages is caused by ~quipinentfailures.
The rate of occurrence of intemptions caused by premature ageing or deterioration
could be reduced if ail the installed equipment were replaced by new equipment.

Asset ~ ~ a g e m ~ n t


~ o n s i d e ~ nthe
g enormous investment that such a replacement would represent and the
in the demand for electricity, this re~rbishmentmust be
d of time, To optiinise this replacement pro~amme,it is
in new equipment are likely to have the largest effect on the
reliability of service, i.e. to know which equipment is most likely to fail soon and ought to
be replaced first,
If failures occurred on a purely random basis, rep~acingany piece of equipment would
have the same effect on system reliability.
On the other hand, if it was possible to show that a single factor (e.
insulation used for cables) has a much stronger negative influence on the
any other factor, the replacement policy would be simple: all cables
~nsulationshould be replaced first. A review of the existing literatu
suggest that the actual situation is considerably more complex than either of these
For example, while it is clear that cable failures do not occur on a purely r
a number of factors seem to contribute to their probability of failure. These factors include
age of the cable, the method of installa~on,the type and
e cable is buried, the instantaneous and historical loading
of the circuit and the previous o c c ~ e n c of
e faults in a particular cable section.
Faults are comparative~yrare given the asset base and have multip~ecauses. As a resu~t,
chance is the scourge of fault research. The same unsafe behaviour may in one
shed yet in another result in a catastrophic fault. All sorts of external
ce the outco~e:weather, co-workers, Ioading, mechanical failure,
prediction of large amounts of variance in fault likelihood extremely difficult.
Future research, having demonstrated a relationship between an unsafe b e h a v i o ~and
faults, should then focus on the inves~~gation
of factors that predict that unsafe behav~our.
This change of focus has ready happened to some extent in relation to driving acci
It is well established that driving above the posted speed limit is predictive of road traffic
acc~dentsin the long run. However, any attempt to demons~atea direct link between
as measured in a single &udy and the occurrence of accidents within that study is
to meet with success. Most speed in^ goes unpunished by negative consequences.
wever, that does not mean that speeding is not ~ p o ~ inn accident
Therefore, much research is now dedicated to determining the characteristics that are
associated with this dangerous driving behaviour. This approach could also be a~optedin
fault causation analysis.
Cracking down on relatively small numbers of repetitive faults may have
effectiveness in changing overall performance (though it i s vital in terms
specific ~epet~tive
failure targets). What i s required are co~termeasuresdirec~edat the
whole population. Weather-related faults would appear to be such a group where the fault
ot be located at the extremes of the normal distribution^ The problem of
faults may require an approach which focuses on fault causa~ionmore
broadly conceived, rather than maintaining a rather narrow interest in individual
differences in fault liability. It is recommended that future research also consider this
So far, researchers into fault liability have focused almost exclusively on those factors
that predict inc~usionin the fault group, which in most populations is much smal~erthan

the no"fau1t ~ r o and

u ~ subject to a high chance factor. Perha~sfuture research will also
evote a~entionto those networks which manage over a long perio
e the factors that promote fault ~ v o ~ ~ aItn would
a i ~ at
~ encoura~ing
such factors. A n ~ t ~ ensi~le
shift the focus af ~ n t e ~ e ~towards
~ o n s the ~sitivebenefits of av
ative ~ f f e of'faults.

a m e s had been ~opularfor a n

d as the unit cost of' a


Asset ~ a ~ a g e m e n t

~ r ~ d u c t iLevel

~~~~~e9.5 ~ e n c ~ m a r kperformance
matrix for subsration m a i n t ~ n a n c ~


Asset Lijecycle

~ a n a g ~ of
~ ea nlarge
~ portfolio of assets also necessitates tbe ~ a f l a g ~ of
~ ~risk.
~ ~ i s ~ o ~ cthe
a lgrowth
~ y , in usage of electricity has not been linear and we should not be
Pised to find that our asset base has not been c o n s ~ c t e dat a c o n t ~ ~ u o rate.
9.6 details the a ~ ~ r o x i age
~ a profile
of London Electricitys major assets, i n d i ~ ~
peaks of i n v ~ s ~ ~~ f ~l t rthei 1960s.
~ g

Power System R e s ~ c ~ and

~ nDeregulation


Age-related replacement of assets will clearly lead to similar peaks in invest men^ in the
future. Asset management techniques, such as condition based monitoring ( C ~ ~can
) ,be
used to extend the life of individual assets - assuming that they are in good condition. C
can similarly warn of the need for early repIacement without the need for failure to occur.
Another useful technique which is available to companies with dynamic networks is to use
other work as a driver for replacement.
This is best illustrated by the following example. A typical substat~onconstructed in
the peak i ~ v e s ~ eperiod
n t of the 1960s would be a 4x 15 MVA transformer site with 16 1 1
kQ feeders. Its modem-day equivalent would be a 3x60 MVA double secondary
transformer site with 36 feeders. Reinforcement of one substation in an area can normally
enabfe a hrthex two similar substations to be removed, thus avoiding the need for
replacement. Extensive use of this technique normally requires an element of load growth.
Even if we do opt for an age-related replacement programm~,we need to plan for R
more gradual replacement programme. The easy option is to replace assets before they
reach the end of their useful life. Our task as asset managers is to manage the risks
associated with pushing assets closer towards the end of their usef~llife by i n ~ o d ~ c i n g
alternative options, or devising ways of closely monitoring their performance.
The actual life in service of assets may frequently be observed to be lower than the
accoun~inglife of plant, as used for depreciation by compan~es,or the much higher
assigned service life. This difference has normally been driven by reasons other than
replacement needs such as: upgrade for load growth, faults, change of b ~ i l d ~ noccupancy,
diversions, etc
Figures 9.7.and 9.8 show examples of actual life in service where this has been less
than the assigned service life. The data represents all secondary transformers and
secondary switchgear removed from the London network since 1991.

Actual life in service 5 e c ~ n d ~ransfor~er


36 years)
(average age at ~ecQrnis~iQ~ing

~ 9.7 Actual
~ life in
~ service
e - secondary transfomler


Actual life in service. secondary switchgear

(average age a t decomissioning . 34 years)




43 48 37 34 31 28 25 22 19 16 13 10 7
ure 9.8 Actual life in service - secondary switchgear

Condition monitoring and assessment provides a very useful guide to the s

that need a ~ e n t i owithin
~ the next review period but are less usefui at present
i n v e s ~ e npt ~ a ~ i n g .
Several models have been used by London Electricity to assess possible asset
rep~acementrequiremeiits in the long term (e,g, beyond the next rice review period).
These use a number of tecliniues for projecting the current profile of assets using d~fferent
replacement regimes.
The most e l e ~ e n t areplace~ent
p r o ~ l emodel is one that gets r e p ~ a c e m eo~ ~
assets in the year they reach the end of the assigned service life. his will have the effect
of recreating the same age profile curve as the present population
The models used by London E l e c ~ c apply
i ~ a spread of replacement ages c e n ~ ~ e d
around the ~ s i ~ n service
e d life. This is ~ n t e ~ d etod rep~esenta more r e a ~ ~ sview
t i ~ of the
range of ages at which assets will be replaced, caused by the impact of the widely v a ~ i n ~
drivers for rep~acementsuch as safety, obsolescence, eny~ronmentan
The shape of the replac~ment profile can be selected to represent how wide the
variation from the average service life is likely to be. The most simplistic ap
take a flat profile, which replaces an equal proportion o f the asset popula$~onover a given
period of time. Figure 9.9 shows 7.5% of the population replaced each year over
eriod. The effect o f this is to create a new profile of assets which is smoothe
has a wider spread by I5 years.



Power System ~

~and~~ e ~
c e ~~ l a it i onn ~

~aintenanceis only one aspect o f effective asset ~anagement.The ability to exten

useful life o f an asset can be based on the amount and quality of the r n a ~ t e n ~ c e
out, but it can e q u a ~ ~bey affected by the ability to b a ~ ~ bc een e ~ ~a sg ~ n costs
s ~ in the
overall replace~entand investment strategy. ~ o l e s a l ereplace men^ of assets is m
expensive business and we need to ensure that our investment is always t ~ g e t e dat those
areas which provide the most benefit.
London Electricity has been deriving a methodology for devel
ers in the c o r n p ~ yand p
invest in order to m a x i ~ i s
s assigning values to n o n - ~ o n e benefits
as well as e s t i ~ t i n g~ o t e n t i acost
involves c o n s ~ c t i n ga model o f the project or
diagram to ensure that all internal and external influence
in eyaIuatin~the benefits of a particular project and the way in which it is i~plemented.
.12 indica~esthe ~ u ~ u ~ a t ci ov se ~ ~ n e fana~ysis
of a
Prom this we can judge which projects provide the
nt and allow us to prioritise within budget or caqh flow GO

"12Cumulative c o s ~ e n eanalysis
of project portfolio

The steep slope at the beginning o f the curve indicates that the projects at this end
efit to cost ratio, whilst those at the other end appear
need to recognise the impoi~anc~
o f a less b ~ e ~ c ~ a l
her, more beneficial, project upon it. This is illus
in the c m e .

Asset ~ a n a ~ e ~ e n t


Each of these individual projects can similarly be evaluated against a variety of

such as: do more or ~ u ~ ~ kdo
e rless
or slower, do nothing, etc. This enables ev
a~tenancedecis~onsto be calculated as well as the
of optimal rep1
Deferring rep~aceme~i~,
refurbis ent QT maintenance always has a risk a ~ s o c ~ awtit
it. The use of a f Q ~ amethodotogy,
which evaluates costs against bene~ts,
useful risk management tool for all the staff associated with and affected by the ~ecisiQns
The variabili~yof eleme~itswithin each project are also assessed for c r i t ~ ~ toa ~ i ~
eliminate statistical unce~aintyassociated with those elements which do not sign~~cantly
impact on the overall project. This allows us to concentrate on those elements where we
need to be more accurate in a$sessingprobabili~~es
or variabilities.

London Electricity has been developing a technology strategy to ensure that all pot~n~ial
for the network are c o m p l e ~ e n tto~ each 0th
ogy strategy has been to ensure that state-of-tl~e-~
evaluated and potential operating cost savings are i d e ~ t ~ ~ e d .
The various s t r ~ d of
s the t e c ~ o l o g ystrategy all need to build tow
objective o f p r o v i d ~ ~the
g degree of network p e r f o ~ a n c erequi
can be evaluated on its own merits but, in general, those projects
eluded in the i n v e s ~ e npo~folio.
of the remote t e ~ i n aunit
l (RTU) ~ u ~ e n t ~ y
he 1 1 kV network. ~ d d i t i o n afeatures
been built into these units to facilitate the transfer of data from the LV s y s t e ~when
n . kin
s u ~ ~ bdev~ces
have been ~ a n u f a c ~ r to
e dobtain the required ~ n f o ~ a t i o This
specification would nob be possible without such a cohesive strategy.
Much o f the monitoring
experirnen~lbut it is already possible to install power
outage d i s ~ ~ a n csensors
) in the premises of a customer who has s ~ f f e r e ~
will contact the control centre in the event of a s
failure via a telephone line. Fault passage ind~catorsinstalled at
on the LV
n e ~ o r kp r ~ v ~ dmore
e localised i n f o ~ a t i o nabout the positio
which will
eventually be relayed back to the office via the RTU. These RTUs also have the ability to
~rovideon-line loading and status information for the subs~tiQn,which can provide
e n f o ~ a t to
~ othe
n network planners and analysts.
Other work has c o n ~ e ~ t r aon
t e ~ensuring that many of the i n ~ e p e n d e ~ developed
i n f o ~ a t i o nsystems, for con~ol,n e ~ o r kdesign and analysis, etc., are able to share
i n ~ o ~ a t i via
o n a data hub.
A ~ ~ o ~major
h e r task has been the development o f a more proactive version of the partial
harge mapping ~ e c ~ i q mentioned
previously. Continuous d i s c h ~ g emoni~orin
and EHV f e e d e ~is economic and this, coupled with the ability to switch the
network remotely, could facilitate the isolation of potentially faulty sections without


re' injection of gas an silicone fluid into the circul

cables to remove mo re and fill voids is esrablis
les can be re~rbishedfor ~ i c a l ~less
y than a
w ~ e r ed ~ e c t - l a ~ d
ently most HV cables in the UM have generally be
r e p l a c e ~ ~ cost.
paper insulate^ with lead or c o ~ g a t e da l ~ n i u msheaths which are u
t e c h ~ i q ~At
e . prese~there are no v~abler e ~ r b i s ~t e c~~ti q u e sfor
cables but p r e ~ ~ research
~ ~ n work
a ~ is under way to establish the
i s h ~ e not f oil and gas press~rec
f these circuits where t h e ~ a expansi

s and the ~ o v e m e nof~

uce pressures and real
yed. The presence of
o s s ~ b i iof
i ~limite
is extremely rare

assessment of the rel
~ ~ ewill
n tinclu
c relati~nscQnse~uencesto the who1
iate risk control n~easures.
For power s y s t ~ ~risk
s may be consi~e

e its o w mix
~ of the co~ponentsof ris

risks o

. ~ ~ e c t i asset
ve m
ts with higher that


witchgear reduces the risks o f failure.

with timely r ~ ~ e ~action.

~ for this


Power System Restructuring and

A u ~ o ~ a t esecurement
and/or remote restorat~on of supplie with r e a l ~ t i ~ e
telemetry, which can significantly reduce the p o s s i b i l ~of
~ overloading and
s e c o n d a ~failure which if sustained may cause far more exte~sived a ~ a than
g ~ the
erhaps simple, failure.

mising the number of customers affected through active risk m ~ a g e m e n desi

systems and the use of appropriate protection zones,
owing the s t a ~of
s the network and keeping cust~meradvised.
viding restorat~onin seconds or minutes, not hours.
g ~ e q ~supplies
t e of spares and skilled resources.
hing c o n ~ ~ n g e plans
n ~ y and r e ~ l a r l yexerci~~ng
Laying off some of the financial risks, contract exclusions and i n s ~ ~ c e .
~ e , as the c o ~ n c i d e nloss
~ ~o f
Some events that may ~nitiallybe cons~deredi ~ p r o ~ a bsuch
~ u ~ t i pindependen~
circuits or of substations, may neve~he~es
be w
respect to the physical, political and economic environment. Some
m their flight paths, failure of flood defence^, e a ~ h ~ u a k ete~orism,
a1 disputes, computer viruses, etc., may
when combined with s~ppliesto central business districts, CO
the n~edia9
security and transport services.
Asset ~ a ~ a g e m e strategies
for these si~ationsmight
from outside the ~ n v i r o ~ e zones,
n ~ l fall-back or manned
generation or just a ~arge~ed
set of cont~ngen~y

r ~ncid~nts
are f o ~ n a t e l comparative
will account for around 10% of customer
incidents often seem to arise from a unique set of circ
te types of events using large pop~~ations
~nderlyingp a ~ e ~ strends. Such analysi
proportion o f sue
for e ~ ~ ~ pthat
l e perhaps
a h
s and that even these are most often as
~ n ~ l l eord ~ a ~ n ~ ~orn that
e d a9 cerlai
u~tomers~ e i n ga ~ e c t e dfor
ons can result in 1
# ~ ~ g for
e si ~ s ~ e c t ~an
times w h i ~repairs
are e ~ e ~ ~ e d ,
lar e ~ u i p m e ncan
~ r
~ s a i ~ n i ~ c aloss
n t of r e s o ~ c e
romised for prolonged p e ~ o with
Erip testing is a key p e r f o ~ a n c e~ d ~ c a tthat
o r the ~reakerwill
do so. With the increase in remote ~ ~ nfaeili
~ o l
from con^^^ ~ e n ~and
ied out on both p
~ dmsec on^^

will inc~~asingly
be performed an reported automatically, rdeasing maintenance staff to
tackle other activities.
Correct ~nstallationand c o ~ ~ i s s i o n i nofg lant and equip men^ is critical to both life
cycle costs and system reliability:
t i vmodi~cations
and circuit out
Primary system and bwbar ~ o d ~ ~ c a t ipost-commissioning
with t h e ~ and
a ~discharg~ ~ e y s .
Exercise MSS circuit breakers remote1~re larly, e.g. twice a year.
1 inspection o f outdoor i n ~ l l a t i ~and
n s precautions against flying debris.
mise repair time on first circuit outage.


Type ~ ~ i ~ u ~ ~ s

The economics of purchasing often meam that large ~uantitiesof the Same ty
~ a n s f o or
~ ea ~n c i ~ l aequipment
are p u r c h ~ eand
~ ~ n t a ~ ~ine d
p r o x i m ~on~ networks hat are being built, e x ~ e n d eor~ ref~rbishedat the
Experience has shown that whilst the widespread catastrophic failure o
equipment is rare, problems that could lead to longer term failure
more often. ~ e a ~and
t h safety consid~rationsm
live operation o f the plant to be restricted until after it can
ection and modi~cation.
e failures can present the operator with very
e sections of networks could be rendered hop
This is
icularly the case with wholly ~ d e r ~ Q u n d
e line overhead work does not e
where the oppo~uni u n d e ~ k live
Is0 be necessary to effect the necessary re
repeated outages CO

e failure can be managed by:

~ e l e c ~ enqgu i ~ m ~with
roven excellent p e r f o ~ a n c erecord.
Actively maintaining a d sity of ~ a k e types
s ~ and versions o f e q u i ~ ~ et n t ~
networks so that a type failure of one
e does not result in widesprea
For new types of equipment and changes to existing desi
m ~ u f a c ~ r to
e r participate in formal and independent failure
can ~ d e n tand
i ~ addre$s the probabili~and consequ

Common mode failure can occur where a single incident places a n

component at risk at the same time. Typical causes o f common mode fai~~ires
age to overhead lines.
e c h a n ~ ~excavatQr
damage to several cables in the same ~ e n c h .

Power ystem ~

e from frre in a $ w i t c ~ ~

t and~

tive regimes that are increas

liver r ~ ~ u ~levels
r e d of se
loss arising from IOSS
rcial tower block coul
be found liable for the

Asset ~
~ is the key
~ to effective
o asset ~~a n a g e m ean thowev~r
data to c a ~ ~ rhow
e , often how to store it an then how to use it e f f ~ c ~ i ~ e
or w i ~ ~ cost.
too much data in
appropriate^^ large costs in
r ~ s ~ o nto
s ea st
m a ~ ~ t ~ n ~ ~ ~ .
There is a real cost to collect~~g
and ~

~ ~ m ~ time,
t e d in order to
r factors can be a simpl

Power System ~ e s ~ c and

~ m g

cally dis~ibutionc Q r n ~ ~ ihave

e s a n u ~ e r o u asset
r n ~ a ~ e m eIT
n t s y ~ t ew~ s~ ~ c h
aged effectively can exhibit ~ r o b l e in
~ sthe f o ~ ~ o w areas:

unavai~abilityof data for strategic analysis and business reporting, and

~ ~ lof~a ~dt os~ a t i othat
n cannot exchange information.
These ~ ~ Q b ~we
e rdue
n ~to the lack of a strategic integration architecture enabling the
easy ~ e v ~ l o ~ mand
e n texecution of electronic ~terfacesand the rocesses required to
on solid ate ~ n f o ~ a tfor
i ~strategic
analysis and
The IEC 61968 series System Interfaces for
on ~ a n a ~ ~ ~iseintended
n t to
fac~litate inter-application integration of the various d i s ~ i ~ u t esoftware
orting the rn~agementof utility efectrical ~ s ~ b u tnie~~ no r k s ~
Figure 9.13 clarifies the scope of IEC 61968-1 graphically In terms of business
~ n ~ t ~ oand
n s shows a distribution m a n a g e ~ e nsystem
with IEC-6 1 9 6 8 - c ~ ~ p l i a n ~
~ n t ~ ~ f~a cc he i t e c ~ r e .

Distribution ~ a n a g ~ msystem
~ n t with IEC-61968-com~liantim~erfacea r c h i t ~ c ~ r ~

Asset ~ a n a g e ~ e n t

9.17. I

Asset ~

a~ ygs t e~ ~ s~

Asset management systems typically hold data, including ownership costs, on all the
electrical assets, linking them together via parenuchild relationships. These s y s t e ~ s
normally share a comprehensive power system model with other app~icationsso that
operational and planni tools and data can be employed as part of asset manag~men~.
scale of the data
~ n ~ e ~ r systems
a t ~ d are mparatively new in many companies and
a chance to prove
collection va~idationcan be immense, SO many systems have not yet
ment are as plant
their full worth in monitoring lifecycle costs etc. Proven uses at th
database and ma~n~enance
schedulers Iising network analysis and continge~cy
tools. ~ a r i a b l ema~tenance~ g g e r cs be set within the database and co~dition
r inspection visits,
and defects recorded from mainten
The p e r f o ~ a n c eand effective life of otherwise identical assets is largely driv
duty they are required to perform and the environment in which they operate. An
benefit o f inte~atedi n f o ~ a t i o nsystems is the ability to download large secti
for off-line analysis and data mining to understand and exploit the re~ations~i
p e r f o ~ a n c eduty
and environmen~.

The data required by asset managers typically resides in several s

te databases each of
which has to be desi
opulated and mainta~nedby an
ve set of busi~ess
The equipment database contains information about the items of plant and circuits
which make up the dis~ibut~on
network. The volume of the assets and the varie
i n f o ~ a t i that
o ~ i s a~ailableabout each and every type are very jar
are p a ~ c u l a r lcomplex,
ofcen requiring multiple spatial repre
potential users of the data to access the i n f o ~ a t i o nthey need
manufac~rer,speci~cation,age, insta~lationmethod, condition,
loading, electrical parameters, etc. The recording of costs again
ard as cables are continuously being cut into n
atabase will typically desc
and circuit location of the faults which have t
network over at least the last three years an
of estimatin~the number of custo~ers
widely from company to company, Tigh~er r e e l
arrangements will require consistency o f reporting be
ing o f end use custom
a solution to this issue
ase could be a major unde~akin
c ~ n n e c t i vdown
i ~ to indiv~dualckcuits and phases at LV with~nthe d ~ s ~ i b u tsystems
ividual blocks of fiats and offices. The costs of such systems and their ma~~tenance
not easily be j u s ~ ~ ~
e d the consistent applica~onof simple e ~ t ~ ~ a t i o
could well s u f ~ c e .

Power System ~

~and t

at the most reliable data comes when it is c o i ~ in~the

c field
~ ~ by
s of faiIure ~~d who
the data co~~ection
and to the c o ~ ~ a ~ y .
ce of accurate data collection
e n ~ ~nleea r - r e ~ ~ - t i ~ e
a collection t e ~ ~ n aand
l s radio te
data with insta~tq ~ ~of ev a ~~ ~ eor
~ e~~ u ie n c~eof~ d a t ~that
ime series data that is routinely requi
t, s u as~t r a~n s o ~ eand
r fee^^ ~ o a ~ tern
~ g ,
is no longer cost effective in a t i g ~ t ~regul
ngly s e c o n d a ~sub
able to provid~CO


the ~

the ~ n v i ~ o n ~ e f l t
~u~ circuits and

~ in, t hor o ~ ~or

~hov e
This will ~ s u a l ~inc


uilt e n v ~ r o ~ e n ~

idity, water table, s ~ n ~ s w e l l

resistivity, stability
on, co~osion,vibration,
tion, thermal s ~ ~ r c edas ,

y no ~ e a exhaustive.
~ s

ill also need to r n ~ the

~ effect
a ~ ~
e, Pr
patia~i n f Q ~ a ~ icoonn c e ~ i n gc Q n s ~ a ~such
~ t sas:

areas of o ~ t ~ t ~natural
n d i beauty
~ ~

is also es~n~ial.

y people tend to include

e~oneousor ~ncompleterec

can also be subject to CO

Power System Restructuring and ~ ~ r e g u ~ a ~ i o

tier registration information, and yarticularIy information that wou~df a c ~ ~ i ~ a ~

c u s t o ~ esegmentation
ust tom er c o n s ~ p t ~ data,
o n and particularly half-ho~lyload shapes.
Advance information regarding the setting of future DUOSprices.
~ ~ f o ~about
a t the
~ c~r end ~ ~ - w o ~ hof
~ esuppliers.
Asset ~ a ~ a gwill
e ~need
s to ensure that only those having a p p r o p ~ a rights
t ~ and a ne
ow can have access to, copy or export ~ f o ~ a t i that
o n is to be regarde~as ~ o n ~ d e n t i a l ,

As operating margins become smaller and further efficiencks becomes more difficult to
~ e ~~ ~~ ~~ r~q~~
$ aa, lsof
i ~~i ndf o ~ a t ~ obecomes
ever more essential for the eff~ctive
it is essentia~
For r e ~ l a t as
o ~well as asset m ~ a g e m e npurposes

~ o m p a r a bacross
l ~ companies
onsistent over time
Collectable at reasonable cost.
ata c o l ~ e c ~will
d be used for asset r e g u ~ a t o ~
c regimes, there will be a need to be able to demon
and timeliness of the data. One way of managing
q u a ~m
i ~a n a ~ e ~ e n t cesses such as those QE the IS0 900
audits that run s ~ c ~ e d
sequenc~sof data
studies, ~ o ~ ~ results
a ~ with
n gthose p~viouslyobt
for ~nvestiga~ion,
can also be used to s ~ ~ i ~ cadv

None of the above examples indiv~duallycan provide the solution to the problem o f how
we ana age our assets. A combination of all, or at least so^^^ of th
s o l ~ t i ~which
n , matches the point on the e v o ~ u t ~ o cn au~~ which
at this moment in time. The only ~~~~~g
that is certain is that '
overall model will continue to change as more information bec
ome more e s ~ b l ~ s h eord more varied, or if p r ~ s s u r ~
other s~keholderspushes investment decisions in a new
is to eva~uatec Q n t i ~ ~ a l the
i y b e n e ~ t sof in&
inst the cost of installation and operation. We
the principle of condition ~ o n i t o ~ and
n g data collection, lest we forget to
high cost associated with both the co~~ection
and an
~eaTingin mind that the most effect~veway of i ~ e n t i ~ i when
of a ~ a ~ u a l~l y~ ~ e n item
d e of
n ~ ~ u ~ p msuch
e n ~as, an isolator, requires m a i ~ t ~ n aisn to
ask tbe last p~rsonwho o ~ e r a ~ it.


Asset Management


Large power t r a n s f o ~ e r sare probabIy the most important equipment in an e ~ e c ~ c a l

system. Correct diagnosis of their incipient faults is vital for the safety and ~ ~ I ~ aofban~ l i ~
in-service ~ a n s f o ~ ise rsubject to electrical and the
c l e c ~ c anetwo
n the insulating materials and release gaseous
which can bre
products. Qverheat~g,partial d i s e h ~ g eand arcing are three primary causes of faultrelated gases. There are many i n t e ~ r e ~ a ~methods
based on DGA to diagnose the nature
of transfomer detcnoration, such as the IEC ratio codes which were developed from
ions on gases generated from individual faults.
has widely been used in the industry, in some cases, the conv~nt~onal
osis incipient faults. This normally happens for those tran
e 1ype of fault. Actually, the conventional d i a ~ o s ~me
based on the ratio
es generated from a single fault or from ~ u l t ~ faults
one of dominant nature in a transformer. When gases from more than one fault in a
t r a ~ f o ~ are
e r collected, the relation between different gases becomes too comp~ieated
~ e d
and may not match the pre-de~nedcodes. For instance, the IEC codes are d ~ ~ from
certain gas ratios. When the gas ratio increases across the defined limits (boun~aries),the
code changes suddenly b e ~ e 0,
~ 1nand 2. In fact, the gas ratio boundary may not be clear
(i.e. fuzzy), especia~~y
when more than one type of fault exists. there fore^ between
different types of faults, the code should not change sharply across the boundaries, A new
m e ~ ~ has
o d been developed to employ fuzzy boundaries between differen~IEC codes.



, the IEG codes have been used for several decades and eonsiderable ~ x p e ~ e n c ~
a c c u ~ u I a ~ ethroughout
the world to diagnose incipient faults in t r a n s f o ~ e
used to determine each ratio and its assigned limits are shown i
s are then allocated according to the value obtained for each ratio
corresponding fault characterised,

The Fuzzy IEC Code - Key Gas Method

The fuzzy IEC code-key gas method (FIK) developed is a eomb~nationof

diagnosis using IEC codes and key gases. This method produces nine fuzzy comp
onents are related to the fault types as d e ~ ~ i in
e dT

IEC codes

Fault c l a ~ s i ~ c a t~i oc~c o r t~o nthe~ E C Gas

1 or2
ischarges o f high energy

Thermal fault of low t ~ ~ p ~ ~ a ~ ~ r e

1~0-330kV power ~ a n s f o ~ ewere


with IEC me~hod,the FIK method also h

es, 13 ~ a ~ s ~ ocould
~ e not
r s
method, as shown in Table 9.3
Its may be only at the early
ive a s ~ o n g e indica~~on,

nspectian of anothei
re d
~ due to
a e ~

charge o f high energy

Thermal fault { 1~0-300"~)

Thermal fault ~300-700'~) Actual fauIt will be
Thermal fault (>70QoC)
checked during the
next o v ~ r h ~ ~ ~ .

Power System Restructuring and Deremlation



F( 1)=0.053

Normal ageing
PD of low energy

IEC cannot diagnose

but FIK indicates a



No match

No match

F( S)=O .050

Discharge of low energy

Discharge of high energy
Thermal fault (450C)
Thermal fault (150-300C)
Thermal fault (30O-70O0C)
Thermal fault (>700"C)

F( 1)=0.052

Normal ageing
PD of low energy
PD of high energy
Discharge of low energy
Discharge of high energy
Thermal fault (<150C)
Thermal fault (150-300'C)
Thermal fault (300-700C)
Thermal fault (~700C)



F( 1)=0.005


F(4)=0.0 13

Actual fault will be

checked during the
next overhaul.
IEC cannot diagnose
probably due to the
e x ~ s ~ ~ n of
c e more
than one fault. The
fuzzy compo~ent of
the early thermal
fault indicated by
FIK is useful for
future trend analysis.

Actual fault was an

arc damage to the
PD of low energy
fault but actually
PI3 of high energy
Discharge of low energy both medium- and
faults existed as
Thermal fault (cl50'C)
Thermal fault ( 150-3OOOC) indicated by FIK.
Thermal fault (300-700C)
Two locations o)
Thermal fault (>7OO0C)
overheating damages
were Jound due lo
eddy currents and a
bad cantact.

fault (300- F(44)=0.030

which could be at an
early stage.

PD of low energy
PD of high energy
Discharge of low energy
Discharge of high energy
Thermal fault (450C)
Thermal fault (I 50-300C)
Thermal fault (300-700'C)
Thermal fault (>700"C)

Although the gas

level is below the
guide value, an early
indication of low.
energy discharge by
FIK should be useful
for trend analysis in
the future.
Actual fault will bc
checked during the
next overhaul.

Asset Mana~ement


~~e~~~ ~ u l y sqfi sI ~ d i v i ~d ~ ~a ~ u

In FIK ~agnosis,a fault can be more accurately determiiied by its fuzzy component that
indicates the likelihood or dominance of the fault. Deterioration of the fault may eref fore
be closely monitored from trend analysis. This technique has been used for a
that was tested over a 15-month period. ermal faults of medium- and high
(300-700C and >7OO"C) were diagnose y the FIK method and the fuzzy
agaiiist the test time are plotted in Figure
. The graph clearly shows the de
each thermal fault in this t r ~ s f o ~ eItr ,can be seen that at the begi
monitoring period, the medium ~ e m p e ~thermal
~ r e fault F(7) was the main p r o b l e ~o f
this ~ a n s f o ~and
e r the fi~zzycomponent of the high-tempera~retherm
mall, i.e. below 0.05. The high-tempera~rethermal fault F(
14 onwards and then become stable until Day 406 when the
ssing, because the ~ ~ efaults
~ remained,
a l
the fuzzy compo
went up again from Day 453. It took a few weeks for the gases to be re1
in the oil to a sufficient level for accurate diagnosis. A small fluctuation of F(8) was
recorded on Day 178, which might be due to the lighter load during the s p e c ~ ~time
mponent F(0) always
It must be noted that if a transformer has no fault, th
gives a large value in th anga of 0.6-1. For example,
results for a hea~thy
t r a n ~ f o ~ are
e r (in ppm}
- 95, N2 - 73000, 02 - 11000,
- 25, C,H, 45 and C2H2 2. The fuzzy component o f no-fault ~ ( 0 ) ~ . $ 4 3
at no fault exists in the ~ansformer.The IEC codes are 0, 0, 0, also i ~ d i c a ~ n g
no fault. From OUK experience^ when the value of F(0) is between 0.3 and 0.6, an inci
fault may have occurred at earlier stage. When the fault is getting worse, F(0) will
decrease to CO, 1.
















a1 fault ~ 0 ~ ~ degree
7 0 0C

The trend of tv.70 types of thermal fault in a 330 kV transformer determined by the FI

method developed has been succes

ers in Au5~alia.It has been proved that, using the

costs of ~ ~ ~ f o With
~ ethe~ aid
5 of
~such ~a5 the~ FIK~method,
~ the
longer s c ~ ~ life
c e could be achieved.





ario V.F. Pereira, Michael F. McCoy and Hyde BA. Merrilli, aging risk in the new power
usiness, IEEE ComputerApplications in Power, Vol. 13, No.2, April 2000, pp. 18-24.
Ceorge Anders, Robert Entriken and Puica Nib, Risk Assessment and Financial ~ a ~ a g e ~ e n ~
rial, IEEE Catalog Number 99TP137-0,1999.
Gorenstin, N.M. Cam~donico,J.P. Costa and M.V.F. Pereira, Power systcm ~ l ~ i i ~ g
under uncertainty, IEEE Transactions on Power Systems, February 1993, pp. 129-136.
ofilo De la Torre, James W. Feltes, Tomas Gomez San Roman, Hydc M. M e ~ I ~ ,
and com~etition:~ansmissionplanning under ~ c e K ~~ ~E ~ ~~ E
Transactions on Power Systems, May 1999, pp.469-465.
J.C. Hull9Options, Futures and Other Derivatives, Prentice Hall, New Jersey, 1998.
J. Schwager, A Complete Guide to the Futures: ~ ~ n d a ~ e nAnalysis,
Trading, Spreads, and O p t i ~ l lJohn
~ , Wiley & Sons, New York, 19%.
Price W~t~rhouse
LLP, The CorporateRisk Management Handbook, Risk ~ublications*

[S] P. Jorion, Vdue at Risk: The New Benchmarkfor Controlling Market Bisk, Irwin Professional
Pub., Chicago, 1997.
ouglas, A. A ~ ~ i aV.
n , ~iemcyer, . Goldberg, and C. Claxk, ~ a ~ i g a t ~the
n gc ~ ~of ~ t
risk, IEEE Power Engineering Review, March 1998, pp.6- 10,
[I01 D. Duffie and J. Pan, An overview of value at risk, Journal of De~vatives,~ s ~ i ~ t i o n a ~

en & Co., The JP M ~ r g a n / ~ r Andersen

~ ~ u r Guide to
cations, London, 1997.
[123 G.L. ~ a s ~ i n e a~ictionary
of Financia~Risk Management, Swiss Bank Corporation, New York,
[I31 Eilron Capital Trade Resources, an aging Energy Price Risk, Risk ~ b l i c a t i o n sLon
E141 R.L. Nersesim, Computer Simulation in Financial Risk Manugernemt: A Guide for Bwiness
P l ~ n ~and
~ r Stra~~gists,
Q u o Books,
~ ~ New York, 1991,
[ 151 Q. Su, 6. Mi, L.L. Lai and P. Austin, A fuzzy dissolved gas analysis method for the di
of multiple incipient faults in a transformer, IEEE Transactions on Power Systems,
2000, ~ ~ . 5 9 3 - 5 9 8 ,

Prof. JQS ~ ~ ~ l a g a
University of Canterbury
New ~ealand

University of Canterb
New Zealand

to deregulation, electricity has been generally sold from one supplier to th

ownership ~ h a n ~ i nhands
g at only one piiysical point. In con~ast,after
it is expecte~that the product will be exchanged at several points along th
and distribution systems and there will be power quality (PQ) i
1 location where ownerhipis transferred.
s, of course, an ~ b i ~ oterm
u s which in its b r o ~ ~ esense
s t is
quality including reliability of supply, waveform
In a d e r e ~ ~ a t environme~t,
only nationa~
and act on the i n f o ~ a t i o nnecessary to pro~idesystem secu
position, the grids can be unreasonably d ~ ~ a n ind ~ n ~
ation plant. In the long term, however, the expec~tio
will find s ~ ~c o~~ p ge t i ~t i ofrom
r dis~ibutedgeneration, bo
micro-hydro, wind and solar) and non-renewable energy
~ i c r Q ~ r b i nand
e s fuel cells), the latter in the k i l o ~ rather
logy used in these energy sources involves power
is now commercia~lyavaila~leCO
links and FACTS ~ ~ e x AC
~ b ~ e
power devices.
At the generation level, an increase in the connection of IPPs ( ~ n d e ~ ~ ~ d e n t
~ Q ~ u c e rsuch
as wind and gas"~e11ed ~ i c r o t ~ r ~ i n ewith
s ) p~Qrlyc

Power Quality

will make PQ more difEcult to control. The increase in embedded
~enerationwill cause ~ r t h e voltage
~ a g n i ~ variations
as well as introduce additiona~
voltage m a ~ i ~ steps
d e [2]. Wind power is known to lead to an increase i
severity. Solar power and the more advanced ways of connecting wind power wi
an increase in h a ~ o n i cd i s t o ~ o nAt
, the ~ a n s ~ ~ i s slevel,
i o n the need for ~ y s t e ~
to transmit power according to contracts between the requested locations is
a ~ c e l e r a tthe
~ d ~ ~ a for
n d s ~ ~ ~ e s - c o FACTS
~ e c ~ econtrollers.
In the
c o ~ p ~ n s a ~and
i o nunified power flow controllers are expected to be used extensive~yonce
they are shown to offer better technical features at reasonable costs.
m planning under deregulation will be more difficult owing to u n c e ~ a i n ~
in the gene~tionand load locations, fast solutions will be needed to improve the o~erating
conditions and FACTS controllers can offer such solutions with short delivery
installa~iontimes. The use of a s ~ c ~ o n o ugrid
s intercQ~ections,both national an
i n t e ~ a t i o n is
~ ~also likely to increase with dere~lation. The control1
asynchronous ~ ~ e r c o ~ e c t is
o rcurrently
limited by the switching restricti
silicon-controlle~rectifier, which only permits two-quadrant converter
direc~ionalactive power transfers, The a v a ~ l a b i l iof
~ gate turn-off
permits four-quadr~tconverter operation and considerable developan
on to ~ m ~ r o the
v e effic
d power h~ndlingcapabili~of these d
of two~quadra~tor f o u r - q u ~ ~ a n t
that w h e ~ e r in the
;lijynchronous link is
be an important player in modern ~ a n s m ~ s s ~systems
~ l ~ n and
~ nitsgi ~ ~ a c eeds to be carefuIly exa~ined,
Power elec~onic
whether in the form of as~chronousinterco~ec~ors,
FACTS or custom power, have the poten~alto improve various aspects of
e ~ ~ ~ control
o n ~at cd i s ~ i b ~ t i olevel
n may ~ i t i g a t evoltage v ~ a t ~ o n s ~
voltage sags. But the increased use of ower electronic controllers may introdwce new
erns like a ~ d ~ t i o nharmonic
voltage distortion, especially in the form of higher order
n a c o ~ p e t i t ~ environ
t there will be reluctance to expand
distribution sys~em,
customer interaction, And, at the loads ~ h e m s e l ~i ~ ~
costs will create an emphasis on local co~pensati
or active coan~onents. Some of these changes tend to de
loads of a cons~ant-powertype.
more c u ~ ~wh
ltage drops causing additional vo
use of Compensation equipment may even become
t of these prob~emsare not ex~~usive
to dere~ulation. In fact, there is a c ~ ~ t i n u i n g
s, such as adjustable speed drives, office equip~ent,
and ~gh-efficiency fluorescent lighting. At the same time, sensitive ~ n f o ~ a t ~ o n
ment, such as PCs, continues to be dispersed into power locat~onsthat
previously were res~ictedto lights, motors and heaters. There is no reason to b e ~ ~ e v e
this trend will reverse.
~ollowingderegulation, the power exchanges should be s~bjectedto close
s c ~ ~ i on
n ya continuous basis, This requires dynamic evaluation of the
~ e n ~ or
s by a combina~onof
and current waveforms, either by local ~ ~ a s ~ eexclusively
~ e a s u r e i ~ e nand
~ s sys~ems i ~ u l a ~ using
i o ~ h a ~ o n i cstate estima~io~

latter should provide more intelligent an economical solutions for the control of the
dito~ionp r Q b l e on
~ a system-wide basis. ~ e r e ~ ~ a t ~ o n
clear, for the most part, that the utilir
the customer. After ~eregulatio~,
however, who i s responsible for the
enerator? The e ~ e r g ysup lier? The d i s ~ ~ ~ t o r ?
to con~sion,and po~siblyto an i n c r ~ a s ~
in d i ~ ~ t e s .

the quality ofpower has become e

cts that help correct PQ problems

y local electric utilities have

b e n e ~ t sfrom moiiitori
ta with ~ndividual~
at those custo

a d i $ ~ b a n c ei s a temporary deviation from the steadyIn the con~exto

Its of brief durat~onor by sudden changes in
w a v e f o ~caused
dis~rbancescon~ideredby the ~ n ~ e ~ a t i o~n la el c ~ o t e c ~ Ci c a ~
age dips (sags), brief i n ~ e ~ p ~ i voltage
o ~ s , increases (swells),
~ a n s i ~ nThese
~ s . are illus~atedin Figures 10.1 and 10.2.

Voltage d ~ s ~ r b a n ~ e s

.2 Voltage transients

supply ~ e ~ o rThe
k . main cau$e

xtinction of discharge 1
of control devices; speed variation or s ~ o p p i nof~motors; trippin
CQntactorS; c o ~ p u t e r
system crash; or c o ~ ~ u t a tfail~re
i o ~ in line commutated inve~ers.The effect of a v o ~ ~ g e

Power System Restructuring and ~ ~ r e ~ ~ a t i o n

dip on equipment depends on both its magnitude and its duration; in about 40% o f the
cases observed to date, they are severe enough to exceed the tolerance standard ado~tedby
er manufac~rers.Brief interruptions can be considered as voltage sags with 100%
de. The cause may be a blown h s e or breaker opening and the effect an expensive
s h u ~ d oFor
~ . a given system design and fault location, a certain number of c u s t o ~ ~wili
be ~ ~ e cand
t ethere
~ i s no way to prevent this process without major system s ~ c ~ r a
I-lowever, i n t e ~ p t ~ o due
n s to over~oadare somewhat more ~redictab~e.
These include
overload of the whole system (due to lack of generation) as well as ind~vidua~
lines and
cables, Voltage collapse can also be view as an overload situation, but in this case load
shedding can alleviate it. In the pre-dere~lationera, load shedding took place accord~ngto
utility ides. ~ e r e ~ ~ a t aIlows
i o n utilities to offer i n t e ~ u p t i ~ land
e non-inte~ptible
supply. During Limes of overload or overload risk, utilities may decide to increase the
inc~ntivefor customers to be i n ~ e ~ u p ~[8,9].
e d At present, this action only covers a very
s r n ~ fracti~n
of the ~ n t e ~ p t i o but
n s this will obviously change if the congestion in the
system increases,
Voltage swells are brief increases in r.m,s. voltage that sometimes a c ~ o m p voltage
sags. They appear on the unfaulted phases of a three-phase circuit that has developed a
single-p~aseshort circuit. They also occur following load rejection, Swells can upset
electric controls and electric motor drives, pa~cularlythe adjus~b~e-speed
drives, which
can trip because of their built-in protective circuitry. Swells may also stress delicate
computer components and shorten their life. Voltage disturbances
swells are classified as transients arid are caused by s u ~ d e nchanges


According to their duration, transient overvoltages can be di

into sw~tchingsurges
(du~ationin the range of ~ ~ ~ i i s e c o n dand
s ) , ~mpuIsespikes
ion in the range o f
sing from power s y s t e ~switchin
microseconds), Surges are high-energy pulses
ssociated with swit
d i s ~ r b ~ c eeither
s , directly or as a result o f resonating circ
capacitor s w ~ ~ h i n
devices. They also occur during step load changes. In parti
cause resonant oscillations leading to an o v e ~ o l some
~ ~ ethree to four times the n o ~ i n a l
,causing tripping or even damaging protective devices and equipment. ~ l e c ~ o n i c a l l y
based controls for ~ n d u s ~motors
a ~ are pa~icularly suscep~ibleto these ~ansients.
Impulses result from direct or indirect lightning strikes, arcing, insulation b r e ~ ~ detc.

10.I . 3


In Ehe present stage of deKegulation, no serious cons~derationis @ven to

~ a n s ~ i s s i oand
n distribution levels and, therefore, there i s little incenti
overall reduction in the f?equency of sags. Although there me indication
will increase in the hture, some customers are likely to d e ~ a~reduction
in their
One option is to introduce power quality guarnntees whereby the customer receives
~ o ~ p e n s a t i ofor
n each event exceeding a certain severity (in ~ a ~ i t u d duration
frequency). Such an additional service may be offered by the (monopo~ised)distri
c o m p ~ ~ yby, the supplier, or by any other pfayer in the market (e.g. an insurmce
c o ~ p ~ yA) ~, t e ~ a t ~ vae regulatory
body may decide to enforce a basic compensation

Power Quality

scheme for all customers as part of the connection fee [I 11. However, some customers may
not be satisfied with any compensation scheme, safety being their main consideration. The
option in this case is for the utility to offer high-quality power to a small
customers. These customers will experience less voltage sags than similar customers
elsewhere. This special service will require the installation of m ~ ~ g a t i oequipment,
may be offered by the dis~butioncompany, by the supplier, or by any other player in the
market. Additio~a~
regulations are needed to guarantee a minimum level of ~ o m p a t i b i l ~ ~
between equ~pmentand supply:
R e ~ u i r e m e n for
~ equipment immunity must be produced by standard-se~ng
organisations. The IEC is obviously the best platform for the development of such a
s~andard.In the USA, the IEEE may take the lead. Standards for equipment test~ng,like
IEC 6 1000-4-11 [ 121, are also needed to obtain and verify equipment immunity.
As a complement to equipment immunity requirements, voltage characteristics for the
supply must be made available to the customers. The E u r o p e ~s ~ d a r dEN 50160
should be extended with voltage characteristics for voltage sags and other events.
Equivalent documents should be written for other parts of the world as well as local
s t ~ d ~for
d sindivid~dlcountries [13].
latory bodies should pub~ishstatistics on the PQ performance of uti~~ties.
Such a
e is already in place in the UK for long i n ~ e ~ p t i o[14].
Voltage sag ch~acterisat~on
is an important basis for the above s ~ d ~ d
regulations. At the time of writing, standardisation on this issue is under develo
both in the IEC [4] and in the IEEE [lSJ. However, current activities concen
sags experienced by sin~le~phase
A technique has been proposed for the characterisation of voltage sags [16] e x ~ e ~ e n c be d
three-phase equipment. It enables the characterisation through one complex vol
wi~houtsign~ficantfoss of information. The method is based on the decomposition o
voltage phasors into symmetrical components. An additional characteristic is introduc
e n ~ b l the
e exact recons~ctionof the three complex voltages. The m a ~ e ~ a t ibehind
method and additional examples is described in references [2,17-20].
The ITIC (Information Technology Industry Council) curve [21] shown in Figure 10.3
can be used to evaluate the voltage quality of a power system with respect to voltage
i n t e ~ p t i o n ssags
or unde~oltagesand swells or overvoltage. This curve was ori
deline in the design of the power supply for computer and electronic
in the 60 Hz, 120 V distribution voltage system. By noting the changes
of power supply voltage on the curve, it is ossible to assess if the supply is reliable for
operating electronic equipment, which is generally the most susceptive equipment in the
power system.
The curve shows the m a g ~ i ~ and
d e duration of voltage var~ationson the power system.
The region between the WO sides of the curve is the tolerance envelope within which
electronic e ~ u i p m e nis~expected to operate reliably. Rather than noting a point on the plot
for every measured d i s ~ b ~ cthe
e ,plot can be divided into small regions with a certain
range of magnitude and duration. The number o f occurrences within each small region can
be record~dto provide a reasonable indication of the quality of the system.

Power System ~ e s t ~ c and

~ n g


Percentage of nominal voltage

(ms.of peak ~ q u i v ~ ~ e n t ~



Ims 3ms






ETIG curve

elet ~ a n s f (WT)
c u ~ ~ wav
f r ~ q u ~ re

ides a fast way of an

the ~~~~~r ~ r a ~ ~

arly in the ~ r e s e n cof~ a


Power Quality

A sample mother wavelet

he WT of a ~ o n t ~ u siQ ~ s

time e~~~~~of the w a v ~ ~ ~ t

are ~ i $ c r e t i ~but
~ dnot the i

Power System ~

~ and ~~ e ~ ~
c ~ l ~a t i o~ n

and the discrete wavelet coefficients are given by


Although the ~ a n s f o ~ a t i is
o nover continuous time, the wavelets represen~tionis discrete
and the discrete wavelet coefficients represent the c o ~ e l a ~ i obetween
the original signal
and wavelets for different combinations ofm and n.
The inverse DWT is given by:

= (A + B)/2, and A and B are the f i m e bounds (maximum values of a and b).


W a v Analysis
~ ~ ~ ~

lysis is normally implemented using ~ult~-resolut~on

h- and low-pass equivalent filters, h and g respectively,
wavelet. The digital signal to be analysed is then decomposed (filtered) into
smoothed and d e ~ i i e dversions at successive scales, as shown in ~ i g u r e10.5 where (24)
a down sampling by half,
Scale 1 in Figure 10.5 contains i n f o ~ a t ~ ofrom
n the Nyquis~~equeney(half the
ains i n f o ~ a t i o n
frequency) to o n e - ~ u ~ the
e r sampling frequency, scale
-quarter to one-eighth the sampliing frequency and so on.
at any scale, with the final smoothed
is is one of the sirab able
s, i.e. scales 8,16,32, if it is
. The choice of mother wavelet has a
nt effect on the results
obtained. The o ~ h o ~ o n aofl iwavelets
ensures that the signal can be recQns
its ~ ~ s coeffic~ents
f Q [23].
Wavelets with s y ~ m e filter
~ ~ c o e ~ c i e n ~genera^^
phase shift.
A large wav~letfamily derived by Daubechies [2 ] covers the field of o ~ h o n o ~ a l
wavelets. It includes embers ranging from highiy
Daub6 wavelets ape the best choice for short and fa
~ a ~ s id ei s~ ~t r b ~ cDaub8
e ~ , and Daub10 are the mo
of a mother wavelet without knowledge of the types
simpler solution is the use of one type of mother wavelet in the wh
and localisation for all types of d i s ~ ~ ~ c e s .

Power Quality


scale 2


. I .

M u I ~ i ~ ~ ~ s osignal
l u ~ odne ~ o m p o s i ~implementation
of wavelet analysis

In doing SO, higher scale signal decomposi~ionis needed. At the lowest scale the
mother wavelet is most localised in time and oscillates rapidly within a very short p e ~ o dof
time. As the wavele oes to ~ ~ g hscales,
e r the analysing wavelets becom~less loc~lisedin
owing to the dilation nature of the WT analysis. As a result of
time and oscillate 1
higher scale signal decomposition fast and short transient d i s ~ b a n c e sare de~ectedat
lower scales, whereas slow and long transient d i s ~ b a n c e swill be detec~e

F i g ~ r e10.6a shows a s ~ u e n c of
e voltage dis~rbances.To remove the noise prese~tin the
waveform, squared wavelet ~ a n s f coef~cients
(SWTCs) are used at scales rn = I 2 3
and 4, ~ ~ s p e c t ~ (v se ~h yo in
10,6b, c, d and e; these are analysed U
wavelet. Figure 10.6a contains
rapid oscillation disturbance (high fre
time 30 ms, and is ~ o ~ l o wby
e d a siow oscillation dis~rbance(low freque
ms. The SWTCs at scales I, 2 and 3 catch these rapid oscillations, while scale 4 cat
slow osci~latin~
d i s ~ r b a n which
c ~ ~ o c ~ u ~ after
e d time 30 ms. Note that the h i ~ h
persist at the same t e ~ p o r alocation
over scales 1 , 2 and 4.
It must be pointed out that the same technique can be used to det
waveform distortion (like no~chesand h a ~ o n ~ cand
s ) other
momen~aryinter~ptions,sags and surges. ~ o w e v e r rig

must be developed for each stutbance for the WT to be accepted as

au~omatic~ ~ a s s i ~ cof
a ~P o n

Power System ~ e s t ~ c t u ~and





















e Voltage disturbance signal (0 1996, iEEQ





The SWTCs at scale I (0 1996,Z







The S~~~~ at scale 2 (0 1 9 ~ 6IEEQ













Power System Restructuring and ~ e r e ~ ~ a t i o n




W a v e f o ~d ~ s t o ~ i oisn generally disc~ssedin terms of h ~ o n i c s which

are s
voltages or currents having frequencies that are w
frequency at which
the supply system is d e s i to~ operate
(e.g. 50
the ~euenciesof
these voltages and currents are not an integer of
they are termed
nic and interha~onic~ s t o ~ i ois ngenerally caused by ~ u i p m e with
non-linear voltage/c~ent characte~st~cs.In general, distorting equ
harmonic currents which in turn cause harmonic voltage drops across the impedances of
the network. Harmonic currents of the same frequency &om different sources add
vec~orially.It is believed that, in general, harmonic levels tend to be i n ~ ~ e n c prima~ly
by local and immediately adjacent conditions rather than wider zonal effects.
The main de~imenta~
effects of h a ~ o n i c are
s [30]:
maloperation of control devices, mains signalling systems and protective r ~ ~ a ~ s ,
losses in capacitors, ~ ~ s f o r m eand
r s rotating ~achines,
ional noise from motors and other apparatus,
telephone interference, and
e presence of power factor corr~ctionc a p a c i ~ oand
~ cable capac~tancewhich can
cause shunt and series resonances in the network roducing voltage ~ p ~ i ~ c aeven
oint from the distorting load.

As well as the above, i n t e r h a ~ o n ~ ccan

s perturb ripple eantml sign& and at s
h a ~ o levels
~ ~ ccan cause flicker. To keep the harmonic voltage content within the
recom~endedlevels, the main solutions in c u ~ ~use
n tare:

the use of high pulse recti~cation(e.g. smelters and R

passive filters, either tuned to i n d i v i d ~&euencies
active filters and conditioners.

I U,3. I

~ a ~ ~ o Sources

Lower order odd h ~ o n i c are

s the most proli~camong consumer e~ectronic$yste~s.
I~owever,the third harmonic (of zero sequence) is usually p r ~ v e ~ t efrom
d en~erin
high voltage system by the use of appropriate transformer connections. The fifth harmonic
(in the UK) has been identified as the harmonic order exhibit in^ the highest peak levels of
high v o ~ ~ systems,
with values between 2.5% and 3.0%at some locations. The fifth also
most ~ e ~ ~ e npresents
t l y the highest mean harmonic levels, a characteristic which has been
found to be consistent both g e o ~ p h i c a l l yand with time.

Power Quality





2 0.8






11 13

Frequency (x fundamental frequency)

igure 10.9 12-pulse converter current: (a) waveform, (b) harmonic spectrum

23 25

The t ~ d a cr o~ ~ ~ g u r a t for
i o ~i ~ ~ u s a~ i a ~
ations is the ~ 2 ~ ~ u l s e
cQnve~er,shown in igure 10.8. The c~aracteristic
ation are o~orders12k-t-1 (of positive s e q ~ e n cand
~ ) 1%a ~ ~ l i ~ are
d ei ns v ~ r ~ pl yr o ~ o ~ to
~ othe~ ~a ~a ~ o ~ i c
s ~ e c of
~ ~Figure
m 10.9b which c o ~ e s p o n dto~the time wavvefo
of course, ~ a ~ i 1 r 1s
n for
~ ideal system conditions,
e d ~ c eAC
~ s y s ~ e ~ a per~ectly flat direct c u ~ ~ (i.e.
n t i ~ ~ n si~ to o~t h i n g
en the AC system is weak and the o
erfectly s y m m e ~ ~ a l
~ a r ~ o nappear.
ile t~~ c~aracteristich ~ o n i c s
it is not e~onornica~
to reduce in that way the un

devic~sand are, there

~ o ~ common
h e ~ ex amp^^ of u n c ~ a r a c ~

els with v ~ ~ o levels

u s of c o ~ p l e x are
i ~ app~aring
1 n o ~ - l i ~ e cQ~ponents,
such as AC/DC converte
harmonic Norton equivalents. They involve iterative harmonic analy
b e ~ thee conve~er
and the linear system. Further work is
1 ~ ~ e Q u sthe
l y effect of multiple ~tercQnnectednon-li
The system s ~ a state
~ y is $ub~ta~tially,
but not completely, desmib
ark. In many eases, it is a s s ~ e dthat there
the ~ n d a ~ ~ e nfrequenc~
and its ~armQnic$.

cedwe used to solve the non-li~earequation set.
a set o f accurate non-linear e

Power System ~


~ andc Dere
~ ~

~ ~ r ~ o Flows
n i c (301

In its simples~form the frequency domain provides a direct solution of the effect of
d in~ividua~
h a ~ o ~ or
i c~ o n ~ h a ~ o~equency
t~oughouta linear
system, without explicit consideration of the harmonic interaction between the network and
the n o n ~ l i c~oem~p ~ ~ e n ~ ( s ) .
The sources of h ~ ~ o ninjection,
depending on the available info
linear c ~ ~ p o n e n tcan
s , be current sources or Norton or Thevenin harmonic ~ ~ u ~ v a l eAn t ~ ,
c o ~ r n ~experience
derived from harmonic field tests i s the asyrnme~ica1n a ~ r eof the
justifies the need for three
,being the mle rather than tbe exc
s. The basic compon~n~
of a t h e
~ ~ s m i s s line,
~ o nwhich can be accurate~yrepresented
as earth return, skin
model, including mutual effects a
other n e ~ opassive
r ~
n line m o d ~ are
~ s then combi~edw
c o ~ p o n ~ ntot sobtain t~ee-phaseequivalent h a ~ o n i ic
The system harmonic voltages are calculated by direct solution oflhe linear equation

is a reduced system a d ~ ~ ~ a rn
n c ex of order equal to (
n u ~ b of

current waveforms often have an ape~iodiccoinponent. The most c o ~ m o n

iodicity in the ~ a v ~ isf o ~
and i n t e r ~ ~ o con~ent~

also pro~ucesvoltage ~ ~ c ~ a t and

i o lni ~~h t~ ~ c ~~ eor ~. e c t toi othe~
voltage level and the
of series reactances
.The conve~tiona~
account the ~ p e r i o ~co~ponents.
For example, the total h a ~ o n i cdistortion ( D) is basically a ratio of the en~rgy
t ~is possible to d e ~ n ea
onics to that in the ~ n d a ~ ec o ~ p o n e n It
r the aperiodic case by defining the power f r e q u ~ ~ c(and
y there
I, component), and then using the ~ e m a i n i nportion
of the s
nu~eratorof a ~ ~ - 1 i index
k e [39]:

Power Quality

where the power ~equencyis denoted as cooand E[.]denotes the calculation of the ener
of a time signal. The prime on th
D indicates that this is not quite
con~entionalTHD ca~cu~atiQn.
e, TMD degenerates to TIID for the p e ~ o d i ccase.
With re~erenceto the flicker disturbance, the measurement and frequency windows in
which flicker exists is d e ~ n e d inte~ationalstandards, mainly thro
C). Generally, flicker i s limited to
~ l e c ~ r o ~ e cCommission
fluctuations in the supply voltage.
A proble~aticf ~ ~of ~thisr index
e is how the flicker is to be m sured. As an examp~e,
power frequency) be
should the flicker energy (i.e. sideband energy in the vicinity of
measured in root mean square a m p ~ i ~ dore ,zero to peak?
m e a n i n ~ to
~ lintegra~ethe sideband energy over a
latter appears to have less phys~ological implic
mathemat~cal properties. Also, the integration of energy
factor as specified by the IEC stand
tranform, short-time Fourier transform, and Fourier linear combiner have been sugges~ed
as possible solutions to the problem.

with the intent of s u m m a ~ s ~

rms of the active power loss
distortion, and the ~n~er~erence
on telephone and data communication ei
these indices have evolved from expe~encewith power systems, m i n ~ i t i v er ~ a s o n i n ~
and from heuristics. However, with the advent of power electronics and 0th
tronic devices, there are prob~ema~jc
cases in the general app~icationof
For examp~e~
e use of the power factor index to minimi
sys~emlosses, with a ti
load, such as a pulsating load on the s
phase induction motor,
become a source over part of the cyc
stroke occurs fo~lowedby a re~e~erative
period). Thus, the power
~ n d ~ c t i omn a c ~ n eload may go ~ e a ~ and
n g lagging. In this case, th
correct the power factor to minimise loss in the distribution supply
intuitive result. The power factor index should be applied with caution in cases o f time
v ~ a t ~ ounbalance
and presence of on-powe~ frequency signals,
The main ~ o t i v a ~ i ofor
n using indices is the ease in calculation, th
tion of
of the
definition, the simple a p p ~ ~ c a t oi of ~the indices (and the simplified
in some cases, indices should not be used at all. Instead, it ~ ~ gbeh t
~ ~ c e sHowever,
the time waveshape of voltages and currents directly. ~ o m e
definitions include sojourn time, wavelet spectrum, Liapunov
The in dust^ needs to est~blish~ ~ i andf complete
o ~ P
that d~~ can be compared (over location, over time, etc.) and
such as IEC 61000-~-7,which cov
77A Work~ng~ r o 09
u has
~ made en
U ~ ~ l ~ ~ - o PQ
~ esn~ ~~ ed da r are
of s ~ n d a r d scan be used to set a CO

and they should create a ~ i ~ a mc c ue p~level

~ ~ of
~ PQ.
~ The
ean s ~ a ~ ~d ~~e da d y
contains some we11"~e~ned
margins for harmonic disto~ionancl other variation^
le levels for events li
WO&,~ ~ w e ~still
e rneeds
to be done to set acc
and ~ ~ ~ ~ ~ pThe
t i voltage
o n ~ characteristic
themselves are not
e q ~ ~ p ~i e n t ~re ~ r ~ ~ eand
m i~s s i b ~umber
n ta~smaxi i
of quip
needs to be decided on.
More work i s needed on PQ standards that can be used by equip~entm a n ~ ~ a c ~ r eItr s .
is far less expensive to inform m ~ u f a c ~ r e~r s ~ theoreal~levelt of
t to improve the level of power quality. Some in
sky, have already developed their own s
ility s t ~ will
d u~ ~ ~~ i ~ t ~e li yn i ~alli $P ~ issues, i n c l u d ~t ~~o s e

us effort is needed from $ ~ ~ a r d " e ~ i ~

lish require~entsfor equ

Power System R e s ~ c ~ r i and

n g Dere~lation


[ 121 Voltage dips, short intemptions and voltage variations immunity tests, IEC Standard
~ocument61000-4- 11.
[ 131 Basnivo fdr elkvalitet, (Basic level for power quality, in Swedish), Gdtborg Energi Ndt AB,

[ 151





~ o t ~ e n b u rSweden,
port on distribution and transmission system perfo~ance,pub~ishedannually by Office of
Electricity Regulation, Birmingham, UK.
IEEE Project Group 1159.2: Power quality event characterization.
llen, J. Svensson and L.D. Zhang, Testing of ~d-connectedpowere~ec~onics
European Power Electronics
for the effects of short circuits in the
Lausatme, Switzerland, 1999.
. Bollen, A method for characterizing unbalanced voltage dips (sags)
onents, IEEE Power Engineering Letters, July 1998.
L.D. Zhang and M.H.J. Bollen, Characteristics of voltage dips (sags) in power systems,
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on Harmonics and Quality of Power, Athens, Greece, October 1998.
M.H.J. Bollen, Characterization of voltage sags experienced by three-phase adjustable-speed
drives, IEEE Transactions on Power Delivery, V01.12, No.4, 1997, pp.1666-1671.
L.D. Zhang and M.H.J. Bollen, A method for characterisation of three-phase unbalanced dips
(sags) from recorded voltage waveshapes, International Telecon~municu~ions
Conference ~ ~ T E ~ ECopenhagen,
Denmark, June 1999.
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m a ~ o ~ Industry Council, formerly known as the Co~puter& siness ss
Equipment. Manufacturers Association), ITIC Curve Application Note, available at

acharjee, Applicat~onof wavelets to d e ~ e ~ i n e

motor drive performance during power system switching transients, Power ~ ~ a l i t y
1, A ~ ~ e r1994.
d ~ ,
to Wavelets,Academic Press, 1992,6-18.
[24] 1. Baubechics, Orthonormal bases of compactly supported wavelets, ~ ~ m r n u n ~ c a ~ini oPure
and A ~ ~ ~ ~ e d ~ u ~ h @
m a t i1988,
c s , pp.909-996.
[as] S . Santoso, E.J. Bowers, W.M. Grady and P. H o f ~ Power
~ , quality assessment via wavelet
t ~ a ~mlysis
~ f o IEEE
~ Transactionson Power elivery, Vol.11, No.2, 1996, ~ p . 9 2 4 - ~ ~ 0 .
egnevi~sky,Automated disturbance recognition in power systems,
Power ~ n g ~ ~ e e Conference
(AUPEC 98), Hobart, 1998, pp.593-



1271 P.F. Ribeiro and P. Ceiio, Advanced techniques for voltage quality analysis; ~ ~ ~ ~ e s
sophistication or indispensable tools, Paper A-206, Power Quality assess men^, ~ ~ t e r d a i n ,
[28] L. Zadeh, Fuzzy sets, Info~at~on
and Control,Vol.8, No.3, 1965, pp.338-354.
Introduction to Fuzzy Logicfor ~ r a c t i c App~icati~ns,
a, D. Bradky and P.S. Bodger, Power System ~ u r m o ~ ~ iJohn
c s , Wiley & Sons,

ads and J. Arrillaga, HVDC converter ~ a n s f o ~core

e r saturation instability:
A frequency domain analysis, IEE Proceedings - Generation, T r a n s ~ i s s ~Distribution,
V01.143, Ea0.1, 1996, pp.75-81.
. Ainsworth, The p~ase-~ockedoscillator. A new control system for controlled static
converters, IEEE Transactions on Power Apparatus and Systerrts, Vol.PAS-87, 1968, pp.859865.

Power Quality

liaga, N.R. Watson, J.F. Eggleston and C.D. Callaghan, Comparison of steady state and
dynamic models for the calculation of a.c./d.c. system harmonics, IEE Proceed~ngs,Vol. I 34C,
No.1, 1987, pp.31-37.
R. ~ a c a m i n iand J.C. Oliveira, ~armonicsin multiple converter systems: a genera~~sed
approach, IEE Proceedings, V01.127, 1980, pp.96-106.
6. Carpinelli, et al., Gener sed converter models for iterative harmonic analysis in power
systems, IEE Proceedings Generation, Transmission and Dis~ributi~n,
Vol. 14 1, No.5, 1994,
pp.445-45 1.
C.D. Callaghan and J. Arrilla~a,A double iterative algorithm for the analysis of power and
~ a ~ flows
o at
~ ac-dc
c converter terminals, 115%:Proceedings, Vol.136, No.6, 1989,

. Smith et al., A Newton solution for the harmonic phasor analysis of ac-dc c o n ~ e ~ e r s ,
IEEE PES S ~ m ~Meeting
95, SM 379-8.
C.D. Callaghan and J. Arrillaga, Convergence criteria for iterative harmonic analysis and its
application to static converters, ICHPS IV, Budapest, 1990, pp.38-43.
G.T. Heydt, Problematic power quality indices, Panel Session on ~
~ ~ t a n d a~~ dIEEE
s, ~
Winter Power Meeting, Singapore, 2000.
R. Ott (Chairman), IEC 77A Low Frequency Phenomena, Working Group 9, Power qua~ity
measuremen~s,Draft in progress,
ctric Power Distribution for Industrial Plants.
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IEEE 1159: 1995, lEEE R e c o ~ e n d e dPractice on Monitoring Electric Power
IEC 61000-2-5: 1995, E l e c ~ o m a ~ eCompatibility
Part 2: E n v ~ o ~ e n$ection
Classifications o f ElectromagneticEnvironments.
IEC 61000-2-1: 1990, Electroma~eticCompatibili~(EMC), Part 2: E n v i r o ~ e n t Section
D e s c ~ p ~ i oofnthe E n v ~ o ~ e-nElectroma~etic
Environment for Low-~requen~y
Disturbances and Signalling in Public Power Supply Systems.
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(EMC), Part 2: E n v i r o ~ e n t Sect~on
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Conducted Disturbances md S i ~ a l I i n gin Public
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Occurring in Industrial Installations.
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~ ~ o n Standards Publication 94: Guideiin~on E ~ e c ~ cPower
ADP ~n~tallation~,
National Technical Information Service, 1983.
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system R.M.S. varialion ~ e r f o ~ a n cIEEE
~ , T r a n s a c ~ j oPower
Delivery, PE-

IEEE 519: 1992, IEEE Recommended Practices and Requirements for Harmonic Control in
Electric Power Systems (ANSI).
IEC 61000-4-7, 1991, E ~ e c t r o m a ~ e ~
(EMC), Part 4: Limits, Section 7:
General pi& on harmonics and inter-harmonics measurements and ~ ~ ~ ~ ~ u m efor
n power
supply systems and equipment c o ~ e ~ t thereto.

estructtaring and ~ e r e ~ l a ~ ~ Q n
irectives conce~ingthe Protection of T ~ l e c o ~ m ~ i c aLines
t i o ~against

Group, ~ n t e r - h a ~ Q n in
i c Power
Systems, January 1997.
[571 Ec 868: 1986,F ~ ~ ~ k e-Functional
~ e t ~ T and design spe~i~cations.
[58] IEC 868-0: 1992, Flickermeter - Evaluation of flicker severity,
4: Limits, Section 15:

ems and Equip~ent-

Relevant Standards.
E631 lEEE 100:1992, IEEE Standard Dictionary ofEIecCrica1 and Electronics Te
1641 ET4 50160 1994, Voltage ~ h ~ a c t e ~ s tofi cEs l e c ~ i csupplied
by Public

1651 IBC 61000-3-2: 1994, E

for ~ ~ o ncurrent
i c em
[66] IEC ~ 1 0 0 0 - 3 1994,
~: E
armonic current emission
1994, Elect
~ ~ i ~ tofi Voltage
o n ~ l u c ~ t i oand
n s Flicker in LQw-volta~e~~~~1~ ~ y $ t for
e ~~ ~ u i ~ ~
Rated Current 1 16 A.
C), Part 3: Limits, SectiQn 5:
~ ~ ~ iof ~Voltage
a ~ Fluc~a~ions
i o ~ and Flicker in ~Qw~VoltagG
$upp~y ystem for ~ q u i p m e ~ i ~
d Current gncata than 16

analysis in real-time,

Iowa State Univer~ty


University of'~ e t Australia

e ~

r Loi Lei Lai

City ~ n ~ v e ~ ~i t oy .n d ~ n


Power System ~

~ and D~ ~ r ~c~ l a t~i o n ~

S o ~ a r agents
have evolved from multi-agent ~ y s t e ~ s
three broad areas which fall under distributed artificial
being dis~ibutedproblem solving (DPS) and parallel arti
~ e ~ascwith
~ ~ulti-agent
systems, they i ~ e r i many
potential benefits. For example, s o h a r e agents inherit
m o d u ~ a r i speed
~ , (due to parallelism) and reliability (due to redundancy). It also i ~ ~ r i t s
those due to AI such as operation at the ~ o w ~ e d level,
g e easier mainte~ance,r e u s a b i ~ i ~
and p l a ~ f independence.
The concept of an agent can be traced back to the early days of
research into DAI in the 1970s.
tudy of mu~t~ple
agents includes
intera~tionand c o ~ ~ n i c a t i o n
agents9 d~compositionand dis~butionof ta
coordina~ionand cooperation,
conflict resolution via negotiation. These resulted in work such as
I planning and game
s m a ~ e s s derives from the fact that the value gained from
agents c o o r ~ ~ n a ~their
~ n gactions by working in coo~erutionis
greater than that gained from any individual agent. A p p ~ i ~ a ~ domains
[ 1x1 in which
agent solutions are being applied to or investigated include work~owmanagement,
network management, a i r - ~ a f ~control,
business process r e - e n g i n e e ~ ~
i n f o ~ a t i o n re~eval/management, electronic commerce, educat~on, perso
~ s i s t ~ n t sas), e-mail, digital l ~ b r ~ i e sc ,o r n r n ~and
~ ~ontrol, ~ m a ~
m a n a ~ e ~ e netc.
s are still ~ ~ m o n s ~ ronly:
It is important to note that most agent-based
e even greater cliallenges, some
c Q n ~ e ~ ithem
n g into real usable appiications would
reseen. The essential ~ e s s ~ g e
of wh~chhave been ant~cipatedbut, currently, many
ity9their wide
of this section is that agents are here to stay, not least because of thei
r a n ~ eof a ~ ~ ~ i c a and
b i lthe
i ~broad spectrum of companies investing

a component of software andfor hardware which i s capable of

accomplish tasks on behalf of its user. here art: several

first^^, agents may be classified by their mobility, i.e. by their ability to move a ~ ~ ~ n
some n e ~ o r kThis
. yields the classes of static or bile a~ents.
~ e c o n ~they
~ y , may be classed m either ~ e ~ i b e r a or
~ ~reactive.
derive from the deliberative thinking p~adigm:that is, the agents
symbolic, reasoning model and they engage in p l a ~ i n gand neg~tiationin order to achie~e
with other agents. Work on reactive agents o r i ~ i n ~ t from
e s research carrie
oks [19]. These agents on the contrary do not
odds of their environment, and they act using a stimulus
state of the env~onmentin whi
that intelligent behaviour can
olic re~resenta~~ons
of traditional AI [21].

Information Technolonv A ~ ~ ~ i c a ~ i o n


Thirdly, agents may be classified along several ideals and pfimary attributes that agents
should exhibit. At T Labs, three main attributes, namely autonomy, le
have been ~ d e n t i ~ e~d . ~ ~ refers
o to~the oprincip~e
~ ythat agents can operate
on their own without the need for human guidance, even though this would sQmetimebe
invaluable. Hence agents have individual internal states and goals, and they act in such a
manner as to meet their goals on behalf of their user. A key element of their autonomy is
activeness, i.e. their ability to take the initiative rather than acting s
to their environme~~
[22], Cooperation with other agents is paramoun~.
to cooperate, agents need to possess a social ability, i.e. the ability to interact
agents and possibly humans via some communication language [22]. Having said this it is
possible for agents to coordinate their actions without cooperation [23]. Lastly, fo
systems to be truly smart, they would have to learn as they react and/or interact w
external environment. Agents are (or should be) disembodied bits of intelligenc
these three minimal
es, Figure I 1.1 was used to derive four types o f agents, namely
c~llaborativeagents, collabo~ativeleaming agents, interface agents and smart ~ ~ e ~ t ~




1.1 A part view of an agent typology

It must be emphasised that these distinctions are not definitive. For ~ x ~ p l with
ative agents, there is more emphasis on cooperation and au~onomy
; hence, it is not i ~ p ~ i ethat
d collaborative agents never learn. Like
ere is more emphasis on autonomy and learning than o
Ise which lies Q u ~ s ~the
d e ~ntersecti~g
areas is not con
most expert syste~nsare largely autonomous but,

may s ~ ~ e t i mbe
e sc l ~ s i ~ by
e dtheir roles ~ r e f e r a b ~ y ,
odd Wide Web (
~i n ~ Q
) ~ a t i agents.
Again, info

~ i ~ h ltwo
y , or more age^^ ~hiloso~hies
are combined in a
~ y ~agent.
r i ~There are Qther a ~ b u of~ agents,
~ s which we
already m e n t i ~ For
~ ~example,
is an agen~versatile (i.e. does it h
in a variety of tas
Is an agent benevolent or non-help
Does an agent lie
wingly or is it always ~ u t h f u(&is
Can you trust the agent enough to (risk) delegate task
in contrast to failing ast tic ally at the b o ~ ~ ~Pee s ?

Power System ~ e s ~ c t u and

~ n Dere

are also a ~ b u t ~ en~go ~ i o nattitudes
to agents - do ~~~yget fed up
to do the same thing time and time again?
role does e ~ o t i o nhave in
c o n s ~ ~ c t believab~e
agents [NI? In essence, agen
in a truly ~ u l t i - d i ~ e ~ ~ i ~ n a
space. It is quite possible that agents may be in c o ~ p ~ t i t i owith
n one another, or per
stic towards each other. In agen~-ba
involves high-level messages. The use of
lower ~ ~ r n ~ ~ costs,
c a easy
~ ~reimplementabi
o n
d ~ o n c u ~ e nLastly,
c ~ . and p
most i ~ p o ~ tagent-based
~ y ,
ally at the ~ o w l e ~ level
ge [

.l, collabo~tiveagents emphasis^ a u t o n o ~ yand

s) in order to p e r f o tasks
for their o ~ eThey
~ may
rnphasis of their operation. In order to have a CO
ey may have to ne~otiatein order to reach
a ~ e e ~ e i ion
t ssome matters
The ~ o t i v a for
~ ~ having
~ n c o ~ ~ a b o r a ~agent
~ v e systems may include one or several of
the ~ o l l o w i n ~ ~
to solve probI~msthat are too large for a cen~al~sed
single agent to do owin
resource li~i~ations;
to allow for the ~nterconnectingand interoperation of
so~utionsto i~herent~y
e solu~onswhich draw from

speed (due to p ~ a ~ ~ e ~ ~ s r n
~ h a r e a bof
i ~resources);
to re~earchinto other issues, e.g. understanding ~nteractions
asise autonomy and l e a r n ~ ~ing order to p e ~ o
subtle emphasis and distinction between c o ~ ~ a b o r a ~ i ~
a t ~ v ~~ o ~ ~ a b o r awith
c o ~ ~ a b o r awith
t ~ n ~other agents, as is the case with c o ~ ~ a ~ o r~gents.
ay not requir~an explicit agent c o ~ m ~ i c a t i ol an n ~ a g eas one re~uiredwhen
ith other agents. Essentially, interface agents support and provide assis~nce
system. The users agent
lar app~icationsuch as 1
erface, learns new shortitors the actions taken
acts as an assistant,
better ways of doing the task. Thus, the users
the task. As for
erates with the user in ac~o~plishing
Ily to assist their user better in the ~ ~ l ~ o wfour
i n gways [26]:

o b s e ~ ~ and
n g imitating the user (i.e. l e ~ n i n g
h r e c e i v ~ nposit~ve
and ~egativefeedb
ctions from the ~ s e r

Information Technology A~~lication

other agents for advice (i.e. learni~gfrom peers).

Their c o o ~ e r ~ t i owith
n other agents, if any, is limited ically to asking for a d ~ ~ can
ion deals with em, as is the case with c o ~ ~ a b o r a agen~s.
~ v e The
ically by m e m o ~ - b a s elearning
or other t e c ~ i ~ u esuch
s as
h are being in~oduced.
An interface age^^ is a ~ u a s i - s m ~
where boring and laborious tasks could
ith one or or^ computer appbica
e tedium of ~ u m a n ps e r f o operatio~s.
~ ~ ~ ~

from a flight reservation to ~

aa t e~l e ~io ~ m
n u n~ c a t ~ o n s

s neither a necessary nor , ~ u ~ cc ia ~

e d~~ ~t ifor
on a ~ ~ ~ t ~ a

wn to other agents.

~ a ~[28]e lists
r the ~ a j co~ a~l l e ~ g eThey
s . ~ ~ c l u at
d eleast the ~ o l ~ o w i ~ ~ :


~ does
~ an
~ ~ : ~move
e .From
~ place
to place? How does it

Power System Restructuring and ~ e ~ e ~ I a t i o n

Au~hentication:how does the user ensure the agent is who it says it is, and that it is
represent~ngwho it claims to be represent in^?
does the user know it has navi
various networks without being infected by a v
Secrecy: how does the user ensure that the agents maintain privacy? How does the user
ensure someone else has not read the personal agent and executed it for their own gains?
How does the user ensure that the agent is not killed?
Security: how does the user protect against viruses? How does the user prevent an
i~comingagent from entering an endless loop and c o n s ~ n all
g the CPU cycles?
Cash: how will the agent pay for services? How does the user ensure that it does not run
up an outrageous bill on the users behalf?
rmance issues: what would be the effect of having hundreds, thou$ands or millions
f such agents on a WAN?
services: how does the user provide
e ~ n g / d i r e c t o r y ~services
for locating engines andor s p e c i ~services?
the user publish QT subscribe to services, or support broadcasti~gnecessary for
some other coordina~~on
The ~
~ for developing
iin f o ~ a t ivo ~ i n t e r~nagents
~ simply ~a n e e ~~ d e for
~~ ~ d
tools to manage such information explosion. Everyone on the WWW would benefit from
~~e~ agents are going to search the Intern~t,becaus
matter how ~ u c h
ernet may be organised, it cannot keep pace with the
has (or prom~ses)its own stre~gthsand de~cienc~es,
e strengths and minimise the de~cienciesof the most rele
rpose. Frequently, one way of doing this is to ad
together some of the s~engthsof both the de
hybrid agents refer to those whose cons~~tut~on
or more agent p ~ i Z o s o within
~ ~ ~ ~a ssingular agent. These philoso
p h ~ ~ o s o ~an
h y~,t e r f a c eagent philosophy~collaborative agent
s i s h y b agents
~ ~ or ~ c ~ ~ t e c ~
The key ~ y p ~ ~ ~fore having
the benefits accrued from having the combination of ~ h ~ l o s o within
~ ~ ~ ae s
roved right; the ideal benefits
hies, In such a case the reactive component, which
would take precede~ceover the del~bera~ive
one, brings about the following ~ e n e ~ t s ~
robustness, faster response times and adaptabil~ty,The deliberative part of the agent would
term goa~-orientedissues. For ~ x ~ p lthere
e , is
agent by comb in in^ the interface agent and MO
mobi~eagents to harness fea
other co~b~nations.
fer to an ~ n ~ e g setup
r a ~of~ at~ least two or more
agent sy
which belong to two or more different agent classes.

I n ~ o ~ a ~Technology


also contain one or more hybrid agents. ~eneserethand Ketchpel 1291 a~iculatec ~ e the
~ ~ y
for heterogeneous agent systems. The essential argument is that the wosl
abounds with a rich divessity of s o ~ ~ a~rreo ~ u cproviding
a wide range of services for a
s i ~ ~ l a wide
r ~ y range of d o ~ a i n s .hough these psograms work in ~sola~ion,
there i s an
in such a manner that they
increasing demand to have them i n t e ~ o p e ~ ~ hopefully,
provide added value as an ensemble than they do individually. A new domain called
a ~ ~ ~ t -software
b a ~ ee ~
n g i n e ~ ~has
i ~ gbeen invented in order to facilitate t%ieinteroperation
of misce~~aneoussoftware agents. A key r e ~ u ~ e m e nfor
t interope~ation
nts is having an agent ~ o ~ m ~ i c a t language
(ACL) via which the
agents can comm~icatewith each other. The potential ~
e for ~
having heterogeneous agent technology are several:

S~andaloneapplications can be made to provide value added services by enhancin~

in cooperative hetesogeneo~ss
them in order to pa~icipateand intero
orated because it could obv
The legacy software problem may b
new leases of life by
costly s o ~ a r rewrites
as agents
~ntesopesatewith other systems. At the very least, heterogeneous agent t e c ~ o l o g ymay
lessen the effect of routine s o h a r e maintenance, upgrade OS rewrites.
Agent-based software engine~singprovides a radical new approach to so
i~plementationand mainte~ancein gener~l,and software i ~ ~ s o ~in ep a~~ cb~ li a ~
s. ~ ~
~ e n e s e r ~ tand
h Ketchpei [29]
e that agent-based sofeware engi
~ o ~ p a r etod object-oriented pro
ing in that an agent, like an Q
~esage-baedinterface to its int
a structures and algorithms. H
ey distinction: in object-oriented p r ~ g r a ~ i
may differ from object to object (this is the ~rincipleof po
s o ~ a r enginee~ng,
agents use a common language with
They h~ghligh~
three ~ m p o ~ questions
raised by the new agen~-osi~nted
e n ~ ~ n e e n n~ ga r a d i gThey
~ . inciude:
priate agent co~mun~cation
apable of c o ~ u n i c a t ~ in
n gthis c o n ~ ~ c t 1e d
at commun~cationa s c h ~ t e ~ ~are
r econducive
to cooperation.

are availabl~,there a e two ssible ~ c ~ ~ e cto~choose

r e s
ents handle their own coord ation or another in which g
can rely on special s y s ~ programs
to achieve coordina~on.The d i s a ~ v ~ ~ of
a gthe
former is that the c~mmun~cation
overhead does not
n e c e s s a ~requireme~tfor the re of a g ~ n ~As
s . a consequence, the

various services. They also establish the connect~onacross the e ~ v ~ ~ oand

~ ensure
e ~ t s
c ~ ~ eco~versatio~
amongst agents~

Power System R e s ~ c ~ rand




1-2 A federated system (adapted from 1293)

General Issues and the Future of Agerzts

from t e c ~ i c issues,
as mentioned earlier, there is also a
s ~ are looming. They include the following:
rivacy: how does the user ensure that a g ~ n ~ sa ~ n much
~ i nn e e ~ e ~
acting on the users behalt?
Legal issues: ~maginean agent offers some bad advice to other peer a ~ e n t rs e s ~ ~ in
~ ~ a ~ i l i to
t i eother
s people; who is r~sponsible?
Ethical issues: agents must limit their searches to appropriate servers, share info
with o ~ e r and
s respect the authority placed on them by server o~erators.

suppliers, electric generators and distributors will have to

adds to our experien~eand helps us make the next market imp~ementat~on

work a little
better and more competit~vely.It is believed that to some degree,
~ ~ g i o commodity
exchanges will play a key r
This section assumes a ~ ~ e w o which
r k has been described in
13 1,321. ~ o m p ~ ipresently
having both generat~onand d ~ s ~ i b u t ~facilities
would be
d i v ~ ~ einto
d separa~eprofit and loss c ~ ~ ~Power
e s .is generated by generation co~panies
ia tra~smission companies
i s sold to energy service com
city ~ e l i a b ~Council
antile associations ( E M S ) will e m e r ~ ein
r e l i a ~ i l and
i~ s e c u ~ ~
ill promote liquidity and as an i n t e ~ e ~ i a t e
this co~petitiveelectri
er to all mul~ilatera~
trades, they will provide assurance to traders, that they nee
onry about trading because a defaulting contract partner.
This framework allows for cash (consists of spot and forward markets), fbtures and
p l a m~rkets.
~ ~ See
~ ~~i g u r e11.3, The spot market allows for trading power e
other d ~ ~ a t i o e.g.
n , 30 minutes) in the next 30 days. Forward contracts
c i ~ as specified in the contract from 1 to 18
traders to buy or sell firm e l e ~ ~contracts
months. The fittures ~ a r k allows
e ~ trade^ to purchase a non-^^ electric^
given ~ o n t hin the future (e.g. 1 to 18 months). Futures contracts pro
electricity traders to manage their risk. The planning market is a 10
develop capi~alfor building large items like new plants and trans
time horizon (in months)

1.3 Interconnection between the markets

s (for both ~ t u r e and

s physicals) for electric energy are ex
comm~nand will be an ~ m p omeans
~ ~ tof mitigating risk, An
ho~derthe r i ~ h to
t buy or sell w i ~ h o the
~ t o~ligationto buy or sell.
holder must pay an u ~ - ~ o nremium.
The a ~ o u not f the premium shou
potential holders. The worth of an option may vary
references, makeup f p o ~ o l i o s(collection of assets
is, how does one etemine the value of
d in many markets to value options. Its usage assumes many
a1 commodity that may not be true about electricity.


Power System Restructuring and ~ ~ r e ~ ~ a

The approach taken in this research is to allow CO

sed agents to d~veloptheir
own valuation f o ~ u ~ as
a they
e p ~ i c i p a ~inea s i ~ u l a option
~ e ~ markets.
er options valuation should achieve higher profit than do
s. The computerised agents evolve in a genetic algo
valuations are replaced with new agents that are based 011 the succes~lideas of the better

As mentioned previously, it is quite likely that regional c o ~ m o d exchanges

in which
buyers and sellers pa~icipatein a double auction will soon exist. Such e x c h ~ g e sare
utilised in other markets and are essentially an extension of the electricity market operating
in California, A centralised exchange allows many and varied traders easily to trade a
c o ~ o cn o ~ m and
o derivatives
~ ~
based on that CO
In the cash (spot and forward) market,
indepen~entcontract a ~ i n i s ~ a t(TCA),
. CENCOs and ESCOs cooperate with the IC
that the energy transactions resulting from the matched bids do not overload or ren
e l ~ ~ ~transmission
system insecure. The ICA monitors and res~ondsto the
s y ~ limits
~ e and
~ transmission capacities.
The spot market is what we are most familiar with in the electrical
and a buyer agree (either bilaterally or through an exchange) upon a
~ u ~ bofe ~r e g a w a t to
~ sbe delivered sometime in the near ture (e.g. 10 MW from 1.00
p.m. to 4.00 p.m. tomorrow).
An aptions contract is a form of ins~rancethat gives the option
not the obliga~ion,to
(sell) a contract at a given price. For e
is someone writing the contract who, in return for a premium, is
ce. See Figure 11.4. Both the options and the
d e s i ~ e to
d minimise risk. A ~ t h o ~ provisions
for ~ e ~ i exist,
v e they
~ are not
(e.g. the delivery point is not located where you want it to be located). The
trader ~lt~mately
cancels hisher position in the futures market with either a
sicals are then p ~ c h a s e don the spot market to meet d e ~ ~ wi
een locked-in via the hhlres contract.
Long ~enotesownersh~~;
to go long
figure, long indicates that the trader has pu
(call) or the right to sell but) the hture. A trader who write

Information Technology Ap~~cation

figure shows how the put works. The long trader pays a premium to lock-in a maxi^^^
. The short trader
price (exercise price) that he/he will have
in return for promising to sell the



Using put and call options

value of the option has been the subject of some a e ~ a tA

~ .c
and SchQieput together their formula which has been
other commodity markets. Marshal1 [33] states tha
r e ~ ~ ithat:
~ - t rate
e is
The ~ ~ Q interest
and constant.
The una~rlyingasset pays no
The u n d ~ ~ ~ yasset
i n g is e ~ ~ c i ~priced.
The option is of the European type.
~ ~ c ~costs
i Q (for
n bwying and selling).
of u ~ d e r l y asset
~ g value can be borrowed.
restrictions on, or penalties for short selling.
holes e ~ u a t ~ for
o n valuin
ut option is as follows [34]:
p = [x.ePip(-r. (T-PI). N(- d2)- s * N(- d l )

2 = strike price

r = risk free rate

(= cumula~ive
~ normal
T = ~ x p i r a ~ date
t = c u ~ e ntime

Power System Restructuring and



A g e n ~ - ~ a ~s e ~~ r n p ~ ~ ~ ~ ~ ~ n a l

arket p a ~ i c i ~( ~s u
t s~ ~ ~ ~ e r s
comp~ex,c h a n g i with
~ ~ time
modify their behaviour as time goes along,
~ o s ~ ~Ai~o~ h~o.u gsome
h res
m a r ~ e res~onses
using control theory, it is g


with~ usin~

is relatively smooth
s are another search

~ n f o ~ t i Technology

iscrete po~ntsin the search ace and selects those gro

solve the ~ r o b l e ~ .
The basic genetic a1 nithm, as d e s c r i ~ ~byd GoIdberg [35], can be Written as follows
a population and set the generation counter to zero.
2. Until done or out of time, do the following:
fitness o f each m e m ~ of
e ~the popula~ion.

c r e ~ e nthe
t generation cou~terand go to step 2.

. Genetic a l g o r i to~ evolve a population of trading agents

~ p t i o n with
s Agents

A simple electricity market with four generators that provide

is modelled. ~ e n e r a ~ are
o ~ d~spatched
to meet demand and a
from the aggregate ~ ~ g i cn a curves
o f the dispatc~edgene~tors
and $34) are offered with valuatio
prices of $15, $20,
les and the ~ a r ~ e t data. ~A-basedagents then buy and sell the o ~ ~ ~ato n s

Power System ~


5 and ~

lack-Scholes prices. Implicit in the ge~ierationof buy and sell signals is a valua~on
of the put options by each of the agents.
Hourly demand data for an extended period was prov~dedby a large
lity and was used as a source of realistic load data in this s i ~ u ~ a t ~See
arker price data: Before evolving strategies for
ata was nee~edwith which the put option prices were calcul
hourly demand data was used in conjunction with the gen~ratorp
e the ~ ~ kprice
e t in an iterative procedure re~iinicentof witthe suppliers has a unit that is ~ o d e l l e dwith a q u a ~ ~ ~ t i
( Cost = a + bP + cP2). See Table 1 1.1 for the values of the CO cients. The supplier
uppliers m ~ n i m ~
rod~cespower as long as the market price does not fall below
itial cost (which is determined by their minim^ product~onlevel).













ernand on vertical axis ( M W ) versus time (hours)

Generator parameters




























The marginal cost is found by taking the derivative of the cost curve ( A = b + 2cp).
The m a ~ ~ i ncost
a $ curves for each generator are shown in ~ ~ g u 11
r e7. Note that each
genera to^ has both a minimum and a m ~ i m opera
u ~ tin^ level. ( t a ~ pand s h u ~ d o ~
costs, ramp rates, and minimum up and down time constraints were not G
this ~ i ~ ~ ~ a tIfi the
~ n market
price is below the mini mu^ ~ ~ ~ i n a l

Information Technology Application

generator, that generator is removed from consideration and the market price
recalculated. This process is repeated until demand is balanced by a set of genera~ors
b produce
at the discovered price. If price d ~ 5 c o does
v ~ not
for whom it is p r o ~ ~ to
occur after 20 iterations, the market price from the 20th iteration is taken as the ~~~~t
price. (Under this simple scheduling scheme, it is possible that a unit could be forced CO
produce below its minimum marginal cost but a check showed that this never
A brief c~ari~cation
at this point may be in order to prevent confusion in the use of
the term spot. The market price is referred to here as the
~ ~ ewith
p the
i terminology
~ ~
used in finance (i.e. options prices
prices); this is not to imply that the hourly market here is the s
market (i.e. the spot e l e c ~ cmarket
as the real-time ele
price data for a typical week is shown in Figure 11.8.
3 . Standard deviation of spot price: The standard deviation (s
oles formula. For a given hour, sigma is ca~cula~ed
used when calculating the B1
period hours prices. The s ~ n d a r ddev~ationof the
using a window of the last
market price is shown in Fi
ut options price data: There are four put options, which c m be bought and sold,
aving strike prices of $15, $20, $25 and $30. The market valuation (price) of each o f
these is calculated using the lack-Scholes formula for put options, as pres~ntedearlier.
Note that the risk-free rate is taken to be constant t ~ o u g h o u the
t simulat~onand
that T-t is a constant 90 days. This was done to prevent having to roll over the
options position because the expiration date was reached.
~aluationsfor the put options are shown in Figure 1 1.10. ne can see that they go
up and down with swings in the underlying spot price of electricity and that the put
options with higher strike prices have higher market valuations, as would be expected.

Each agent in the population buys andor sells the four put options. These agents act
according to i n t e ~ a l ~gene~ated
buy and sell signals. These signals are ~eneratedu s ~ ag
GA to vary the coe~cientsin a mQdified ~ ~ a c k - ~ c h ocalculation.
~ p t i o n could be
traded only for peak periods on weekdays, i.e. Monday-Friday, 1l.OOa.~.-4.0O~.m.
GA val~ationof options and buyhell signals: The GA is
as a string of real
number genes. The number of genes is determined by the c
on being p e r f o ~ e d
by the GA (described next). For these simulations each GA has eight genes, each of
which is a real n ~ b e r ,
The equation currently used by the GA to generate a buy or sell signal is a
modified ~ ~ a c ~ - S c h ovaluation.
A signal to buy or sell an option will be generated if
the GA valuation minus the market valuation is greater than some tbes
dl and d2 in the lack-~choles formula are recalculated using a modifi
a, where CT = (Gene2).CT and where LT is the standard calculation
deviation of the spot price. A buy signal is genera~ed if
[Gene0 * X exp( --r * (2 - t ) ) N(- d1)- (Gene 1). S N(- d2)] + (Gene 2 )
greater than the Market Price. Similarly, if a new d l and d2 are calculate
rea ate^
[(Gene4)-x . e x ~ - r . ( T - t ) ) . N ( - d l ) - ( G e ~ e 5 ) . $N(-d2)f+(Gem7)
then a sell
is generated.

Power System Restructuring and ~ e r e ~ l a ~ o n


1.7 M a ~ ~ icosts
~ a l on vertical axes ( $ / ~ W vs.







Spot price on vertical axis ($/MWh) versus time (hours)



~ n f o ~ a t i oT ne c ~ n o l Application



Standard deviation of spot price on vertical axis versus time

e and Deregulation

Power System ~

Valuation for Put 0 (strike=$l5)

Valuation for Put 1 (strike=$aO)





60 80 100
V ~ l u a t i ofar
~ Put 2 (strike=$25)








1.10 Market valuation for the put options ($ vs. hours)

rodu~tion: AAer fitness is calculated, the agen~sare sorted accord~ngto their

ss. Reproduction is performed using single-point crossover of two parents selected
from the best half of the population using r
selection, One child is created and
~ e ~ l a can
e sagent in the worst half of the popu
Each childs genes can be mutated in four different ways (bearing in mind that the
genes are real-valued):

2% of the time the gene is r e ~ ~ a c erandomly.

5% of the time the gene is multiplied or d
10% of the time the gene is multiplied or
1% of the time the sign of the gene is ch

an do^ genes are generated according to the relation:

NewGene = ~ e n e ~+iRandom[O..
where GeneMin and GeneMm are the max and min values of that gene over the e ~ t i r e
~opulation. (This was tried as a reasonable way of ge~eratingnew genes without
has collectively learned about the re~sonableran
because the space for real numbers is infinite.)
a coefficien~,
This process is repeated until every agent in the worst half of the popul~tionhas
been replaced. (A variation on this theme is to replace the worst
on with randomly generated agents, in an effort to introduce ne
1 and prevent stagnation.)

Results: The GA was able to evolve a strategy that co~~istently

made a profit buying
ut options in this market. As shown in Fi

Infi3mation Technology Application

ent is positive and ~ m p r ~ v over

e s the generations, ultimately reaching a value of
per trade (with one trade allowed each hour).
Figure 1I. 11 also shows the fitness of the worst agent and the average fitness for
the whole population. One can See that at the start of the run most agents a c ~ a l l ylose
money (make a negative profit) but by the end of the simulation the aver~gefitness has
risen to nearly zero. Figure 11.12 shows the best genes from 4 different runs.







Maximum Fitness



Minimum Fitness


' 1







Average Fitness

igure 11.11 Maximum, mini mu^ and average fitness over a typical run. The vertical axis m ~ a ~ r e s
profit per generation; the horizontal axis counts generations.

Solving the optimal power flow (0
associated with


m is ~ n d a to~ the~ ~ n b u~n d~l i nof

n open access and is of increasing
dereguiated environment of the electricity
ension n o n - l i ~ ~optimisation
in solving the OPF prob
which is difficult to solve. The ~ o ~ p u t a ~ ~difficulties
its use in power system o p e ~ t ~ o n s .

gene0 -2.7386
gene1 :-I 4.23i
gme2: 4 . ~ ~ 9 6

g~ne5:-6.441 1
gene& 2.6333
g e n ~ 7-6.97
~ 17
Fitness = 1.7178

The best genes aner 100 generations from 4 ~ f f ~ rruns


0~~~~to ensure conv

as a result, many local

app~iedto the IEEE 30-bus test system under different ~ e n e r a t o ~


The OPF problem seeks to optimise s t e ~ y - s ~power
a t ~ system p e r f o ~ with
~ ~ reespec^ to
an object~vefwhile subject to numerous constraints. For optimal act
dispatch, the objective ~ n c t i o nJ, is that o f total g~nerationcost.
ion o f ~ansmissionlosses and voltage level optimi



(1 1.1)

subject to

of control variables (these include generator active

tap s e ~ i n g sx) ~is the vector o f de~endentv a ~ a b l (1e ~
) is the ob~~ctive
to be optimi
generator reactive po
are the ~ ~ i e q u acloi n~ s ~ a ~ on
power ~ o n s ~ a i ~ t s ;

EP seeks the optimal solution by evolving a population of c a n ~ ~ ~saot ~e ~ ~ i over

ons a
n ~ m ~ of
e rgene~at~ons
or i~era~ion
f o ~ ~ from
e d an existi~gpo~ulation
prod^^^^ a new solution by perturbing each component of an exis
a ~ o u n t .The degree of optimali~of each of the c ~ d i d a t eso
i~easuredby t h e i ~ ~ t n ~which
s s , can be

ugh the use of a c o ~ p e t i t i oscheme,

the i~dividualsin each p
h other. The winning i n d ~ v i ~ ~ a l s
the next generation. For optim~sa~~o
the more o p t ~ so~utions
have a
er chance of surviv
lation ~volvestowards the global optimal point.
ive and the process is ~ e ~ i n a by
~ ea dstopp
Rer a s ~ e c i ~ number
o f iterations or
no apprec~ablechange in the best so~utionfor a certain n u ~ b of
e ~ge
adopted in the present work. The main stages of the EP t ~ ~ ~ n~c l ui ~ ~~ int i~ua ~ ~ ~ a t ~
mutation and compe~~tion
are shown in the ~ o w c h oa f~Figure. 11.13.

e s ~ c ~ and
~ nD~re~lation

ased on the EP me~hodology, an a l g o r i t ~for solving the PF ~roblemcan be

e s ~ b l i s ~ e dThe
. basic f l o w c ~of~the algo~thmis shown in ~
i 11.13
~ withr its ~
components described below and in Sections 1 1.4.2 and 11.4.3.
s Q l ~ ~An
o individual
in a pop~~ation
re~resentsa candidate
ts o f that solution consist of the co~trollableand uncontrol
on at all
v ~ ~ a b S~ ~e e~ c. ~ ~the
c ac ~o l~~~ o ~ v~aa~ ba b~~eeare
s ~ p e c i ~ epower
g e ~ ~ r a t (PV)
o r nodes other than the slack node, the specified voltage m
at all PV
nodes and tap positions for variable tap t r ~ s f o ~ e rEach
s . candidate solution also stores
depe~dentvaria~lessuch as the most recent load flow solution for subsequent use in
~ i t ~ a l i s i nthe
g load flow on the next iteratio~to reduce c o ~ p u ~ t i otime
n within the
loadflow algorithm.
Each o f the con~ollableva~ablesof an i n ~ v ~ isd i ~n iat ~ a ~rs e~~ n d o ~
using a uniform random number ~ ~ s ~ i b within
u ~ o its
n feasible
. For example, for the
s p e c ~ active
~ e ~ power generation for a PV node i, with acti
we have

(1 1.2)

where U{Pm,,
P,, is a ~ i f r o~ ~d numbe~
o~ ~ b e ~ e e nP,," and P,. In additio~to this,
one cand~datesoiution will have its specified active power generation for all PV nodes
excluding the slack node set to the economic dispatc~solu~ionfor the system
active power load as the aggregate active power load of all nodes plus 2% to appr
~ ~ s ~ ~ losses.
s ~This
o neconomic dispatch solution is obtained using the

tioons: Each candidate s o ~ ~ t i is

o nassigned a fitness to ~ e a s u r its
ect to the objective being optimised. In the case of active and reactive
tness of individua~i will be,


f i =

VP, =

K , ( v ~- 1 . 0 ) ~if Vj > v,- or V, <' V



~ n ~ o ~ aTechnology
~ i o n ~pplicat~oi~

initialise Population

Make a gradient step

Evaluate loadflow and assign fitness to

altered candidates

~ 11.13
g Flowchart
~of EP-OPF

cost of g e n e r ~ t i oand
~ C, is the
In tile above ~ ~ u a t ~ o nis, the ~ a x i ~ u ossible
i. The term V?, denotes a penalty term on PQ or swi
eneration cost of indiv~~ual
node j for v ~ o l a preset
~ ~ g voltage limits Y,~,

represents a penalty on

a reactive power limit. K, and Kq

penalty weighting constants, It is
not n e c e s s ~ yto impose a enalty on slack node active power ~io~ations
as the at at ion
stage helps to satisfy this constraint. The EP-OPF algorithm seeks the solution with the
m a x i ~ u mfitness.
~ ~ uA new
t ~
~ ~ of
: OFF solutions is produced
from the existing population through the mutation operator. A new indivi
from each ~ndividua~
p i , where thejth OPF variable in the new ind

where x:> denot~sthe value of variable j in pIr. x, is the value of variablej in the parent

~ ( O , ~ is
~ ,a )Gaussian random n u ~ ~ ~ with
ber a


of zero and a s

deviation of oJ,The e x ~ r e s s i ~esigned

for c,,i s

(1 I .5)
w ~ e r eJi is the ~ ~ eofsi ~s d i v ~ d ui; af~,,, is the m ~ i m u mfitness wit hi^ the po~ulation;
xY,x;ltn denote the
er and lower limits of variable j ; a is a ~ o s i ~ ~ v ~
tly less than unity; and r is the iteration counter. The term a'
ation of~setthe rate of which depends on the value of a
(1 1.5) that a solution that has a much lower fitness than th
value fora,,; hence it will be moved further by r n u ~ ~ i oton a
To help in the satisfaction o f the slack node active
c o ~ ~ a i ~allt sunits
other than the slack are assigned R loadi
their dispatc~esi s then compared with the total generati
of that indiv~dua~.
If the difference between them is with
the slack unit, then the candi~ateis ~ c e p ~ eIfd .not, the process
five a~empts.If with~nthese a~emptsa feasible assignment is n
c o n s ~ a i n ~tod force satisfaction by sharing the ~xcessive
r ~ ~ a i generators
n ~ g as follows.
ing the slack node active power in an i n d i v ~ d has
e slack unit is unit 1, the total available capacity o f uni


(1 1.6)

~xce$sivegeneration of the slack node is



is the SUM of the active power demand an the tran~rnissionloss the value of
which is set to that found in the i ~ e d ~ a t prev~ous
e ~ y load flow s ~ ~ u t i oofn
The loading of unit 2 is then modified according to

exceeds the maximum loading o f unit 2, it is
cessive gener~tionof the slack node left to be sh


Information Technology Application

The above proceditre is repeated to modify the loadings of the units 3 to N. After all b:
Ioadings of the units are ~ o d ~the
~ slack
~ d node
active power will be on its
power limit is viola~~a.
: In the corn~etition stage, a s e ~ e ~ ~ ~ o n
on from the two
~ ~ ~ h a n iiss ruse
I so~utionss h o u l ~
selection*The selection t e ~ ~ n i used
q u ~is a ~ ~ ~ ~ n ascheme
their co~espondi
series of N, t o ~ ~ n ~ m
~ ~ p o nEach
~ ~j ~ di v. i d i~isa a~s s i ~ ~ ae wore
s, according to


where J; is the fitness ofindi

are t

ual i. The opponent r, is c

tes the ~reatestinteger less th

1 [0,l]. The k highe
a as ~
the ~~ ~ d~ i vini the
d next
~ ~ ~~e ~ ~ ~ r a t i o n .

(I 3 * 10)

Power System R

~ and ~R e r ~c~ u l a~t i ~ n~

method o f switching which is applied within the load flow stage. When a PY node ha
node, it is no longer possible to control the voltage at that bus
result the algorith~does not adjust the voltage o f a switched PVnode.


~ r ~ ~ iAccelerat~o~

to the large dimens~onali~

of the OPF p r ~ ~ ~ ee m
v o, ~ u ~ o nca ~
ues such as EP can take an ~ a c c e p ~number
of iterations to c ~ n v e
e speed of convergence of the EP-BPF algorithm, acceleration t e c ~ ~ ~ ~
rovide an inte~ediater e ~ m a ~ pof
i ncandidates
to a more optimal ~osition,
o nthe popu~ationis moved in
led. To achieve this acceleration, a ~ r o p o ~ of
of the negative gradient. This is achi
the dir~ct~on
o ~ ~ hofm1431. As the gradient step forms only
choice o f step size is not as critical as it is in a
to a constant sniall step size to enswe convergence.
The sens~tivityo f the s o ~ u ~ otonc h ~ g e s
ent variab~esvaries
solution is less sens~tiveto changes in activ
than to ~ h ~ g ine s
magnitudes and iransfo
ap settings. As a result of this, di
has a large step size while
r step sizes. These variable-

D is pr~vidinga focused local o p t ~ i s a t ~ o whil.

ation. Reactive power penalty terms are not includ
SD f o ~ ~ u l a t i oexcept
for the slack node, which cannot be switch
process. The effect of generator node sw~tchin in the load flow routine creates
d i s ~ r b ~ c in
e sthe solution rocess. These disturb
metho~$such as SD diverge or converge to local optima. However
o p t ~ ~ i ~ ascheme
~ i o n ese ~ r o b ~ e m
s avoided.
o reflect any penalties in the fitness function (
will often discard solutions produced
not inc~udedwithin SD
p ~ ~ a I t i in
e s(11.3).
will usual^^ incur gre
hrn p e r f o ~ swell on convex ~ r o b l e ~whe
ver, If the solution surface is multi~modalth
become trapped in a local optimum. This i s the case wh
odelled by non-convex curves such pie
ents 139,461. These c u ~ e present
a pr
and discontinuities in fie gradient.
this gradient, it is possible for the solution to cross the
As the step is bas
d i s c o R t i ~ uwhere
ent i ~ f o ~ a t i oi snno longer v
s beyond the local
such that if an active power loading of a unit crossed a disco
that b o u n d a ~ These
Iobal EIP ~ ~ e ~~~~h
w omutat
~ ~

Information Technology Application


A ~ p l ~ c ~ tSfu

The EP-OPF a l g o ~was

t ~applied to the IEEE 30-bus test system. Three sets of
cost curves were used to illustrate the robustness of the technique. The fust case
is where all curves are quadratic 1471; in cases (b) and (c) some of the cost
cewise quadratics or quadratics with sine components. Ther~forein
are many local optimal solutions for the dispatch p
thm cannot d e ~ ~ i the
n e global o p t ~ msolution^
e for va~~dating
the developed algorithm.
lemented using the 6: ~ ~ g u ~ g e
Fro computer. The speci
pro~ramwas execu
e dthe Append~x, In all cases, the standard
a l g o ~ t hand
~ system data are s u ~ a ~ i s in
IEEE 30-bus loading is used.

are represented by quadratic functions from [

In thi
s ~ m a ~ s in
e dTable 11.2. The program was run 100 times with the se
A p ~ e n ~The
i ~ .average cost of solution obtained was $803.51 with the mi
$802.62 and ~ a x ~ m
u ~ The average execution time was 51.4
s o ~ ~ tdetails
i o ~ for the ~ i n i m u mcost are provided in Table 11.2.
For this case, a solution of $802.40 was reported in [471. This was obtained using
penalty functions for generator reactive power limits. The EP-OPF returned a solution with
no PV nodes being switched. ~ o w e v ~the
r , solution from [47] violates the slack
-limit s~ightlyby approximately 1.7
le 11.2. Generator data and cost coeficients for base case (a)































Generation inpu?/outputfunction

Cost Coe~icients



c,= a, +b,e + C , e 2

In this s ~ ~ units
y ,
cost curves were replaced by pie
summarised in Table 1R .3 to model different hels or valve-point
cise c o n ~ oover
~ units with d~scontinuitiesin cost curves, the ~ n with
~ t
st capacity was selected to be the s
bus. The average cost of solution
$649.67 with the m~n~rnum
d ~ a x i $652.67.
~ u ~ The ~ v e ~ ~a xge~c u ~ i o ~
for the m ~ n i ~ ucost
m are ~ r o v ~ in
d eTable
blem, it failed to con
was a ~ p r o x i ~ a t e ~ y

Power System R ~ s ~ c and

~ ~ere~ulaEion
~ n g

D has d~~ficulties
with n ~ n - c o n vs~o ~l u t i ~surfaces.
It is
global o ~ t i if~ the
u ~ o d i ~ c a ~di e~s nc s~ b e ~
ever, the global o p t i ~ u mwill
ing intervals for units 1
entire solution space unlike
The voltage profile at the solution is shown in

d ~ ~ o n s ~that
a t ethe~

I -

- -






Voltage Profile Solution in Case (b)

Generator cost coefficients in case (b)








Cost Coefficients


















~ ~ n e r a t i oinput/output
function C, = U, c b,e -I-

curves of the generators ~ ~ ~ n e c ~ e

onent s u p ~ ~ ~ p o s e d
loading effects [39,

are pro~idedin Table 11.5, To i l l ~ s ~ r a ~ ~

stics of the po~ulationover the 100
it can be seen that the El?-0

.15 Coizvergence ofthe EP-OPF algorithm in case (c)

thm i s applied to this case its abiIity

dependent on the s
of n Q ~ - c o ~ v eeost
x c ~ ~ ethe
s , a b i ~ of
i ~the
sol~tiQnis great~yreduced. The ~ ~ a l lsearch
e l mechan~smsof
method for a dirccted local search, ~ ~ o w eperform
v ~ ~ , well in these cases.
Generator cost coefficients in case (c)

Cost cQefficien~$

US No,
















i n p u ~ o u ~ cost
u t function

C, = a, + b,c + C,

set to an almost pure^^ cost-ba~ed

le, may have a less des~rablevol
the objective ~ n c t i o nof
~ ~ ~ t i ito is
n s~ ~o s ~ ~to
de a flatter voltage profile.
Ideally all load nodes will have a voltage m a g n ~ ~ of
d e I per unit. To ~ c ~ this
~ the
~ v e
~ ~ e~ ns c st i o n(I 1.3) was ~ o d ~ to~ e d

Power System Restructuring and Dere





-1.0)~ if V, $1.0,

k aP


The ~~r~ VF, denotes a penalty term on a load node k and K,is a constant penalty
he ~ ~ ~w ~i ~ ~then ~SD if o ~e u l as t i o n
v ~ o ~ w~ ~tr e~also
~ n
to the form of VFkabove. With this penalty the
1 a ~ ~to ~m ipn ~t~ i s e
the cost o~generationwhile trying to ~ a i ~thet load
a ~ fl
To ~ e m ~ n sthe
~ teffect
of this change, case (b)
The voltage profile achieved is shown in Pi
ge level to load nodes
51.54, which is close to th
able 11.5. Of the 10
a b e ~ e profile
than that found in (b
~ i f ~ cinu~lr ~o v ~ daidne~q u a ~solutions.

ble 111.5 ~i~~~








solution found by EP-OPF ia case (c)

Case (a)

Case (b)

Case (c)

Case (d)


17.53 I

I .030








een widely used in the power in

relaying s c ~ ~ r n load
e s ~ forecasti

Power System Restructuring and ~ e r e ~ ~ a

power of the V Q Neumann
digital computer with the abili
d e ~ ~ s ~ and
o n sto
y o r d i n a ~ex~erience.ANNs have widely b
For e n e r ~ yrnanage~ent,load flow and
However, most existing ANNs for electri

ions such as load

ill be shown in this

11 be s h o that
~ this new c ~ m ~ I e x
to eti~ateisba bar voltages in a load flow problem.

e are n n~mbero
tota~lingthree lay
All the x and the w in
rs within an i n ~ e ~[O,
a l I].
that w belong^. A set o f
erscript of each w
uts, dk,for b l ,...,2, ~ o ~ ~ s p oton adset
i ~of~i n ~ ~ txj,j=19
s , ...,a, is used as ia
ard sigmoid function is e loyed and the ~ollowinge ~ u a t ~ ohol

Figure 11,17 shows a

cal A for real
nodes and I nurn
nodes, rn number of hi
is ~ e ~ is ofreely
~ extensib

hidden node

7 A typical ANN for real numbers


k -


=1, ... 1


(1 1.12)

i = l , ..., rn


y f ~ n c t i E,
~ nis~being ~ i n i ~ i s e d

to obtain an o ~ t i ~set
a lof values o f w usin the ~ h ~ l l - c l i ~ bai n ~~'
,the ~ o l ~ ~ w

ere 2 = step size = 1.

basic e i e ~ ~ noft sthe newly d e s ~ g ~ ~ d

ic ~ n c tsay
i z~ =~w x,
~ where x is

~so that
o at

e s t ~ c ~ and
~ n~ ge r e ~ l a t i o n

~ o ~ p nl ~~ ~xb exir sand

~ x2, the opera~i~n
is clearly show^ in the ~ o w ~ r

(1 1.15)


j =

ask e

l of the newly

Information Technology Appli~a~on


The new ANN for the complex number format

As this sigmoid function is highly non-linear and complicated, V E needs to

numerically. The method is to perturb each w by a very small amount w
values of w are kept constant. A new value E is then evaluated. The ratio of
of the new E from the old E, due to the ~ e ~ b a t i o gives
n , the colrespondi
VE. E itself now becomes a complex number and the gradient hnctio

1/2, as defined by the following equation:


versus the
In order to test the p e r f o ~ ~ of
c e the newly deve~Qpedco~plex
in handling complex numbers, a simple ~ n c t i o nshown in
e q u a t ~ o(1~1.18) is
A data set with nine ~~~~g ex
les ape ~vailableand ~~0~
uring the training process, we ~ o ~ t i n u o u keep
s ~ y track of the total s ~ u ~ e d
t from the nine training sets.



there are ~ W O~nput

For the i ~ p ~ e m e n on
~ athe
~ oconventional
on the new comp
hidden nodes and ~ W Qoutput nodes. For the imp
there are one input ~omplexnode, three h~ddenc o m p ~ ~nodes
and one
are set to one ~nitially
node. All values of w for both the mnve
itrarily set to 1.5. The
before ~aining,i.e. a fair initial guess, and
two ANNs d ~ n ~g
~ is ~
h i s ~ of
o ~s ~ u ~ error
e d of the nine training
ite~ationsfor the c ~ m ~ l e x
shQwn in ~ ~ g u 11
r e-20. It can be seen th
ile the real ANN can only
ANN to arrive at a total squared error o f
~ c h ~ e av etotal square error of 3 . 8 ~ 1 0after
- ~ 23 000 i t ~ ~ ~ i oAfter
n s . the two
while the c
a value of x = 0 . 2 5 ~ ~ . 2is5
should be 2.25-jJ.75. The real
error, while the complex A gives an output of 2.3-jl.75, i.e. 1.8 % error. From this
illus~ativee x ~ p ~itecan
, be conclud~dthat it is better to
systems involving complex numbers instead of using a real

te 11.6 Sample values ofthe complex test function

5.1 - j4.9
2.1 -j3.8

0.1 -+ j0.l
0.1 +j0.2

1.1 -j2.7
4.2 j1.9

0.2 +j O . l

2.7 j2.3

0.2 +j0.2

I .74 - j Z
3.3 j0.9
2.61 - j1.34
1.97 -.j1.37

0.2 +j0.3
0.3 +j0.l

0.1 +j0.3

0.3 +j0.2

0.3 Cj0.3

o n~ c ~ nApp~icat~on
o i o ~

Error history of two ANNs under training

In order to make a fair comparison, the computer sim~lationhas been carried out again
by us in^ thee d~fferentnetwork con~gurations. The same functi
as shown in equation (1 1.18) and Table 11.6 have been used
consists of two separa~ereal NNs, each consisting of one real input node,
node and one real o u ~ unode,
thus t e ~ Two
e ~S e p a ~ W
~ es . The sec0
ut nodes, two real hidden nodes and two real
The third c o n ~ g u ~ a t consists
of one
complex hidden node and one ~omplex
bjective of this simulation is for detailed
reduced by 10 times CO
Figure 1 1.21. It can be seen
b e h a v i ~ ~ofr two separate NNs
came there is no crossery poor, as expected
i n ~ Q ~ a t ib~tween
the two real
error a l ~ o u g hit takes more iter
ce, it can be seen fmm both Fi

. However, the time duration of

an that of the conventional real
, both NNs have more or less the same
ction of this section, complex
widely used in electric power systems and, thus, the complex9 design shod

Power System R

3 9 ~

~ s ~ andc ~ e~ r ~~~ lna t ~


whenever ANNs are applied to electric power systems. One typical example of a ~ p ~ y ~ g
the 'complex' ANN to load flow analysis is shown in the following section.
0 35 ................................................................................................................................





i 11.21gError~history~of three
~ N


s for comparison

App~icationof 'C'omplex"ANN to Load Flow Analysis

with one or more hidden layers is

s u ~ i ~ i ein
n torder to approximate any conti
n-linear ~ n c ~ i oarbi~arily
well on a
compact interval, provided sufficient hidden neurons are available [53]. The power load
flow problem is by itself a non-linear problem and, hence, it can be ~ a I y s e dwith the h
of an ANN, A six-bus network, as shown in Figure 11.22, has been used to test
performance of the newly developed 'complex' ANN. us-1, bus-2 and bus-3 are
generat~rbuses while bus- 1 is the swing bus.
Bus-4, bus-5 and bus-6 are ordinary load buses where the P (active
are to be specified. The training example is generated
using ~ e ~ o n - R a p h s oalgorithms.
This is just an illus
ng real application, the 'complex' ANN will continuou
time state of the network in terms of voltage, P and . The details of the network
are shown in Tables 11.7(a) and 11.7(b) below:

~ n f o ~ a t i oTechnology



i 11.22
g The ~six-bus~ network
~ for load flow computation
.7(a) Busbar power for load flow study























Network parameters for load flow study

bus- 1
bus- 1

R (P.U.)
b~s-6 0.07


B (P.U.)

0.0 1

Power ys~emR e ~ ~ ~ ~ i n





14 training examples, shown in Table 11.8, have been generated by the sofhvare
for l e ~ i n by
g the two ANNs. In this case, the voltage at buse three gener~torsmaintain constant voltages at the c o ~ e s ~ o n d i
3.8 Training examples for the neural networks




0.964-jO. 108
0.95 190.086
0.882-jO. 108




here fore, inputs to each

and three inputs to the complex*
two o u ~ u nodes
for the real ANN and one
the subscnp~refers to the number o
n e ~ o remain
r ~ ~ n c h ~ during
~ e d the trial test.

load flow network is learned by the real9 and CO

and V5.The real
~ o m b ~ n ~ tof
~ oP4,
n sP,, P6, Q4
. The initial v a ~ ~ eofs all wei
fan ordinary sigmoid function for real
[O,I] and it is not suitable for this applica~ion,the sigmoid ~ ~ ~ ~was
t islight~y
o n mod~~ed
to the f o ~ l o w i nform:

I n f o ~ ~ ~Technoiogy


The limit of iterations for both ANNs is set to 230000 as in the case of Section 11.5.3.
Figure 1 1.23 shows the variation of the total squared error of the two ANNs with r ~ ~ etoc t
the number of iteration.



2 0.05


0.04 0.03 -


Gomplex PlN















2 3 Training errors of two AMds for power load Row

After the two ANNs have been trained, they are used to estimate V, under differen~testi~g
samples of PI and Q,, i = 4,5 and 6 . There are two categories of testing samples, first set
(Cases 1 to 7) being those P and Q randomly selected in between the limits of P and Q
i n c ~ ~ d eindTable I 1.8. Another set (Cases 8 to 12) is randomly selected outside the limits
of the two ANNs. The P, and QIunder test are shown in
to test the ability of ge~e~alisation
Table 11.9 while the results are shown in Table 11.10.
TaMs 11.9 Test cases or the neural networks
Case P4+jQ4



0.75+j0.79 0.84+j0.73
0.88+jO.S1 0.77-tj0.80
0.72+j0.79 0.82+j0.89
0.82-tj0.89 0.80+j0.76
0.71+j0.77 0.79tj0.82
0.83+j0.87 0.751-j0.82
0.80ij0.80 0.80+j0.80


Power System Restructuring and Deregulation


0.61-1-j0.69 0.92+j0.95
0.58-tj0.69 0.76+j0.94
0.791-jO.87 0.61+j0.57
0.60-tj0.60 0.6O+jQ.60
l.OO+jl.OO l.OO+jl.OO


Comparison of the neural networks

V, Meal NN


V, /Correct


0.935-jO.109 0.920-jO.1I I
0.924-jO.1 15
0.912-jO.103 0.923-jO.115
0.91790.110 0.922-jO.109
0.932-jO.101 0.923-jO.2 14
0.923-jO.113 0.919-jO.101
0.993-jO.064 0.914-jO.077
0.785-jO.169 0.928-j0.141



Ys/Complex NN
1 16


o Figure 11.23, although there are on

t r a ~ ~ nexamples,
it can be seen
is smaller than that of the newly
that, initially, the total squared error of the real
ANN. Actually, after 500
~ e v e ~ o p e~comp~ex9
s, the total squared error of the
WN has akeady attained a steady-state va
d 0.032. AAer 4300 iterations,
the complex ANN catches up with the real
and the total s q u ~ e de
improving. A ~ e 23000
iterations, the error is
ctually, if we c o m p ~ e
e 11.20, one very interesting result can be noted, It seems that the real
get itself into a m i n i ~ u mafter a small number of
can continuous~yimprove itself during the le
time for training is about 90 s and 150 s for the real and comp
PI1 300 PG is used under ~ i ~ d o 98,
w s A l t h o u ~the
~ c ~ a isc$imi~ar.
It is suspected that it is quite easy for
er random initial guesses of weights have been trie
similar resu~ts. This is one merit of the newly developed complex A m . Next, Tables
11.9 and 11.10 are referred to where we want to test the power of pred~ctionof the two
ANNs. The first seven testing samples have been randomly selected in be^^^ the limits
of t0.7, 0.91 of both the P and Q. The complex ANN behaves better in all cases.
~ o w ~ v ewhen
r , five alternative testing samples, selected outside the limits, are tried, the
ex9 ANN behaves better except in case 9. Et appears that, in general, the CO
s more p r e f e ~ ~for
l e the present application.

I n f o ~ a t i Technology


power has doubled
Since the 1980s formation process in^ has exploded. Process
every two years. Today, the Intel Pentium I11 runs at a clock spee
Et is expected that by 2002, the chip could run at a clock speed of 3 t
the technology could create, sto search and process vast amounts o
have yet to advance the techno y further to access and interface
easily. Tra~it~onal~y,
ith a comp~terhas involved
mouse or j o y s t i c ~ ~ a c k b aevicc to input information and the us
m the system. With the development of virtual re
(VDU) to receive output
new intera~~ion ods have been developed that allow the user to
computer- generate^, or virtual, environments (VEs). VR can be considered an e x t ~ s i o nof
ideas which have been around for some considerable time, such as flight s ~ ~ u l a tand
wide screen ~ i n e m aUsing
such systems, the viewer i s presen~edwith a ~ c r which
e ~ ~ ~
on of the visual field giving a powerful s
ite of technologies which permit human
resen~tionsof i n f o ~ a t i o nheld in c
, a u d i t o ~and tactile stimuli, eac
cant extension to the way the users kte
shared unders~nding,lead
to simulate inacc
allowing the user to extract the lessons to be learned without the inherent risk, This alltsws
a crte a ~ - ~ ~with
m e a computer-generated e~vi~onment
in a s i ~ p l ~ ,
the user to i ~ ~ t ~ rin
natural m ~ n e rw7 ~ t ~ othe
u t need for extensive mining. Pres
budget and
requires high levels of
nts in low-cost desktop
e technology more
of smaller ~ompanies.The strength of VEs is in
ion of the n a t u int~ractive
skills of the human. As
esktop VEs systems, inte~ratingnovel display
widely used. The po~ential
and a great deal of research is currently
develop these technologies into effective useable
eaply on a conventional desktop
large-screen display for mult~~user
pa~icipation.A l ~ o ~ not
g h always re~evantto
use, i ~ e r s i v erepresen~a~~ons
can involve the use of head-mou~teddisplays
tactile gloves, and other devices to enhance the effect. Ap~licationsrange from simulations
cal items ~ ~ a n g ~from
n g buil~ingsto mole~ulars ~ c ~ r e to
s )more abs~act
such as the disp~ayof large amounts of t ~ ~ e - v data
~ ~ (e.g.
n g analysis of world
lex databases) or illus~a~ing
concepts [54].


Types of

A l ~ ~ o u githis dif~cultto catego~seall V systems, most con~guratio

gory can be ranked by the sense
sion or presence can be regard

Power stem ~

the user is focused on the tas in hand. ~

to be the pr~ductof several param
ity, s t e r ~ s c o p ~vic
field of regard and the
in i s ~ ~ and
~ ~theo level
n of imersi
factors ~ v o i v e ~ .


e presen~e
~ i is o

of the display. For

VE will incr~asethe

terns are not re

systems (adapted from [SS])

Main ~ e ~ t u r e s

Sense o f ~ i



~ Low

Field of regard
Sense of immersion

~~ e~ ~ ~i ~ m

~ o n ~ L ~ w Mediu~-High

Vision i s the m a i ~sense th

shade, etc. V



d e ~ i ~ e rhave
ed such as 3-D graphics, vwi
~ i s very
s c~o ~ p ~l e xand~ concen~ateson ~ n t e ~ r e t a tof
i oi~n f Q ~ a t it~~naist

ective (i.e. what is seen varies from per so^ to

tter at sim~atingvision than non-imme~ive
' forcing concentration on the virtual I
on-po~able.There are also three related

II.~.6 Cave
Gave is a small room where a computer"generated world is
is made on 0th the front and side walls. This soluti
collective VK experience because it allows different people to share the same e x ~ e r i ~ nat
the same time. It seems that this t ~ c ~ o l o g i c solution
i s p ~ i c u I ~ appropriate
cockpit simu~a~ions
as it allows views from differ~ntsides of an i ~ a ~vehicle.
i n ~

~ cameras
~ d at
systems immerse a viewer in a real world that is ~ a p by~video
a d ~ ~ location
~ a n and
~ allow for the remote m ~ i ~ u l a t i o n
~ ~ a ~ o Telepresence
is used for remote
exp1orai;ionlmanipulation of hazardous e n ~ ~ r o ~such
e n as
~ sspace and u n d e ~ ~ ~ ~ ~ e r .

of real e n v i r o n ~ e ~with
logies of ' ~ u g ~ e n t ereality'
allow for the view
s ~ p e ~ ~ ~ virtaaI
o s e dobjects. As a matter of fact the
's view of the world is
sup~lementedwith virtual objects and items whose mean in^ is aimed at e ~ c h i the
ation content of the real e n v ~ o ~ e n t .

has been used by the military and by space scienti

p h ~ a c o l o ~ i s~~os l, e c u biologists
and theoretica~~hysicists
into its domain. Simply speaking, the t e c ~ o l por ~
o v i ~ hei
ical attributes of scientific models. It is a too2
on of data to a new dimension, to the point at which the user, i
teracts with, or is e n ~ l by
f ~the model that has been c r ~ ~ t e d .
to accelerate scientific ~nders~anding
by enablj~gthe

VR to v~sual~se
and ~ r o t o imaginative
~ e
p ~ o j e ccan
~ s h o ~ the
~ n Iif~cyc~e
make them available much earlier than would otherwise be the case.
n ~ e ~ ~ tmedia,
i v e where a wide variety of ~ x p e r i ~ ccan
e s be create
exp~oreat their Q W pace,
choosing their own ~ a t h w a y ~ ~
As the technologies of VR evolve, the a ~ p l i c a ~ of
i s assumed that VR will reshape the interface b e ~ e e n
by ~ ~ f e new
~ nways
g for the c o ~ u n ~ c a t i o

Information Technology Application


and the creative expression of ideas. Note that a VE can represent any 3-D world that is
either real or abstract. This ~ncludesreal systems like buildings, landscapes, spacecra
s c u ~ p ~ rcrime
e s ~ scene recons~ctions,solar systems, and so on. Of special jnteres~are the
visual and sensual representation of abstract systems like magnetic fields, turbulent flow
s t r ~ ~ t ~molecular
models, mathematical systems, auditorium acoustics, stock
behaviour, population densities, and any other artistic and creative work of abstract nature.
These virtual worlds can be animated, interactive, shared, and can expose behaviour and
"hough still relatively new, VR has already been put to use in a number of different,
iniiovative ways. In the world of industrial design, engineers are using CO
simula~ionsof prQto~pesto speed up the time required to take a new product from the
drawing board to the productioii line. In the world of science and medicine, doctors are
computer-simulated pathologies to determine the outcome of ~o~entially
cedures before these procedures are actually p e ~ o ~ on
e d
il e ~ ~ i n e e ~architects
and interior designers are using VR s
realistic, computer-genera~edsimulatjons of proposed environmen~.The
can then be ~ o d i ~ eindreal-time based on client input, zoning ordinances, ~ e s t h e ~ i c
concerns and budgetary considerations.
In the world of weather fore casting^ VR is being used to predict weather p a ~ e and
~ sto
where a storm will make 1
create h ~ r i ~ a m
n e o ~ wh~ch
~ ~ can
s accu~atelyd
s astronomy students tour
and when. In the world of higher education,
galaxies and physiol
students tour the innermost workings of the human body. A VR
sim~lationof a CO
pip~workla~out,for example, could allow access, main~nance
and safety aspects to be examined at the design stage, more effectively than by mode~~ing.
It imi~ediateIypermits the evaluati~nof routing and accessibili~~
thereby avoiding
expensive, t~~e-consuming
correction during or even after c o n s ~ c t i o nT~h e r ~are many
portunities that have yet to be explored.
In the ~ n ~ o ~ a t iage,
o n VR has been identified as one of the
areas. There is a constant improvement in marketing per
of both
quality of appl~cat~ve
VR systems and receptiveness of potential customers, T h i s is due to
decrease of the cost of VR systems and devices, (2) the
rmance r e l i a b ~ l iof
~ the t e c h ~ o l o (3)
~ , the extKeme~y
ed from VR use in its various forms and purposes such as
gh the t e c ~ o l o g yis mature enough to have d~fferentappli~atio~s,
resolved for its use for practical app~ications.
The sensational press cov
associated with some of these t e c ~ o l o ~ has
e s led
many ~ o t e n ~ iusers
a l to overe
e the actual capabi~~ties
of existing systems. Many of
them must a~tuallydevelop the t e c ~ o l significantly
for their specific tasks. Unless
their expertise includes ~ ~ o w l e of
~ gthe
e human-machine interface requi
application^ their res~ltingproduct will rarely get beyond a 'conceptual
~racticalapplications. Current VR products employ proprietary hardw
There is little doubt that incompatibility between different systems is restricting market
growth at present. It is probable that as the market matures, certain s t ~ d a ~will
d s emerge.
The premise of VE seems to be to enhance the interaction between people and their
systems. It thus becomes very important to understand how people perceive and inte
events in their environments, both in and out of virtual represen~tion of reality,

~ u n d ~ ~ ~questions
n t a l remain about how people interact wi the SYs~ems,b v h e y may
ce and a u g ~ e n cognitive
p ~ r f o ~ a n in
c esuch e n v ~ o
n ~ p l o for
y ~i n s ~ c t i o n~, i n i n and
g other ~ ~ o p l e - o ~ e

The t ~ e system
~ a consists
of an infrared camera, shown in Figure 1 1.24, a
shown in Figure 11.25. The ~nfrareddetectors inside the camera are cooled
argon to
and they sense
ds p ~ c ~
in m
the range betwee
while floppy disks and h i g ~ - s ~ e e d
proce~singon a PC,


are o ~ f e r ~tod

Power System RestruchJring and Deregulation


DMK with pannin~tiltinghnctions can give the absolute c o o r d ~ ~ tof

e seach grid point on
the power e ~ u i p ~ while
e n ~ the thermal system can give the rea~-times u ~ a c tee ~ p e r a ~ r e
of that grid point. When this information is fed into a tailor-made ~ - b a s software
~ d
e, a 3-D thermal image can be displayed and manipulated. The major prob~emhere
is with the co~espQndence
between the DMK and the thermal system, i.e. matching eve^
point sensed by the DMK lo a c o ~ e s p o n d i point
~ g on the thermal image.

2 6 Laser-based ~ s t a n c e - m e a kit

of the system and the procedure of

calibration. Sobel [62] and G e ~ e ~
ar o p t ~ s a t i o nfor c a ~ e r acalibratio~.A comp~hens
survey of the ~ ~ t e r aand
~ r ediscussion of r n ~ ~ ~for
o des~ e ~ r o nci c ~ ~was
~ p ar ~ s ~ ~ t e d
Lenz and Tsai [64]. It has been found that the
s i ~ p l e cs a~~ e r amodel and its calibrat~onpro
ti~isation. At the same time, its level o f
for our application. A pin-hok camera
of a standard e ~ e c ~ o ncamera.
in the ~ n ~ v e r 3-D
s a ~world coordin
of the image point on the thermal i
to I(Xp 5)is modelled a standard approach i
coordinates. a 3x4 matrix, is known
where the element, t34,i
t inside the transfo
scaled to ' 1'. Let
c ~ ~ ~ d i nvector,
a t e together with the two
ation of the ~ a ~ s ~ o ~ a t i o n .


with known, (xwj9ywi,

ine the 11 u n ~ Q w nt
to have more points so
an ~ v e r a g i ntechn
n is larger. In other ~ ~ r dthe
s , fQllQwingn sets

n = 6 are e ~ o u ~


( tl1 f 1 Z t13 814 121 822 t 2 3 t 2 4 131 t 3 2 f 3 3 >'

f the least sum of squares over the n number o f ~ a ~ ~ poin

b r a ~ ~ ~

From ~ ~ ~ e reight
i ~ calibration
n ~ ~ , points are

Y w j

( I 1.24)

Information T ~ c h ~ o A
~ ~ g~ y~ ~ c a t i ~ n


z wj

Power System R e s ~ c and

~ D
~ enr ~ ~ l a ~ i o ~

object has the same spatial resolution with respect to the original one. Inte~olation
surface temperat~eis by means of a similar process.
The grid points are generated in appropriate sequence by the two ~ ~ - c o n stepper
~ ~ ~ ~ e
m o t o ~ ,For each of the n number of 8, within the specified ran^^, there are m n ~ b e r of
8, ~ i ~ h another
specified range. Hence, the grid points can be viewed as elements of
es where n x m = M , each representing the x, y and z coordinates of
ely. For the (ij)grid point where i = 1, ..., n-1,a n d j = 1, ..., rn-1,
nts, namely (i+lj), (ij+l) and (i+lj+I)> are conside
ing ( i j ) , (i+lj) and (ij+l) and the other hav
(i+Xj+l). The equation of the first plane is given by the followin

(1 1.27)

ints are created on relevant planes. The surface te

in equat~on(1 1.27) can be
oint from the three vertices are


The ~ e ~ p e r a of
~ rany
e point on the three sides of the tri
~ n t e ~ ~ of~ the
~ t two
~ overtices,
i.e. the two end points
a ~ ~ ~ t i omatrix
n a l ~~nsist~
g r must be s
the e q ~ a t i (1
o ~1.29).

(1 1.29)

~ f o r m a ~ i oTechnology

11-7.4 I ~ p ~ e ~ e~ ~ ~~ ~
a t ~i op ~ ~

The competitive electricity market: raises utility cost consciousness.

n o ~ a i l yassociated with equi~menti n v e ~ e and
n ~ continuous niai
system. Power trans~orm are one of the most expensive elements in the s ~ s ~ e m .
~ d e n t i f i ~ a ~of
~ oany
n hot ots, i.e. potential faults, could provide benefits inclu
extended ~ ~ n s f o Ii
~ e r es, reduc~ion in risk of failures and i
maintenance s ~ a t e ~ i e A
s , t r ~ s f o ~room,
e r shown in Figure 1 1 2 8 , housing three 1500
kVA 11 kV/380 V ~ ~ s f o ~ ewas
r sused
, for implement in^ the developed system.

1.28 Three 1500 kVA ~ ~ n s ~ ointa~typical

e r t r ~ s f o ~plant
e r room

in the x direction, E200 m,

rection, while the s u ~ a c ete
from 24.5s"C to 44.8"C with a resolution of 0.2"C. It takes about 3 seconds to record the
and o ~ e n ~ t of
~ oa n
,thus needing more than I ~o~~
the w ~ o p~oe~ i by
There is not enough.
inates and surface t e m p ~ r a ~of
r e each
points belonging to a con
ustration while the full
i s shown in Figures 11.31 and 1 1 X . The x, y and z coordinates measured in metres, are
t ~o o ~ d ~of~ an
a ~image
the a b s o ~ u ~
int with respect to the c o ~ r ~ i n a st e ~ s of~ the
e ~
DMK. In the ~ e o m e mode,
~ ~ athe
~ 3 surface of the ~ a n s f o i ~s as
e ~shown in Fi
1 1.3 1 without any information on temperature. It should be noted that the 3-Ea surface i s
not totally identical to the real surface in this situation. The reason is that part of the

Power System ~ e s t ~ c and

~ i n ~ lation

9 T r a ~ ~ ~ o rNo.
m e3~under i ~ a g i ~ g

ower t e m p e r a ~ e , All these fe

The c a ~ i ecover has a

rdinates versus surface temperature



Y m





E -0.2




surface ~~~~e~ a ~ ~in the

f geometrical
~ ~ e rmode


ower System Restructuring and ~ ~ ~ e ~ l a t i o n

~ u ~ h e r m o rthe
e ~ user can h e l y adjwt the viewing angle to concentrate on m y
p ~ ~ c u l apart
r of the
~ v ~ ~ o n mfor
e n ele
~ e ~ o ~ r a cpmh sy
mode. The 3-0 i n f o ~ a t i o nof all compon
play. Ths designer can thus fly around
improper placement of equipm
the 2-D draw~ngsconv~ntional~y
has been com~~ssioned,
regular thermal
t spots in the equipment can i
l ~ ~ a of~ these
~ o hot
~ sspots can b
A point to be noted is that a sk
because any technically proficie
d the 3-D t ~ e ~ o g r ~ s .

In this chapter, we have considered four hot topics in i n f o ~ a t i otech

& p ~ ~ i ~ a ~ ni oa ~
n es ,l y ,~nte~~igent
agents, evo~ution ~ r o g r a ~ m i n gvi,
~ n e ~ ~ r rk s , ~
se of ~ e r i v a t ~financial
I: and useful tool for manag~ngrisk in
l ~ c a btoi ~valuing
~~ e
Scholes to set the market valuation of put options on e l e c ~ ~ ~
en used to evolve a ~ e n whose
~ s fitness was ~ ~ a u r by
e dtheir

d has failed in the

s for ~ a i n t ~ n a n c this
e optical and thermal

Iiifomatioii Technology Appl~ca~~on

devised, resu~tingin a new gradient ~ c t i o for

n back propagation. In order to demonstrate
d complex ANN is superior to the col~ventiona~
that the newly de
novel t ~ c ~ ~isqcarried
u e out for load flow
simple app~ication
power network consisting of six buses. It conc~udedthat the complex
in two aspects. Firstly, the complex
will not
the conventional real
trapped in a locd min
Secondly, it seems that there is an improved ability to
cases not fal~ingwithin the trainin

The authors would also like to thank IEE and IEEE for granting p e ~ i s s ~ otonEeproduce
the materials contained in references [4,61] and [9,1 13 respectivley.

fa: The load Row data for the system is that of the s t ~ ~ a r d

hes ll,lZ315 and 36 are in phase tap-ch

tap pin^ ranges of &lO% with a step size of 1%. The
busses is 0.95 p.u, while the upper limit is 1.05 p.u.
generation nodes have an upper limit of 1.10 p.u.
~pulationsize is set at 20 and the
The number of tournaments Nt was set at
tant M in the ~ ~ efunction
s s in (1 I ) is d e t e ~ ~ by
e dthe set o f
value o f a in (11.5) was 0.9. limit c h ~ k i was
~ g started at
Row when a previous solution w not used in the load flow in
iteration 1 when it was. For all cases the weightings within the
r ~ ~ e vtoa the
~ t case are K , = ~ 0 0 0K, q = 10,000 where QS,&is in

ing gradient acceleration is 50 % in all cases.

d in EP and in comparison studies include penalties
identical to those described in [43] for voltage violations with weighting of 20. ~enalties
for act~veand reactive power limit violations
e slack node of this
For case (d)
ngs of 30 and 10 ~esp~ctively.
e, the penalties for
voltag~v i o l a t i o ~are replaced by penalt~es of the form of Vt;;. in (
weighting K,. of 10. The SD step size for all cases (a)-(c) is 2.0 for active
0.001 for v o ~ t a gfor
~ ; case (d) the step sizes are 0.00~
for active po
er tap and 0.001 for voltage. Q-limit treatment for all nodes other
e switching
within the load Row routine.
the slack node is ~ ~ d l by


M.P. Wong, ~ ~ ~int~lligence

~ i a and
l neural network applications in power system^', Invited
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Operation & ~ ~ n a g e ~IEE,
e n 1943,
~ , pp.37-46.


Power System Restructiiriiig and Deregulation

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[I 11





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IEEE Transactionson Power Apparatus and Systems, VoLPAS-90, 1986, pp.1768-1775,
[4 11 D.B. Fogel. Evolutionary Computation; Toward a new Philosophy in Machine Intel~~gence,
IEEE Press, 1995.
. Wong, and A. Li, A technique for improving the convergence characteristic of genetic
algorithms and its application to a genetic-based load flow algorithm, Simulated Evolution and
Learning, J.N. Kim, X. Yao, T. Furuhasi (Eds), Lecture Notes in Artificial ~ n t e ~ l i ~ e n1285,
Spring$r-Verlag, 1997, pp. 167-176.
1431 H.W. D o m e 1 and W.F. Tinney, Optimal power flow solutions, IEEE Transactions on
Power Apparatus and Systems, Vol. PAS-87, 1968, pp. 1866-1876.
P. Wong and J. Yuryevich, E v o ~ u t i o n ~ ~ p r o ~ a m i n g - b a salgorithm
vironmentally-constrained economic dispatch, IEEE Transactions on Power Systems,
V01.13, No.2, 1998, pp.301-306.
[45J K.P. Wong, A. Li and M.Y. Law, ~ ~ e v e l o p ~of
~ econstrained
genetic algorithm load flow
method, IEE Proceedings - Generation, Transmission and Distribution, Vol. 144, No.2, 1997,
[46] D.C. Walter and G.B. Shebk, Genetic algorithm solution of economic dispatch with valve
point loading, IEEE PES Summer Meeting, 1992, Paper No.92 SM 414-3 PWRS.
[47] 0. Alsac and B. Stott, Optimal loadflow with steady state security, IEEE T ~ u n ~ ~ on
Power Apparatus and Systems, Vol.PAS-93,1974, pp.745-751.
[48] J.M. Zurada, Eds. Introduction to Artijkial Neural System, Info Access and Distribution Pte
Ltd., Singapore, 1992, pp.1-3.
[49] L.L. Lai, ~n~elligent
System Applications in Power Engineering - E v o l u t j o ~ aP~r o ~ r a ~ m i n g
and Neural Networks, John Wiley & Sons, Chichester, 1998.
[SO] T.T. Nguyen, Neural network optimal-power-~ow, Proceedings of the Fourth In#ernationa~
IEE, Pub No
Conjerence on Advances in Power System Control, Operation cft ~anagement~
450,November, 1997, pp.266-271.
[5 I] T.T. Nguyen, Neural network load-flow, IEE Proceedings - Generation, Transm~ssionand
No.12, January 1995, pp.51-58.
~ i s ~ r i b u ~ jVo1.142,
[52] W.L. Chan and A.T.P. So, Developmentof a new artificial neural network in complex space,
Proceedings of 2nd Biennial Australian Engineering ~ a t h e m a ~ Confeuence,
Sydney, July
1996, pp.225-230.
1531 J.A.K. Suykens, J.P.L. Vandewalle and B.L.R De Moor, ArtiJicicaE Neural Networkr for
~ o d e l l ~ and
n g Control of Non-linear Systems, Kluwer Academic Publishers, Boston, 1996.
[54] Virtual reality: personal, mobile and practical applications, IEE Cfflloquju~,
Digest No.

in the design of an immersive system, IEEE ~ o ~ p u Graphics

and Applications, Vol. 14, 1994, pp.55-59.
[56] S . Kalawsky, Exploiting Virtual Reality Techniques in Education and Training: Technological
Issues, S I N 4 Report Series, 1996.

Information Technology Applica~~on

[57] S.G. Bumay, T.L. Wi~liamsand C.H. Jones, E&, Ap~ljca~jon
of therm^^ I~iagjng,
Wilger, 1988.
[58] A.T.P. So, F.H.Y. Chan and A.W.C. Kung, A real time system for the
diseases using computer~zedthermo~aphy*,Biomedical Thennolop,
[59] E.H.Y. Chan and A.T.P. So, Application of thermography in advanced consumer elec~onics,
Frocee~ingsof the Infe#arional Symposizdm on Consumer Electronics, Beijing, C E
October 1992, pp.337-340.
technique of high-voltage electrical
[60] Niancang Wou, The infrared t h e ~ o g ~ p hdiagnostic
equipments with internal faults, Proceedings of P O ~ . ~1998,
~ ~IEEE,
N 1998, pp. 110-115.
1611 W.L.Chan, A.T.P. So and L.L, Lai, Three-dimensional thermal imaging for power equipment
monitor~ng,I.. Proceedings - ~eneration,Transmission, and ~ i s r i b ~ # ~Vol.
o n147,
, No.6,
November 2000, pp.355-360.
[62] 1. Sobel, On calibrating computer controlled cameras for perceiving 3D scenes, Artificial
Intelligence, Vo1.5, 1974, pp.185-198.
~ o r ~ h o ~ ,
[63] D.B. Gennery, Stereo-camera calibration, Proceedings of Image Und~rs~and~ng
1979, pp. 101-108.
[a]R.K. Lenz, and R.Y. Tsai, Techniques for calibration o f the scale factor arid image center for
high accuracy 3D machine metrology, IEEE Bansactions on Pattern Analysis and ~ i a c ~ j n e
Intelligence,Vol.10, NOS, 1988, pp.713-720.
E651 O.D. Faugers and 6. Toscani, The calibration problem for stereo, Proc. of ~
~ Miami,
1986, pp.15-20.
E661 R.M. Taylor, W. Robinett, V.L. Chi, F.P. Brooks, W.V. Wright, R.S. Williams and E.J.
Snyder, The nano~anip~lator:a virtual reality interface for a sca
microscope, Computer Graphics,Vo1.27, 1993, pp.127-134.
[67] G.M. Herb and C.A. Shaffer, A real-time robot arm collision avoidance system, IBEE
T r i a ~ a c ~ Robotics
~ o n ~ ~and ~ u t # ~ a t iVo1.8,
~ n , No.2, 1992, pp.149-160.

r Lsi Lei Lai

City U n ~ v e r sLondon


Utility c o ~ p ~ n i~e~s e s e n t te hd e ~ ~ e l on
v ethe
~ I ~ t e ~be t
~us i ~c s s es
~ ~ w the
a ~ n~ ~ se as
~ e~ u
t i c k ~as
y possible.
~ e c ~ available
~ l ~ for
~ Intenlet
applications is difficult,
bus~ness o ~ ~ o ~ n i towards
~ i e the Internet will
a d v a ~ t a ~The
e . u t i ~iin~d u s has
~ a~waysbeen w ~ t i n g
so that they can be purchased easily. Waiting for the In
could take a long time and c only result in loss of


at Is fheI ~ t @ ~ n e ~ ?

A p ~ ~ ~ofthe
c a ~Internet
~ n to Power ~ y s t e onitoring
and Tradi~g

catego~cs:c o n ~ e r c ~and
a l n o n - c o ~ e r c ~ a~xamples
of commercial use are p u b ~ ~ c
s information.
, financial data, roduct a d v e ~ i s e ~ e n tand
s are publication of papers, references, on-line ~ t o ~ a and
.The ~ ~ ~ risnnote only
t able to d ~ s ~ i static
b u ~in
static i n f o ~ a t i o ncan also be dist~butedin the form of active We
~ependingon information requested, or in pages such as search en
in response to ~ueriesfrom the I n t e ~ e user.
gages are pages in which changing data is constantly received. Such pages can contain online music, radio stat~ons,video or real-time data updates.

The Internet allows compiiters to talk to each other via a cable or wireless CO
order to allow computers m i n g differearl operating systems to communic
l a n ~ u a gor
~ , ~ a n s ~ ~ s sprotocol,
is ~ e ~ u i rThe
e ~ .most comm
on the I n t e ~ ei s~TCPIICP. The use of a protocol ensures that a user
information on the Internet regardless of the computer, operating rryste
~ n f o ~ a t i oonn the Internet to be universa~~y
vided in a f o ~ a that
t can be displayed success~llyan
veloped to allow data to be received in a
d o c ~ e n t are
s plain text d o c u ~ e n t sCO
presen~bIelayout [2,3].
allow software to display the text in a ~ o r m a ~ elayout.
For active pages,
languages such as J
cript or Java allow software to be included in a
added interactivi~.
s o ~ a r products
used to display Web doc
~rowsersbecause they assist the user in browsing or surfing the I
most common Internet browsers are Internet Explorer by M
~ a v i g a t by
o ~~etscape.


mat Would

thout the Internet?

met most comgu~erswould be s ~ d a l o n e

network. These c o ~ p uwould
t ~ only be able to access in
the local area network ( ~ A This
~ ~
i n f.o ~ a t i o nwould h
themselves or ~ a n s f e ~ efrom
d a physical medium suc
within the LAPS.
It would not be possible to access the latest news or obtain up-to-date
a com~uter.~ ~ e n e vaesr o ~ a r ceo m p o n ~on
t a comp
ed sofhvare version would need to be available at its location.
ical medium to be supplied to
location of the c o ~ p u t e woul
ional costs when compared
providing i n f o ~ a ~ and
on s
over the Internet.
The I n t ~ ~pro~ides
~ u ~ t i p ~ese of e ~ e c ~ o n i cn f o ~ a t ~ ~ n ,
~amuals,m a g a ~ i ~ e~s t, o r ~ ah~ s ,
s, f r e q ~ e ~ tasked
iy qu~st~on
on c o ~ ~or~progra~ming
t ~ g
problems and many more which WO

Power System Restructurhg and ~ e r e ~ ~ a t i o n

i n d u s has
~ been utilised by the power ~ n d u for
s ~s ~ e ~ l i n ~
cing ~roductivity.The best power plants are not the plants with
their computers. The best power plants will be the ones w h ~ are
c ~using the right IT tools
and using them appropriate^^.
There are many benefits to the power ~ n d u by
s ~accessing the largest resource of IT
tools, the Internet and some of them are listed below:
e r e ~ l a ~ of
~ oenergy
formation on power privatisation available for customers
esentation of private e ~ e r g ysupply companies
ice c ~ m p ~ i s for
o n energy custome~
-up to electricity suppli
cing supply chain costs
ised supply chain by
t of remote e - p ~ e r s h i p s
tomer relationship management
d control for manag~ngpeak demand energy ~ ~ c i n g
power systems component monitoring an component control
me expert advice for problems which have een expe~encedon other sites
n-line c o n s u l ~ c (ye - ~ o w ~ e d gimprov~ng
g e~ a g e ~ e n t .
automation for continuous energy supply oni it or in^ to
operation, e.g. in case of point f a i l ~ e
1 marketplace in the energy sector
floors or NetMarkets for e l e c ~ s~ppliers
c ~ ~
ce auctions and negotia~ions between energy
d i s ~ b u t o and
r supplier
Ability of governmental regulators to monitor energy companies on-line
rchase o f ~ ~ h i ornspare
e ~
parts from a wider range of s u p p ~ i ~ r ~
g of raw materials such as oil, coal or gas
-line ~ a r k e ~ ~ acontrol
c e s ~nvento~es

for teleco~municat~ons
ice provider (ISP) services
o f c o ~ o d i t i e and
s equipment

of the Inte~etto Power System ~ o n i ~ o rand
i ~ Trading


w Can I in^ the I n f o r ~ ~ t I~Need?

In order to find the information required within millions of Web sites a search engine can
be used. Most ISPs provides the Internet user with a simple search facility to search by
cat ego^ or keyword. The number of Internet search engines is constantly
Companies which are provid~ng a free Internet search facility are
advertising as a source of income. Search engines are constantly combing
amount of accessible Web pages trying to index the information they conta~n.This
indexing job is done by a parr of the search engine called a Web crawler. If specific
k e ~ o r d sare used for searching through the accessible Web sites, these k e ~ o ~ are
matched against the index and lists of pages containing the keywords are ~splayed.

Generally, the Intemet can be used to gather or publish information on all t

can be c a p ~ e din electronic format. ut finding the right information with
quality describes the problem of the usability of the Internet. One of the m
with connecting to the Internet is slow technology. If Internet users have slo
old computers or old software, the usability of the Internet is not high. Keeping technology
updated requires i n v e s ~ e nin
t hardware and software upgrades. ~ o ~ e r cusage
i a ~of the
Internet can only be effective if such investments are met. But there are more parameters
which affect the usability of the Internet and which cannot be influenced by i n v e s ~ e non
the client side parameters like: which search engine to use, what keywords will give the
best search results and which Web pages contain the information required? ~ ~ e ~ ~
broken links, which are connections b e ~ e e nWeb sites where the target site has been
removed, f r a ~ e n t a t i o nand repetitive or duplicated contents will reduce the usabi~~ty.
Increasing Internet usability is the ultimate objective for many commercial users.
Therefore, keeping a cooperative database of practical keywords, laces of interests and
bookmarks on an internal Web page will increase productivity and reduce Internet ~ u ~ n g .


~ ~ i e nUse
t ~for
~ ~c e s e u r ~ h e r s

Originally, in addition to the US military effort, universities created the Intemet to share
infQrmationon research p r o ~ a ~ eIns other
words, the I n t e ~ itself
e ~ has been a research
p r o ~ a m m ebetween universities in the USA. With the Internet in place, research p~ojects
can be continued where other research projects have stopped. This is p ~ i c u ~true
~ l for
open governmen~land ~ n i v ~projects,
s i ~ avoiding duplication of rese
private research projects are executed behind closed doors for economic
reasons although there are exceptions.
esearch software projects which are sponsored by universities or the public sector for
evelopment on the frontier of technology are often open source and accessible to
ch projects often benefit from the input of hundreds of con~ibutingp r o g r ~ e r s
from all over the world. One example of such a collective effort is the Linm operating
system, It has been ~ e v e ~ o p by
e d an countable number of c Q n ~ i b u tand
o ~ ~ a ~into
r ~ d
a very stable and reliable system. Most importantly, its source code is freely available on
the I n ~ e ~ e ~ .


Power System Restrur;turing and

The ~nternetis the ideal medium for publish~ngi n f o ~ a ~ i owithout

h a ~ n to
g pay high
rates to commercial publishers. Everybody with I n t e ~ eaccess
and Web space c
r e s e ~ c hresul~sor join newsgroups to exchange research ~ n f o ~ a t i o nA.
~ ~ a g i n a btopic
~ e is avai~ablewithin the never-ending lists of newsgroups. ~ e w s g r o ~ p s
allow researchers to publish and discuss their results with
c o ~ p e ~ eaudience.
Whenever research problems accme
be found in the Internet news~oups.Sc
query and collaborate with colleagues and access or share s o ~ a r eand
i n f o ~ ~ a t i omade
n available on remote machines across the I n t e ~ e t .


~ ~ u c u t ~Use

The Internet can be used to access information on schools, universities, scho~ars~ip9

~ n
by sharin
and others. It is able to improve inte~ctionsb e ~ e insti~tions
i n f o ~ a t i o nabout events, projects, timetables, resources and act~vities,wh~chmay pro
the usability of resources, such as sharing transportation or avoiding overcrowding in the
local s w i m m ~ gpool. The Internet can even help reduce the ~ ~ i costs
n gof schools, e,
ent to be bought in bulk and shared by several institution.
als can be made available to students on-line, which saves on material
costs, cannot be lost or left at home and allow students to get pr~pared.F ~ h e ~ o rthey
allow p ~ t e students
~ ~ a to
~ gather more detailed i n f o ~ a t i o nabout a course
up for it.
There are several on-line training courses avaiIable on the I n ~ e ~ eThey
t . allow people
who live in ~ e m o locations
to continue their education after leaving school. With the help
of an on-line tutor, which monitors the progress of students remotely, queries can be sent
and answer~dvia e-mail within minutes, On-line exam~ationsand o n - ~ i nmu~tip~e-choice
questions generally follow such studies, includ~ngthe publishing o f exam~nationres~lts.



Prior to ~ ~ i a ndecision
on which product to purchase, extensive i n f o ~ a t i o
fact sheets and general opinions can be analysed. The I n ~ e ~ ~e nt a ~ lusers
es t
product or component performance by being able to access dir
competing companies. Good starting points for obtaining lists of CO
on-line magazines, virtual ~xhibitionsor virtual shopping centxs.

usinesses can compete with on-line quotes for services and goods to a ~ c pto s ~ ~ b l e
cu~tomers.They can show detailed statistics on their busine5s p e r f o ~ a n c eto a ~ a c t
i n v ~ s ~ and
o r ~shareholders, ~usinesescan pu~lishi n f ~ ~ a t i oand
n co~~icate
via a secure Internet connection and firewalls to improve c o ~ u n ~ c a between
~ o n remote

of the Internet to Power System Monitoring and Trading

~ u l t i m ~ dmeans
the simui~neoususe of more than one medium. A single medium can
be text, image, video and sound. ~ ~ i ~ t i m edevices
are able to play music, animated
images, motion p i c ~ r e sand videos. But multimedia technology is not just about playing
multiple media, it also includes storing, transmitting and presenting information from
multiple sources. Uses for such technology include e n t e ~ i ~ e nvideo
t , conferencing,
video on demand (VOD), close circuit television (CCTV) and distance learning.
These are many different formats in which multimedia contents can be stored. The most
common ones found on the Internet are listed in Table 12.1.
2.1 Common multimedia types
Audio, Sound, Music

Movie, Video
Images, Photos

Extension (MIME type)


This list s ~ a r ~ s only

e s a fraction of available file types. There are many more file
types for images, sound or movies and new ones emerge constantly.
If the Internet browser receives a multimedia file, it identifies its contents by the
type, which is related to the file extension. Once the content i s identified, the browser
executes somVare to use the file as intended by the originator. In cases where the brow~er
does not include software for opening a file type, e.g. MOV (Windows
browser invokes a helper appl~cation,e.g. a movie player. For an unknown or
a browser plug-in or an external helper application may be required.
and ability of the Internet to distribute multimedia content, c
ed music and video occur. Without copy protection it is ve
convert music or video tracks into an Internet distributable format. But there are obvious
advan~gesfor selling music electronically over the Internet, e.g. no record c o ~ p no
~ y ~
i n t ~ ~ e d i a ~low
e s cost,
large audience and many more.

Internet on-line services such as Internet banking and account managing, s h o p p ~in~ ~
virtual hopp pin^ malls, live news and trading floors, just to name a few, have become very
popular. On-line shop~inghas become very popular for light goods (sma~lpos~agecost)
music, videos and books. Several large supermarket chains are trying to push
ping for food and groceries by introducing a fixed delivery fee and
delivery times. Such business is not time critical and can be accomplished
continuous connection to the Internet.
Time-c~ticalon-line services, such as trading floors, require a con~inuousconnection to
the In~ernetin order to follow and react to market changes. They can only be succes
the used IT infhstructure can handle real-time data transmissions and if cont~ngency
are in place in case of technical failure.

Power System Restructuring and ~ e r e ~ ~ a ~

Trading floors and on-line auctions are a very promising development on the Internet.
They allow multiple sources and end users to meet in a c o ~ o virtual
business without verbal c o ~ u n i c a t i o nor travelling.


for Professionals

~ e ~ e r e n c i ni gn f o ~ a t i o nplays an important part in many professions9 p a ~ i c u l ~ the

legal, medical, scientific, financial and information technology professions,
Internet was estabiished, these professions relied on an extensive amount of published
papers, e.g. books, journals and reports. The production and dis~butionof paper reports
can be expensive and slow, resulting in i n f o ~ a t i o nbeing unavailab~ewhen it is required
or only available to those who can afford it. Since the introduction of the Internet, such
i n f o ~ a t i o nis readily available to everybody. People who are ork king in a fast moving
e n v i r o ~ e n tsuch as the IT sector require flequeni updates. The I n t e ~ provid~s
medium in which updates can be made available to everybody quickly,and cheaply;
therefore, the latest technology and manuals can only be found on the Internet.
The Internet user can be hidher own doctor or lawyer. But there is a danger. Using the
~ ~ f o ~ a twithout
i o n the necessary experience can sometimes lead to wrong conclus~o~s.
This is especially true for self-analysis of illnesses. Some ~ n f o ~ a t i oon
n the Internet
should only be used for the purpose of improving i n f o ~ t i o nfor a specific group of
professionals. It might be useful to know which illness matches the symptoms but a
professiona~shou~dcompile the final conclusion.
business analysis solutions for the utility marke~laceprovide utilities
and e
n companies
~ with~large-scale sop~isticatedanalyses of their data and allow them
to extend access to these analyses to a larger number of users. As a result, users will have
-click access to energy and power plant data to s u p p o ~their energy ~ a d and
~ g
t management and for improved business decision-making capabilit~es.
for the power
Internet forums have been successfully used as an ~ n f o ~ t i osource
utility industry with regards to IT-related questions, such as the year 2000 (Y2K) issues.
There is a vast amount of power utility related data already available on the ~ n t e ~but
some of it is poorly organised and difficult to find. Energy i n f o ~ a t i o ncompanies a d ~ e s s
this shortfall because they specialise in the collection of information related to power utility
~ n ~ companies
e ~ e ~
have created virtual conference room, where visitors can review
case studies, survey results, white papers, reports and studies, meet with staff consul~nts,
and p a ~ c i p a t ein an on-line survey.


The Power Industry and the Infernet

Can the Internet really stand up to its promise to increase productivity and p r o ~ ~ ~ i and
ost for the power industry?
is not much evidence to support this s ~ ~ m e nbut
t 9with
connection ownership, this will change in the near future,
to increase productivity by using the Internet to find the right ~ ~ ~ o ~easily
a t ~ando n
quickly and to attract ~otentialclients to ~ommercia~
Web pages to in~rease~ r o f i ~ b ~ l i ~ .

of the Internet to Power System

nitoring and Trading


~ f ~ c i eWeb
n t page desi should start from the need of the clients (the c o r n
find the ~ f o ~ a t i or
o nproducts they require ( i n ~ e ~ e d i acontent)
and move to t
(e-commerce tool). Making money via e-commerce requires the
real business on-line. ~ ~ c r e a s ~ n
1 barrier to purchase goods on-line, is one of the
than just i n d u s ~news. It
ices tailored specifically to the power
i n f o ~ a t i o nto the average I ~ t e ~ e t
to satisfy a need, or to solve a problem. For example, low
optimis~ngthe c o ~ b u s t ~ oprocess
or reducing shipment delivery tim
shipload c a p a c i ~using other Web sites.
~ n c r e a s e~~a f f i cto ~ e pages
b will increase its p o ~ u and
~ at h ~ e ~f o r eits value. To
t visitors, the Web page should contain added conte
increase the rate of rec
Web sites should provide easy access to e ~ e c ~ i cia l
erspec~ive.~ o w e rin
~ i s ~ b u t Qcon~ac~ors,
r e s ~ ~ c for
e s mmu
er electrical industry ~ ~ o f e s s i o ~ a l s .
s the ~ n t e ~ can
e t support the core c o ~ p e t i
rgy-trading p l a ~ can
~ obe~ designe~to receive
and use these biddoffers to sched
to the ark et inch
resources locally, A d ~ i t i o ~~anl c t i o n provided

data, s e ~ l e ~ e nbilling
and p ~ b l i ~ h iof~ gpricing and trading i ~ f o ~ ~ t i o n
i ~ f o ~ ~portal.
t ~ o Such
n a platform can be designed to give market ~ a r t i c i F ~ ~ t
to access the m ~ k e24
t hours a day, seven days a week.
~ t i l i ~ ies are developing e l e c ~ o n ~ c
Internet. In
illing will reduce the utility CO
on-~ines e ~ i c efor r ~ s ~ d e n t ~ a ~
and their ~ s w e r Qs
utility c ~ m p a n and
~ ~ s1
les, This will allow po
offer a c ~ ~ n ~ cst o r
s ~ ~ t c Qe ~ e~c t ~
i t
ing l n t e ~ etechno~ogy
iders (ASPS). The idea is to provide so
is instalIed on a rem
ter with ~ n ~ e access.
~ e t This avoids the probl
and ~aintainedor u p ~ a ~ e d
ess to expensive and highly speci
the standby time and cost of
, for ~ a i n i n g~ u ~ o s can
e s be lea
I" of people a ~ e n ~ This
~ g is. one


Recent ~ ~ p r o v e m eon
n t the
~ Internet

Since the computer ~ a n u f a c ~ r i nindustry

and the Internet are ~irectlyrelated, faster and
cheaper computers will constantly cause expansion of the Internet networ~.This, in itself,
is a positive deve~opmen~
as long as the transpo~tionnetwork is at least expa~dedat the
same rate. Therefore, a constant improve men^ of the Infernet i n f r ~ s t ~ cis~ nr e c e s s a ~to
ensure a continuous quality of service.
With more and more users using and publishing information on the Internet, more and
more information becomes available. It is c e ~ a i n ~not
y the case that every Web site on the
Internet on a specific topic contains valuable i n f o ~ a ~ i o nometimes
i n f o ~ a ~ i oisn
or even wrong. This makes it sometimes difficult to find quality contenf for
serious researchers without wasting time visiting ~ i ~ e r eWeb
n t sites con~ainingeffec~ively
similar information. ~~)nsequently~
the more iiifo~ationthere is on the lnterner the more
diluted the quality of content on a common topic and the more difficult it becomes to find
quality content. But the Internet is constantly i~provingits search engine$, which are now
using iiifomiafiorr-refiningprocesses with artificial intelligence (AI).
The processing power of PCs has been doubling almost every two to three years and
with the new generation of niultimedia extended processors (MMX), Web p
include images, sound or video clips. This development has increased the
Internet sur-fig, sometinies caused just by the graphicai design and ~ n c ~ i o n a ~ i ~
( i n ~ e r a c ~ i vand
i ~ )nOQ the content of a Web site. People visiting interactive ~ e sites
b can
interact with their contents for fun or for business ~ ~ ~ o sThe
e sInt
improved the appearance and i n t e r a c ~ ~of
v iWeb
~ sites and has cre
ortant issue su~oundingthe Inte et. A system w h i c ~is not
us business. When the I ~ t e WRS
~ ee ~
s ~ a b ~ i s hsee~~, u rwas
rs did not intend to use it fo
esses started to e m e r ~ eon
need for securily arose. There are several reasons why h
c o ~ p u t eSome
~ . o f the most common ones are clienl/se
A simple securi~y-rel~ted
bug in browsers can allow
~ n f o ~ a t i oWith
n . the latest 128 bit en
rotocol, hackers will have at least
ion, ifit is within their ab~~ity.
the Int~rnetwhile on the move is one o f th
~~ o ~ra bhand-~eld
. d e v ~ such
~ ~ as
w r i s ~ ~ ~are
c ~c ue ~s e n t ~available
for accessing the ~ n t e ~ ~ ~ .

Currently, the PC is still the most common way to access the K ~ t ~ ~ e ~ .

few years, Internet access will be drama~icallyincre
TV set-top boxes, game consoles or video teleph
~ n ~browser
~ ~ ene tling I n t e ~ eaccess
at any location.
WAP or ~ ~ ~ e r r i e t - e n~elephone$
~ b l e ~ are cu ntly being pushed as a
far, there is still a lot of convincing and iiii~roveme~~ts
to be done until WAP phones will

~ p ~ l i c ~ toE
i othe
n Internet to Power System

onitoring and Trading

take a s e ~ om~asr ~ eshare.

They suffer from b ~ d w i d t hres~ictionsand small dis
Pal~topsin c o n ~ a slook
quite promis~n~,
since thek display is reasonabIy
idth restrictions. C ~ ~ e n t l~y , A phones
and palmto
Ie to mobile phone text ~ e s s a g i n ~ ~
omising technologies for accessing the ~ n t e ~ine the
t ~~e are
as Internet display units, if connected to the ~ n t e ~via
e t a teleph
c o ~ ~ c t et-top
i o ~ b ~ will~ sit eb e ~~e e nthe TV and e teiep~onec o ~ e c t i o nand will
eliver services s ~ ascdig~ TV or video on demand.
game consoles in the late 1990s, game consoles are a ~ o ~ ~ e r
e T~ternet.They need to be equipped with a s ~ ~teci l ~
require a telephone c o ~ e c t i o n Already
et connection from game consoles for
offer full Internet browsing.
already have a display,
ted to a ~ e l e ~ line
~ o and
~ e
keyboards and the abWy to
ady. They also have
l o ~ a t of
far the costs of o ~ e r s h arid
lds (e.g. in fridge doors) have
se to some

Access. to the ~ ~ t e r ~ e ~

Access to the ~ n ~ e ~ n ~ t


or s~all/medi~m"size
connection to an ISP.
a ~ ~ e stos ,the ~ n t ~ ~ e
f a fast connect~onwith all i t s us
ternet, making it the ~
~ or middle

-8. The Internet as a three-tier connection

Power System ~


e and ~ e r e ~~l a t i o n

The Internet is building on a client-server rela~ionship model, where the clients

Internet browser connects to an Internet Web server. For the browser to
an operating ystem or platform needs to be ins~al~ed
on the clients PG.
to Web servers. Operating platforms supply the basic structure of the computer
environ~entsuch as convenient access to all p e ~ p h edevices
installed on the computer.
mile it is possible to create an Internet browser for a specific computer hardware layout,
the m ~ ~ of~ computer
~ d ehardware combinations would require a browser for every
possible option, Therefore computer software is generally written for operasing systems.
The most comMo~o~eratingsystems for client n i a c h ~ e sare icrosofts Windows, Linux
and Apple ~ a c ~ n t o s hMacOs.
The more applications these are available for any platform,
the more popular this latform becomes, Therefore, most home or o ~ i c e - ~ a computers
will have one of the ~reviouslymentioned operating systems.
servers have different criteria for choosing the ~ l ~ t onf which
o ~ they reside.
ad applica~~on
support is necessary or home and office CO
r e l ~ ~ b iare
l i ~the major criteria for Web servers. O p e r ~ ~ i nplat
Solaris, W i n d o ~ sNT and Wewlett Packavd are focused on secure access res~ction$and
secure ~ e m management.
o ~
Access res~ctionsinco orate ~ ~ l ~ i - u scapabilities
nt levels of access, e.g. Web users cai only acces
g. Secure memory management incorporates
nt levels of memory access, e.g. every op
ning in its own address space and will not conflict with other pro~rams
system in case it crashes.
allow access
issue for Web servers is s e c u ~ i ~ , ile ~ e servers
ody, access res~ctionsapply to all other areas on the serv~rshard


Web Clients

client is a piece of software that is able to receive ~ f o ~ a t i for

o ndis
p u ~ o s e s Web
clients are used to access information pub~ishedon an Internet-enabled
Web server via a URL. Web clients do not exist in isolation since ey have to access a
server for i ~ f o ~ a tretrieval.
i o ~ They are part of the clie~t-serverMO 1, ~ h i c is
h in ~
12.2. The Internet utilised the clien~-servermodel because of

are 12.2 The client-servermodel

The most common Web clients used for displaying i n ~ o ~ ~ a ton

i o na c
browsers such as Internet Explorer or Netscape ~ ~ v i g a t oWeb
r , cl~entsfor

Application ofthe Internet to Power System Monitoring and Trading


o n can be found in Internet search engines. A Web client must be able to
understand the format of the remote i n f o ~ a t i o naccessed for successful p r o c ~ i n gIf,
. for
example, a Web site containing Chinese writing is accessed, the browser must have the
reqLiired fonts installed. If rcal- me data should be displayed in a Web client, the client has
to have the capabili~to receive data updates and display changes ~ ~ c o r d ~ n gThe
m u l t i ~ d eof data types and constantly emerging new technologies and standards forces
companies building such clients to release frequent updates. Users of Web clients should
always try to update client s o f ~ a r in
e order to access new Internet tecIino~ogies.


Web Sewers

Accessible UIpLs must be located on a dedicated Web server. Only Web servers which are
enabled for ~nternetaccess are accessible by the Internet user. Basically, a Web server is a
computer with Web server software such as Apache Web Server, Internet Information
Server (IIS), Personal Web Server (PWS) or any other Web server software. This software
allows other computers to connect to a specific port (normally port 80) and display the
contents via a Web browser.

Web Protocols

Web servers are able to understand several protocols. A protocol is a method computers
use to communicate with each other. There are several types of protocols. Different types
of protocols are required for different tasks, e.g. Web page access or file transfer,
The most common protocol used over the Internet is a combined protocol called
part is rcsponsible for the c o ~ u n i c a ~ i oand
n the IP part is required for
identi~cationof computers. In order to address uniquely any Web semer on the Internet, a
unique token is required. This has been realised with telephone numbers in mind.
Therefore, a Web server can be addressed by a set of numbers, the TP number. It can be
used in the browser as a hexadecimal, octal or decimal number. Its most common
appearance is decimal and it looks like this: 123.456.789.012.
Since such numbers are difficuit to remember, a more friendly way has been d ~ ~ c l o p e d ,
called a domain name. The domain name allows the use of friendly names such as
h ~ : / / ~ . w i l e y . c o instead
of Good domain names are limited and
most of them have already been occupied. Some of them are available on the t ark et for
bidding, which i s very similar to personalised car number plates. Recent court rulings have
tried to discourage domain name hogging by forcing individuals to release branded and
trademarked company domain names so that the companies can represent themselves on
the Internet without paying millions of dollars.


The Internet owes parts of its pop~~arity

to the e-mail system. E-mail i s an electronic
means of sending a message from one computer to another in an organised fashion. E-mail
services are offered by an ISP. Mail accounts can be created from ISP e-mail providers
such as CompuServe or AOL. E-mail is the fastest and cheapest way of sending messages

Power System Restructuring and ~ e r e g u l a t i o ~

to any location in the world. There are specific protocols for sending and receiving e-mail
messages. The protocol used to send e-mail messages across the ~ ~ t eis~~ he et ~ i m p ~ e
rotocol ( S ~ T ~The
) . protocol used to receive e-mail messag~sis the Post Office
versions of these protocols have been improved in robustness and
P2 or POP3.
If e-mail c o n ~ i n smore than just text, e.g. a ~ ~ c h m e n tanother
~ r o ~ o cisorequ~red.
llows do~nloadingor uploading of files on remote machines and is called
rotocol (FTP). It is a~~omatically
invoked if an ~ ~ a c h r n ei sncopied
to a
hard disk. If, for i ~ s t a n e ethe
~ graphics adapter driver software requires upda~ing,i.t is more
than likely that it is available on the Internet. Generally, there will be more than one
location, called FTP site, for ~ownload~ng.
The most used protocof for Web browsing is the ?TP.This protocol carries
~ n f o about
~ ~the~originator
~ ~ nof the i n f o ~ a t i o nand the information itself It is able to
tell the b r o ~ s e of
r which type (e.g. plain text or cQ~pressed)
and f o ~ a(e.g.
t ~ T ~JSP,
) the ~ n ~ o ~ isa so~ that
~ othen browser can play it correctly. Free ~ I i t e ~ e ~ - b aesed
mail sewices are available, e. g. from HotMail o


Internet Security

I n t ~ ~~eetc ~ r i is
t yn e c e s s a ~to protect cornpurer resources against the risks and threats
that arise as a result of a connection to the Internet.
esign of the Znte~etoriginated from the idea of cQnnec~ingcomputers b e ~ e e n
s etc. f i r com~unicationand owle edge-shar~ng purposes. There was no reason
for a n ~ ~ to
o consider
~ y
s~botagingthe connectio~~,
since only a selection of trustwo
people h
sical access to the computers connected to the I n t e ~ e t sharing

ation. Tilerefore, security issues were not part of the i n i t ~ a~~
Since more and more users have access to the Internet and its utilisation for business and
~ ~ ~~ansactions
c ~ a has
i grown, Internet security has become a r i m a ~concern. The
rcasons for ~xplQiting
or sabotaging the Internet are man~fold.
One of the major security concerns is caused by the fact that data is: transported as
text, allQwi~g
easy access for third parties. This risk is mos acceptable for non~en
nce the Z n ~ is~a ~ ~ t
ss these lines if avo
st option for se~sitived
afford a ~ o n ~ ~ n u ocable

home workers to have access to sensitive eompany data from any location. These
r e q u i r e ~ ~ ~have
n t s persuaded many companies to open up their private Intranet to connect
to the public Internet.
Protec~~nga private network and shielding it from h~ckers without restrictin
to remote users can be achieved with a firewall. A firewail
w r ~ ~ to
e ncombat unauthoris~access to files or uiider~y~no p e r ~ ~ ~
on the company policies, only selected services are granted access to the outside world.
Figure 12.3 shows how an Intranet can be protected with a firewall. Local computers are
able to connect to each other and to the Internet, but remote coinputers with Internet access

Power System R e s ~ ~ c ~ rand

i n ~g e r ~ ~ l a t i o n


recipient needs to receive the private key, which can be intercepted. Private key generators
produce only one key (A) for encryp~ionand decryption of data.

! Trans~ission

across the

I Internet

nusing a private
key ~

Data ~

The alternative is to use a private/public key pair. In this case, a message c

e n ~ ~ t with
e d the public key, but only d e c ~ t with
~ d the ~ ~ i v a key.
t e This allows
p u ~ l i s h i nthe
~ public key to many people, who are able to send ~ e s s a g e sback to the
e the publisher of the public key is the
hing the public key, the ~ e s s a g can
blic key, only the p ~ v a t ekey can dec
public and private key
lic key generators always pro
where A i s used for encryption and B for

Secret readable data

I ~rans~ission


across the

~ e c r y p t ~ owith
n private key

.5 Data encryption using a public and private key pair

result irm using less server re sour^^$ so t

age is l~adedfaster. Th
aved, e.g. the use of c
s ~ n t e r c h Format
~ g ~ (GIF). The GIB;
ir image ~ompressionratio. One of th

o p ~ balanc~
~ ~ aof ~image quality a

Application of the Internet to Power System Monitoring md Trading

Server 1

Server 2

Server 3

Network load balancing with three servers



software is ~ m p o ~ a nThe
t . answer is Java. Java has been develo~edwith the Internet in
mind. It is not exactly i n ~ e ~ r e t eordn o ~ - i n t e ~ r e t ebut
d ~s o ~ e w h e in
r ~the m i d ~ l e ~
because the source program code is compiled into byte-code,
process. Java byte-code is i n ~ e ~ r e by
~ eadJava Virtual Machin
p r o ~ e s s o r ~ s ~ien~si ~ c~ ~ i during
o n s run-time. This mechani
different platforms if an a p p r o p ~ J~ ~ e
g languages are enabling Web pages
are i ~ p foro on-line
~ ~ and re
~ntgractiveWeb pages are required if feedback from the Web user is relevant.


at Is ~ a v a S c r ~ ~ ?
a p r o ~ ~ i n i ~n ga n ~ a which
g e is exe
ages that provide a means of adding
As shown in Figure 12.9, JavaScrip

in the Web ~rowser.It is one of

age from a Web server, the browser inte~retsthe

code for page i n t e r a c t ~ v If,
~ ~for
list of products and ces, ~ a v a ~ c r i pcan
t keep track of the running of all
selected from the list. Such interact~vi~
cannot be accomplis~edwith basic
cript v e ~ s a t i i allows
Web pages to be created without
JavaScript does not necessarily need to be emb
eb pages in JavaSc~iptmight defeat the
ML pages by adding interactivity inste

nment for JavaScript applications

de in J a v a S c ~ is
~ tvery similar to writ in^ code for a Java
is how events for executing code sections are trigg
objects, e.g. a button, to trigger code, which might ~ ~ l ~ u laasubtot
d show the result in a ~ o p - u pmessage window.
whenever unknown p r o ~ a m m ~code
g is executed ca~tionmust be ta
Internet browser executes the JavaScript code in an encapsulated env~ronmen~~
access to system reso~rces,e.g. the hard disk. ~ h e o r e ~ ~ cita lshould
~ y be just as safe to

~ p ~ ~ i c aof~ the
i o 1n ; i t ~ ~toe Power

onitoring and Trading

as it is to execute applets. ut holes have been f o ~ ind some browsers

Java security ~ ~ p l e m e n ~ ~allowing
i Q n s cleverly written JavaScript code to access files with
own location and name. Nevertheless, the execution of Java code in
the Internet browser can be turned off when brows in^
JavaScript or an a ~ p ~ within
u n ~ s t e Web

opment p r o ~ a m i ~ i n1 g

creation of a Java source file, this file can be compiled into Java b ~ e - c o d evia a Java
compiler as shown in Figure 12.10.
ptain text Java instructions

Execution of bytecode in Java Virtual

Machine (JVM)


2.10 Java code com~iiat~oii

and execution

Java c Q ~ p i lcan
e ~ ~ o ~ l o a d from
e d the n ~ ~from
e tvcarious 1
numero~sc ~ ~ e r c Java
~ a ldevelop~entplatforms on the m ~ k e t swhich all
~ e v e l o ~ ~ ae n t
er ~ e b u g ~ ~than
n g n o n - c ~ ~ ~ e r cones.
i a l Since Java
icrosystems, it i s one of the most reliable sources for
tutorials, ~ o ~ ~ p i land
e r sother Java resources. It can be accessed via the
h ~ : /.jav/a.sun.
~ corn.
Java byte-code can be executed on any different computers. There
ing ~ a n ~ a Any
g ~ c. o ~ p u t e rwhich has a Java
le to execute java byte-code. This means that softwar
and compil~donce. This is a real advantage
~ s i ~ n ewritten
terms of dis~ibutionon the Internet.

E n v i r o ~ e nfor~ a Java ~pplication

Power System ~ ~ s t ~and

e ~ n g

of which have a

, thus ~ a ~ i itn safe

g to mn a p p ~ ~ ~ s
can p e r f o ~if it is live on the Ente
w h i it~was
~ ~ o ~ ~ ~ d .

~for ar Java
~ applet
~ ~

shows the e n v i r o ~ n

A p ~ l i c a ~ ~ofo the
n Internet to Power System Monitoring and Trading

access to c o n ~ ~ e n t i a ~

be seen as a web if lines ~ e p ~ e s e

ple who are pending time on th
noth he^^ are browsing or surfing the Web.

Power System ~ e s ~ ~and~ ~ i n g


all parts are combined into a single H L page. The static part can include
~eneral~ n ~ o ~ aand
~ i logos.
o n The dynamic part can be a table where data is q u e ~ e
a da~base,formatted and enclosed by ~~~L tags. Such dynam~ccreation of WT
can be achieved via a CGI or servlets. Therefore it is not unlikely that
initially being
d as a set of templates with the conten~sadded via
creation, ~ e n ~ r a t i o a dynamic Web page is illustrate

ases are the most used dat

ases are categorised
s are hiera~chical,relat
r e e f f ~ ~how
t s the
the data is stored and ~ e r e ~ othis
~ n c ~ i o ncan
s access the data. Examples of a hi
ata files as shown in Figure 12.14 [6,7].
~~t~ h i ~ ~ ~ c~ ~a i t caa ~~
a ~is stored
~ ~ , in a tr
data can be found near the root

~ b j ~ c t - o ~ i e n(00)
t e d ~ ~ t a b a scombine
of i n f o ~ a t i o ns ~ o r in
e ~the table. For ex
ction could be the calculation of moving averages.

g l ~ n g u a gGalled
~ ~ c ~ r e d
SQL is imple~ented
s t a n ~ ~said
d to be the
~ ~ t a ti si not
o ~ always guaranteed
~to a ~ ~a ofor
w ~ ~~ a ~spe
~r e s s

Application of the lnternet to o w a System Monitoring and Trading

.14 Most common database types

nce the SQL q ~ e r yhas been defined and coded, it needs to be sent to the
for execution. Database vendors have their own version and i r n ~ l e r n e ~ ~ t of
their database manager and query optimisers. Therefore, a common c r o s s - p l a ~ ~ o ~
database connectivity standard for Java has been introduced called Java database
connectivity (JDBC). JDBC drivers have been developed from JDBCs pred~ceor,
ODBC, and are available for almost every database. JDBC comes in different levels of
d a t ~ b ~ ac~essibili~.
For examp~e,Level 1 JDBC drivers a
C bridges for
databases where only an ODBC driver exists and Level 4
can access a
database directly and are generally written in pure Java.
When the database and the SQL application reside on the same computer, and no server
exists, the database model is called a two-tier model with the first tier being the ap~lica~ion
and the second tier the database as shown Figure 12.15 .

JDBC driver via LAN

Two-tier JDBC driver connection

Power System R ~ ~ ~ ~andc Deregulation

~ r i ~ g
If the database is located on a server the appiicat~onaccesses the database via server
software. Such server software can be accessed via an ordinary http request. IVcan be
written in any CGI executable language, e.g. Per1 or C*, or as a pure Java application, e.g.
servlets or EJBs).
soflware generally contains parts of the business logic of the database.
Business logic is, for example, pre-programmed SQL methods for accessing a database or
invoking transaction scripts as shown in Figure 12.16.
In most Web applications the third tier is to be regarded as the connection to the
database, since applications cannot be granted direct access to the database across the
Intemet for reasons of security. Therefore, whenever a database is accessed across the
Internet, an appropriate CGI, a servlet or EJBs must be coded. There are several software
companies creating off-the-shelf client-server software for data presentation for the client
and database access on the server.
........ Client ............................ ...............................

SQL queries sent to

servlet driver via WAN

Figure $2.16 Threetier JDBG driver connection


Web Pages with Functionaliiy

Web pages can include knctionality, e.g. collecting data typed in by users and its
validation using JavaScript or VBScript. DHTLM is a collective description of mixing the
of a scripting language with Web page interactivity.

~ p p l i ~ ~ tof
i othe
n Internet to Power System ~ o ~ ~ i t o rmd
i n gTrading


Web Pages with Integrated A

A new trend into leased ~p~lications

on the Internet can be noted. Many small CO
which c m o t altlford to develop an application on ltaeir own, have used
es for e ~ o ~ e rfor
c eshopp~ng
on the I n t e ~ eand
t trad

This section aims to give readers who are not Web developers a quick b a c ~ ~ r o u n
extended Markup Language (X ). XML is primarily used to define
atting i n f o ~ a ~ o n .
IS the most suppo~edf o ~ a t t i n gl a n ~ a g eby browsers on
lacks e x ~ ~ s i b i since
l i ~ , the tags which are used must be defined within the
the race began b e ~ e e nmajor Web browser m a n u f a c ~ r e ~style
, defin
~ n ~ Q d uasc ~a matter
of competitive advantage,
L weakness is that the tags are used for formatting and only little about
what the information is. XML can describe the stored i n f o ~ a t i o nclearly,

The s h o ~ c o m in
i ~H~ ~ haw accelerated the introduction of X L. One ofthe major
is that XML does not contain tags which relate to
if~erencesb e ~ e e nTITML and X
OCUmentS is assign
the f o r r n a ~ i ~ofg the data. The forrnatt
a constant format
data elements, represent~gspecific e
document. By i n ~ o d u c ~ nnew
g data e
entire ~ d u s ~ i are
e s able to interchange i n f o ~ a t i o nin a suitable format. Since
ocuments contain the data elements, a new type of document is re
ion about its repres~ntation.Such documents are called stylesbe
o nbe given later. Stylesheets can change the way X
i n ~ to be changed, only the stylesheet requires ~odificat~on,
browser, If the ~ o ~ a t tneeds
separat~ngthe maintenance between data and f o ~ a t t i n gor content and layout.


Reasons for

document i s accessed, a plain text editor can be used to access the data,
d y be able to readlwrite the files. Plain
a d v a n ~ gis~that in years to come e v e ~ b ~ will
files are pla~forrnand application independent. This means that it is not n ~ e s s to
a ~use
files have been created in order to read the ~ n f o ~ a t ~ o n .
conversion can be saved if data creation s
document file created in the 2980s word^^ or
2.0) 50 years later. This gives XML a truly universal and timeless data s
cr~ss-platforrndata ~ c ~ i v i and
n g com~atibi~i~y

Power System Restructuring and ~ ~ r e ~ u l a t i o ~


split by type of data and subsequen~lydisplayed depending on

meaning, This is because different parts of the data can be identified which enables
different applications to utilise it in different ways, e.g. searching or summarising. A data
element starts with a tag describing the meaning of the data, e.g. <NAME>, and ends with
a terminating tag, e.g. 4NAME>. XML data smctured in such a way is referred to as
being well farmed.
~ ~ ~f~ Q t~ ~a~a g : ~
data is presented in a hierarchical format. Hierarchical formats have the advantage of
faster drill-down for more specialised information or move-up for more generalised
information.One of the major disadvantages is that they suffer from data duplication.

XML data can be formatted for display by using a stylesheet. Stylesheets define how a
specific element is displayed, e.g. on a screen or printer. This enables the user to reuse the
XML data for different views or presentations by applying different stylesheets. As well as
displaying XML data, stylesheets can be used to convert XML data into different formats
such as LaTeX or PDF.

Inline ~ ~ ~ ~ t Q n g s ~
XML allows the inclusion of other files containing XML. This results in manageable
chunks of XML data. Files containing XML data chunks can then be included in one or
more XML documents, reducing the amount o f data duplication.
allows users to define a tag set of their own. Some rules with regards to its layout are
Iisted below:
L requires one Iarge container element, which encapsulates sub-elements.
All open tags must have a corresponding closing tag, e.g. <T-Il>GIHi>.
All sub-elements within a hierarchy must be closed in reverse order. Outer elements
containing sub-elements can only be closed if all sub-elements belong to the outer
element are closed, e.g. <H IxW2><H3></H3~2></H1>.
Attribute values for tags must be in quotes, e.g. <H1 colour="blue"></IT1>.
The same data can be formatted in different ways by introducing different ways of
represen~ingelements. Once the data has been generated in we~i-forma~ed
XML, it can be
reused by different industries.


Separation of Content and Layout

Information contained in static Web pages may change form time to time, challenging Web
page designers for fast and reliable update mechanisms. M a i n ~ i n ~ nthe
g fl~xibilityof static
Web pages is therefore one of the major design issues driving the in~oductionof new
strategies and technologies. HTML pages contain content and layout within one document.
Content is the information displayed on an HTML page; it can be in the form of pXain text,
tables, charts, graphics or others. Layout is the presentation of the HTML page; it is
embedded as HTML markup tags and is not explicitly displayed to the viewer since the
browser translates the inarkup tags into positioning information.

Application of the Internet to Power System Monitoring and Trading

Classic HTML pages contain both content and layout in the same file, causing
since common layout needs to be replicated for all pages if changes are needed.
For example, if % large company changes the layout of its Web pages a modification of
each Web page is required if they were written in static HTML markup l a n ~ a ~This
problem can be avoided if content and layout are separated. The t e c ~ o l used
o ~ for the
separation could be achieved with XML for content and extended Stylesheet Lan
(XSL) for layout. Figure 12.17 shows the relationship. Details on XSL will be given later.
By separating content from layout, Web design can be split among specialised teams
such as graphical experts, script programmers and site managers. This allows each
component to be reused and versioned, reducing maintenance complexity.

Content Repository

SQL query objects

SQL query objects

.I7 Rendering of XML data with an XSL stylesheet for NTML display

~ e p e n d on
~ gthe XSL stylesheet ou ut formats such as WebTV, WAP, PDF or others
could be c o n ~ c t ~Since
d . XSL stylesheets are in principle XML documents, they can be
converted by another XSL stylesheet into a new XSL stylesheet as shown in Figwe 12.18.

Change management system based on XSL stylesheets

Power System ~ e $ ~ ~ c t u r and

i n E~ e r ~ ~ l a t i ~ n


and XSL can be transfe~edbetween mul~ple~ l a ~ f o ~ s ,

ming languages. This protects the technology inves
stored in plain text and therefore always accessible. This m
proof and allows new ~ e r g ~ tne gc ~ ~ l Q g itoe srely on a simple but co~prehens~ve
~ a y Voa l~i ~ ~
a t i owith

e definition (DTD) file c o n t a ~ ~layout

validate XML to avoid invalid or inc
XML files require to be well formed so
d o c ~ e n contains
rules, with w ~ c an
order to pass a DT validation test. Such rvles con
parameter data types, andatory or optional tags or data.
u~ilisationcan assist error analysis within an XML dQcument.



se of a stylesheet is to display X L data in a format specified by the stylesheet.

allow the same XML data to be d i s p l a ~ e din diferentways. Since a data view
is d ~ p e n d e ~on
t which information about the data is requ~ed,s t y l ~ s h e eoffer
enormous flexibility not matched by RTML. If an HTML do
in table format, and a transposed view is required, a new HTML
creat~dand this will caus
ation of data. If the data is
documents need to be up
using a set of s
avoided. Regardless of which view is required by the us
o c u ~ e n tcQntaining the data. This ~ a n g e m e n toffeps
since only one data source is involved. If the user nee
n be used. One XML document can be f o ~ a in~many
e ~ different ways just
s of stylesheets, which can be used with the most common
browsers. The WOmost frequently used are cascading stylesheets ((3s
style 1ang~Iage(XSL). Stylesheets allow ~odificationof thousand^ of
concu~entlyand consistently, and this makes the r e d e s i ~of Web sites much simpl~r.

font styles to XML elements.

its a ~ i b u t e ssuch
as name, weight, sizes, f o r e g r o ~ dcolour, backg
~ ~ a g r a spacing,
and many more. CSS stylesheets were introduc
means o f extending the style properties of
L has a set of pre-defined eleme
t contains the same element n
will result which might not result in the

headings. If a CS

Application of the Internet to Power System

nitoring and Trading

have any pre-de~nedeie ents in a browser, will not e x ~ e r i e n cthese

SS gets its name from the fact, that the stylesheets can be cascaded. This m e ~ that
more than one stylesheet can be applied to a data source.

d o ~ u ~ eand
n t format it for the purpose of creating a static ~T~
on the Inkernet.

document for publi~hing

links to another document. This is acco~plish

define how individual parts of a d o c u ~ e n are
t h
,XSL or XLL documents.
L hy~erlinkswith the difference that
are more ~ e x ~ b ~ e .
ow a connection to entire documents
inks allow a more
ts, XLinks allow mu~ti-direct~ona~
the links allow running in more than one direction. They allow every element to become a
link not just pre-defined elements.
~ P o ~ t e allow
r s links to arbitrary positions in an XML document, a
re~erencing,footnotes, end notes, interlinked data, connections between
parts of remote documen~and other more complex document nav
d to link by reference rather than by exact location
g a series of reiationsh~~s
among information held in
allows ~iiipoin~ed
links to other XML documents. XLL links c
L since they allow for one-to"many, giving user more choice.

The increasing complexity of large electric power systems has resulted in a greater need for
~ ~ ~ n t e to
n ~ensure
c e a reliable supply of power. ~ o n d i t ~ o ~ - b a smain
e d ten^
d ~ ~ b u t on-line
HV condition ~ o n ~ ~ have
o ~ been
n g the current trend. In Non
with the construction of m internaeional irport, new power substations have been built to
meet the huge energy d e m a n ~The
~ capacity of the existing distributed mon~tor~ng
which is based on one-to-one ~ o ~ u n i c a ~was
i o considered
i n a ~ e ~ uand
~ t et~ereforea
completely new design concept was tried. The schematic block diagram of the new~y
developed system is shown in Figure 12.19.

Power System Restructuring and Deregulation



R ~ q u ~ r e m o~fnAirport
~ s Stibstation

An international airport, currently the largest in Southeast Asia, was constructed and was
opened in 1998, A number of electric power substations for the new terminal building and
associated i n ~ a s t ~ chave
~ r ebeen constructed. A detailed study into one of the numerous
substations revealed the shortfalls of the existing distributed on-line monitoring system
because the substation there had been too remote from the maintenance centres. The
engineers in charge of the transmission network in China Light & Power Company Ltd
(CLP) very often need to know not only the real-time status of power equipment but also
the security and fire safety of the substation. Furthermore, in consideration of a more
efficient operation of the system in the future, personnel in other organisations, such as the
Airport Authority, Fire Services Department and other operation and maintenance
departments within CLP, may need to gain access simultaneously to the important
information within the substation.
The original information system needed to be enhanced and extended to tackle the fire
safety and security requirements. Therefore, the idea of remote vision for substation
monitoring has been employed. This enabled engineers and relevant staff to sec on their
remote display monitors the real-time scene of the indoor environment of the substation at
different office locations or at home during standby duty. Intruders and fire outbreak in
terms of smoke emissions can be detected immediately. To allow simultaneous access to
information by all parties concerned, the old method of using modem-based peer-to-peer
communication has been abolished and replaced with an In~e~et-based

- Micro Controller

PC - Personal Computer

FigMr@12.19 The whole Internet-based monitoring system

- Capacitor

Application of the Internet to Power System ~ o n i ~ o and

~ nTrading

The substations, though having great impact on the integrity and normal
whole airport, are normally unmanned. Existing substations are equipped
panels that retrieve signals from smoke and heat detectors. False alarms are fr~quently
encountered and this leads to wasting resources as the fire services are only able to
discriminate them when they arrive at the remote sites, Illegal intruders must be
and prohibited from entering such substations at any time. To accomplish
mentioned above, a remote vision system was developed.

te V i $ ~ ~ n
V cameras are installed at different locations in e
Figure 12.20 shows the structural schematic diagram of the remote vision sys
is to cover all internal areas as completely as possible. For example, the eight locations of
the airport substations being monitored are the fire panel, control roam, 11 kV switchgear
room, 132 kV switchgear room, substation entrance, 132/11 kV transformer bay, cable
basement 1 and cable basement 2. Each camera is equipped with the functions o f
zooming and tilting. The video signal from each camera is wired back to a tai
remote control and multiplexing box. The on-site PC controls each box via the prhter
port. Through this box, the lighting contactors of the eight locations can be e
de-energised based on commands from a remote server. This is to ensure
~ l l ~ i n a t ~level
o n or each camera to grab a satisfactory real-time image of each location.
Via this box, the video signal of any one camera can be selected by an image ~ a b b e card
on a time-~ultiplex~ng
basis. F u ~ e ~ o r the
e , PC is c a ~ u n i c a t i ~with
g all o
microcontrollers in the existing distributed monitoring system. In addition, control si
for p a ~ i n gand tilting each camera can be output from the box. C o ~ u n i c a ~ i obetween
~ c e is accomplished by a modem.
the PC and the CLP m a i ~ t e ~ centre
On the sofhvare side, the on-site PC has two modes of operation, namely the re
mode and the real-time mode. The regular mode i s active during normal operation. The onsite PG s e q ~ ~ e n ~grabs
i a ~ ~images
from the eight cameras at a ~ ~ e ~ u e o
n c5yseconds per
The value of the average grey level can be used to assess the overall ~lluminat~o
of the site and the lighting system of the site can be switched on and off acc~rding~y.
average grey level of this updated image is further compared with that of the previous
image, which was grabbed and saved onto the hard disk 40 seconds ago. If t ~ e i~s ea
significant change in the average grey level, the two images cannot be compared d ~ e c t l y
and the system will regard it as an error and wait or another 40 seconds. ~ ~ e the ~
updated image is subtracted from the previous image so that any significant chan
nsidered significant, the on-site PC will first of a11 save the two
relevant images onto the hard disk for later reference and then inform the ma~ntenance
centre by producing an alarm at the server. On top of analysing the images, the on-site PC
saves the real-time images onto the hard disk at a frequency o f two sets per how.
There are two levels of operatian being selected by the server, namely the coarse level
and the fine level. Under the coarse level, images of size 320 pixels x 200 pixels are
transmitted, resulting in a transmission cycle of only 48 seconds for the eight images from
the eight respective cam er^. If the user finds anything unusual, the fine level can be

Power System Restructuring and

switched in, resulting in a transmission rate of around 35 seconds for each image of size
640 pixels x 400 pixels. The user is able to fix any camera on-line and p a ~ ~ i l ~ z othat
p a ~ ~ c u lca r~ e r aThe
. compression algorithm for these images is s ~ d ~ d
with the quality factor set at 15 o/o so that the file size of coarse-level
e-level images is around 30 kb. There are two f a c t o ~
~ a n s m i ~ s ~rate,
o n namely the quality factor and the speed o
quality factor is the optimal value based on experime
improvement is limited. If an ISDN link is provided from the s
the ~ansrnissionrate wilf be su~stan~ia~ly
This remote vision system requires neither spare contacts nor a d d ~ t ~ o n~ as~d u c e r sIt.
can be used to prevent theft as well, General ins~ectionof the s
such as c ~ e c k i ncleanliness
and quality of ~aintenancework.
Is can be grabbed as images so that the user at
ce centre can confirm. whether the
are false or genuin~
in the aetivat~$zone.
camera to see the existence of smoke
remote vision system can be used to monitor external contrac
necessary in the substation. ~ q u i p ~ ein
n th a ~ r d o u areas
or areas withou~
ce, such as confined spaces or equipment rooms with live conductor^, can
be monitored by this system. During major overhauling or fault h a n ~ l i n the
~, ~ a i n t e ~ ~ c e
~ a n a g e is
r able to visualise the equipment status through the ~ i s ~ mon
i n s ~ c t i o n to
s the site engineers, Site problems encountered can be effici
eration of the site staff and central management personnel.

Remote vision system

A p p ~ i ~ a ~ ofthe
i o n lnternet to Power System ~ o ~ i t o and
~ nTrading

smission of energy requires constant monitor

~ e ~ a n epower
n t supply. ~ o n i t o r ~ nofg such
occasions in which vital changes of important paramete
used to predict a po~entialproblem with the equipment. Such monito
sudden loss of sub-sta~ionequipment leading to unexpected power cuts.
uncharacteristic behaviour of one element in the supply chain can i
p e r f o ~ a n c eof other equipment or might even cause d ~ a g e This
is even worse if
sporadic m a l ~ c t ~ oofn one device leads to damage in another device. Such sporad~c
m a l ~ n c t ~ oofndevices can only be detected if continuous monitoring is practised.
heref fore constant monitoring of equipment will improve power system reliabil
reduce maintenance costs because devices can be replaced before they cause
tice, it is imposs~b~e
to monitor every unit since they are geograph~cal~~
~ u r t h e ~ o rite would
be too expensive to keep qualified personnel in remote
locations for 24 hours a day, 7 days a week. Therefore, remote monitoring of
e q u ~ ~ ~with
e n the
t help of c o ~ ~ u t ehas
r s been practised for some time. Com~uter$are the
perfect a l ~ e ~ a t i vtoe monitoring personnel since they are able to monitor constantly and
accurately, detecting even the smallest changes in critical parameters.
~omputerscan be placed at important points of a substation. The price of computer
hardware has been failing continuously for a number of years, making remote monitoring
with computers effective and economical viable. Most of the hardware
r e ~ ~ i r for
e d real-time data collect are well established and robust. Once the
connected and con~gured~
ers for each hardware component make i
access and control its ~ n c t ~ o n aonl ian
~ abstract level. Device drivers for disp
ling cards or other hardware, for example, are genera~lywritten in a low-level
programming language such as assemble^^ C or C3-i- to increase processing speed. Using
ing l a n ~ a g e will
s increase processing speed, since the
ked for a specific type of processor and o p e r a t ~ ~system.
dency plays an important role when it comes to deciding which
compoiients to buy. Not all companies can afford to update their device drivers in good
time if 8 new or changed processor or operating system is in~oduced.Exp
compon~ntssuch as U 0 sampling cards can be rendered useless if devic
atible with the latest processors and operating systems. Therefore
if h ~ d w a r ei s purchased in large numbers from a manufac~rer
record of a continuous supply of device drivers.
Once the ~onitoringco~puterscollect data, access to the data by users ~ u s be
gra~ted.Compu~erscan dis~ibutedata in many different ways. ~ a s i c a ~there
l ~ , are two
distinct network conste~la~ons.
LANs, where local computers are connected via a local
where remote ~ o m p u t e rare
~ connected by means of l o n g - d i s ~ c e
g access to substation data via the I n t e ~ e trequires an I n t e ~ e t
uters act as data collection points for a remote
power devices i s accomplished by sequen~ia~ly
converting their analogue signals into digital ~ n f o ~ a t i ovia
conve~ers.Such AIL) converters can be found on standard PC I/
s. The

Power System ~


~and ~ ~ r ~s ~ u l a t ~~ o

typical range of an A/D converter can be dJ2V or ASV, which requires a p p ~ o p ~ a t e

conversion of the analogue signal to match the A/D converters input range.
The AfD conversion sample frequency depends on how many data sources are
conv~rtedand on the required data accuracy. It can be quite low (4
data t r ~ s f o ~ a t i o are
n s planned. If, for example, spectral analysis or other data-intensive
~nsformationsare part of the overall monito~ngprocess, the s ~ p l i n gfrequency must
satisfjr the mathematical constraints of the ~ a n s f o ~ a t i oused.
In order to avoid loss of accuracy or injections of harmonics into the analogue signals,
NI) c o ~ v e should
~ e ~ be placed as close as ~ o s s i b ~toe the source. Once the ~ n a ~ o ~ e
signals are converted into digital info~ation,~ansmiss~on
will not cause loss of accuracy.
Figure 12.2 1 shows how substation components exchange data via a LAN.

re 12.21 Collection of data in a local PC

The raw data received via the LAN from the ~ i c r o c o n ~ o ~needs
~ e r sto be converted in
such a way that it can be sent to the ~ a i n t e n ~ centre.
It requires a f o ~ athat
t is e
extendable, in case new components are added to the monitoring requiremen~s,
received from different sources needs to carry add~~ional
information such as the name of
the source, Its location, date and time, scaling factors, units and many more. There are
different possibilities on how to encode this addi~ionalinformation. The most configurable
and extendable formatting standard, which is widely accepted, is XML. It is compatible
with all opera tin^ platforms since it is contained in a plain text file, for e x ~ p i e :
<Temperature Unit = Centigrade3 60 </Temperaturea
cPowerAngle Unit = Degree>
20 c/PowerAngle>
CPowerRating Unit = kVAr
200 c/PowerRating>

ADD~icationofrhe Internet to Power System onitoring and Trading

tation data has been collected and stored in local PCs, it needs to be published.
se o f the case study is to grant access to the substation data for all responsible
parties. Such parties may be the p e ~ o ~ofe the
l electricity and security CO
brigade or other remote experts and advisers. In order to publish i n f o ~ a t i o nover the
a Web server connected to the Internet is mandatory.
is study, there are several different ways of d i s ~ i b u ~ i nn~f ~ ~ a t on
i o the
Internet, such as:

Static Web ~ a ~with

e s a dynamic applet and data polling.
Static Web pages with a d ~ a m i applet
and data streaming.
s ~entionedprevious~yin brief, static Web pages are not really suitab~efor cons~ntly
require the data to be embedded within the document. If the
,the d o c u ~ e nneeds
to be changed r n ~ u a ~ erefo
~ y . fore, fast data
ented by static Web documents.
D ~ a ~Web
i c pages we one way of publishing changing data over the
a new static Web page is generated and ~ranmi~ed
takes place, Such g e ~ e ~ t i oofnWeb pages can be do
(CGI) and an executable program located in the Web
k of the CGI inte~faceis to instan~iatethe C
y the user. A p r ~ g used
r ~ for the CGI c
programming language ut must be compiled or i n t e ~ r e ~by
~ lthe
e server.
updatin~~ n f o ~ a ~ oi o the
n ~~~e~ i s s u i ~ for
b ~slow-chang~g
data suc
weekly events.

eb page

~ ~ n e r on
request by the
CGI clfthe

~ ~ c ~created
l i Web
y page via server CGI

pages me not limited to the CGI. They can be

S e ~ l e t sare w r i ~ e nin Java and executed on the Web server. They fbnct
in terms of r o b u s ~ e s
way to ~ ~ I ~ pro
~ aams~ but
e are
d e ore flexible and re~iab~e
If a Web page is generated d y n ~ i c a l l yon a server with ~ e q u e n data
every 10 m ~ u ~ ite is~ likely
that the client browser might display obsolete info
The ~ r ~ ~ l with
e r nserver-side- enerated Web pages is that the browser
b e c o ~ e sava~~able
on the server. ~rowsershave no

Powcr System Restructuring and Deregulation


if new data has become available on the server. ~ h e r e ~ ~the

r euser
, is r e ~ u i ~ etod~ ~ l the
o a ~
con~inuouslyby selecting the refresh or reload option in the
are even more options to generate dynamic Web pages. Internet ~ r o g ~ a ~ i n g
l ~ g u a g such
~ s as active server pages (ASP), s ~ r v side
e ~ i n c ~ ~ (d e~ S or
~ J) a v a ~ c ~ and

tic Web pages can contain a

e a ~ " data
~ ~update
~ e request via repea~~d
r e ~ u e to
s ~the
~ server ~

Application of the Intemet to Power System Monitoring and Trading

M Real-time
~ c
data updates via continuous connection to the server (data s~reaming~

The ~aintenanceoffice is connected to the remote power substations using a standard

connection, as shown in Figure 12.25. ~ependingon which ~arameters
are ~ o n i t o r ~ind the maintenance office, different data update ~e~hnologies
need to be
considered. In the case when all measurements taken from the appliances within the
substations are within their set tolerances, transmission of averaged n i e a s u r e ~ ~ ~might
be suf~icien~.
In case a fault QCCWS,
all measured and locally stored data from a defined
point could be transmitted. In order to receive continuous data transmission, data streaming
is requi~edfor fast real-time data updates.

~ u b s ~ ~ 1i o n

Substation 2

2.25 Connection between power substations and the maintenance office

If remote expert advice or an on-line reporting is required, data transmisions of real

measurements can be transmitted across the Intemet. There are several ways o f displaying
r e a ~ - t i ~data,
e e.g. as numerical values in an analogue or digital display or time series
graph, as shown in Fibare 12.26. At present, browsers do not have a built in ~ n c ~ ~ o n a l i
for supporting graphical representations of data. Therefore software extending the
browser's display capabilities must be used. Applets could use the browser's client area for

Power System R e s t ~ ~ ~and

r i~n~~r e ~ i a t i o n


drawing lines, shapes or colours. Such shapes offer the basic ~ n c t i o n a l ri e~ ~ u i r efor
controls capable for displaying real-time data.

igital Display

Analogue Display

Time Series

.26 Different controls to display real-time data

other impo~antaspect of working with applets is that they are able to connect back
to the server from which they were loaded to retrieve new data updates, regardless of
whether data polling or data streaming is used.
Dispiay~greal-time data in an applet is roughly a two-step process, as shown in Fi
The first step is to transmit the applet from the Web sewer to the browser.
step is to transmit data to the applet,


~ o n ~ ~ ~ ~ i n ~

A few examples will be given on the mo~~toring

of power station equip men^ such as
circuit breakers for the prevention of major faults and supply i n t e ~ ~ t i Q ~ s .
The SF, gas pressure measurement history over
d a circuit breaker (C
J a n 1996,
~ ~ was ~ ~ e s e n t efor
12.28. It can be seen that there has been a very serious SF, gas leakage problem with the
CB and the system was successful in giving a warning to the ~aintenanceteam on 17
December 1995. The gas topping exercise was compie~edon 18 December 1995 to avoid a
major failure ofthe CB.
A method was develope~to measure the travelling of
s based on looking at the
c ~ ewaveforms.
~ t
Figures 12.29 and 12.30 show the me
X 32 kV CB which is used to switch a 132 kV, 80
reactor. From the figures, it can be
seen that the closing time for the CB is 125 rns while the ~ippingtime is 50 ms.

Application of the Internet to Power System ~ o n i t o r i ~and

g Trading








Time Is

re 12.29 Current waveform for closing of reactor CB

Power ~ystem~

Time is
C u ~ e nwaveform
for tripping ofreactor C

be air c o ~ ~ r e os ~~e or a~~ time

i n ~ (Ton) and idlin
are sbown in ~
i 12.31.
~ If rToff ~is short, this
~ o r n air~ will
~ meet
~ ~the ~lower
e limit
~ very quickly

storage tank. As a result, prec

Air compressor odoff timing

~ andc ~ e~r ~n~ ~~a t i o n

Application of the Internet to Power System ~onitoringand Trading




Electricity deregulation is creating a free electricity market which is differen~from count^

to country. For each ~ e s t ~ c t uutility,
r e ~ the market operator provides the essential service
nction. Electricity ~radingin Europe will change ~ a m a ~ i c a ~asl ythe
wholesale and retail markets open up to competition. Competition between utility suppl~ers
will bring bene~tsto end users only if each competitor has the same access to ~nfo~nation
regard~ngpower pricing and distribu~ion,To keep the energy marke~lacec o ~ p e ~ i t iit~ e ,
d i s c r i ~ ~ n atransparent
and easily accessible for each compet~tor.
ng is not confined within a countrys borders. Many countries are
to ne~ghb~uring
countries so that a ~entralisedoperated
can have a key role [9]. That kind of power exchange will have to offer a re~iableand
efficient exchange information between the market participants by operating a r ~ ~ ~ a b l e ,
highly d~s~ributed
and low-cost informa~ionnetwork.
If the open energy market is to succeed, all participants must be wired into a s~andard
data exchange Infrastructure that must be platforni and language ~ndepen~ent.
the Internet, with its ~ l a t and
~ olanguage
independence, is the choice for h o s ~ on-line
wer traders require fast reaction to market changes. They nee to control their trades
across all current bids, offers and iiegotiations by means of a mouse-c~i~k
and r ~ ~ u irealre
time ~ a r ~ ien ft o ~ a t i o n ,including market depth as well as vital news
i n f o ~ ~ a ~ i Furtherxiore,
anonymity during negotiations and tools for t
analysis of marke~~ o n d i t i ~re the relevant ~e~uircments.
er exchange with its large nuinbers of v ~ ~ a b l rn
The complexity of the
of market trends
rediet. Therefore, pa~icipan~s
must be awa
eters to s u p p o decision
making in the daily offer~ngpro
xchange can s c h e d ~ ~
capacity to meet all requi~
ibe different kinds of auctions
natory and unifoK~auction system [lO]. An ideal power exchange
r e ~ u l a ~ ~and
o n reserve in ~ a ~ a lbased
l e ~ on auctions. The dispa~ched
is the capacity to maintain real-time
g r e s e ~ ei s the prov~sionthat can res
the market situation and follows
t pa~~cipants
have to ensure high p r o ~ t a b i l i ~

nd a clear re~at~onship
between the value of a
re, pa~icipantscan use an ageni with a specific be
and trading systems coal
services and new tools and technologies for controlling, ~cheduling~
~ l e c ~ i ~c ~i ~ ~ e fin~e~~igent
5 r e , agent tech~ologyhas been develo~
power arke et as described in Chapter 11. Complex distributed system
enefit the ~ ~ i t e r a c ~between
~ o n intelligent s
ng of electricity. ln~eiligent agents per
s in an on-line auction [ 131.
As mentioned previously, agents for buying or selling electric^^
r e ~ r e 5 e n t ~either
~ g generators or consumers. In order to use agents to


Power System R e s ~ c and

~ D
~ enr ~ ~~ l a t i o n

advantage, each agent needs to present a unique economic and strategic behaviour model.
These mode~s are based on human behaviour with respect to different tra
env~onments,For example, agents can show an ;anxious buying and selling behaviour,
greedy behaviour or relaxed behaviour to emulate market p~icipants.
There are several ~nte~et-based
simulation environments for exp
various power exchange mechanisms avaiIabIe on the Internet [ 141.
allow pa~icipantsfrom different locations to compete in the open market.
This is advan~geousfor the training of personnel, who are able to try different buying
and selling strategies under changing market conditions without causing interfkrence on a
real trading floor. With the help o f more advanced trading platform models, differen~
auction types, e.g. uniform price, single and doub~e-sided auctions, and di~erent
c o n s t r ~ i ~e.g.
~ ~transmission
losses, line capacity and stability limits and congestion
s i ~ ~ t i ocan
~ s be
, explored. The ultimate objective for each si~ulatjonwill always
maximi~eprofits from trading energy.

The first step in building a trading platform over the I n t e ~ e is

t to gain quality ~nternet
access with enough i and width to serve all clients at a ~easonablespe
Internet access cannot be achieved by telephone. It is necessary to rent or buy a dedicated
r with a reliable ISP, which offers a 24-hour, '?-day customer service.
nce a reliable Internet ~
~is es~blished,
~ s o ~ a r must
be pure
ing Web services, Currently, the most common Web servers are IIS
~ i ~ r o s o fApache
Web Server from Apache and Web Logic. There are many so~tware
co~panieso f f e ~ gcompetitive Web server so~utions, which can also integrate ecommerce packages.
ing a reliable trading platform across the Internet i not trivial. A ~ ~ r n a
must be to ensure data security and data ~ t c ~ t yata
. security across the
Internet has constantly been improved by the int~oductionof better and faster s e c ~ t y
algo~thrns.The most used and trusted method is secure sockets layer (SSL).
simple to i lement and does not require changes to any existix~
Data integrity can be achieved by buying a database fiom a major vendor. Such
may include startup consultancy and customer support. It is i m p o ~ to
~ tde
database in such a manner that the database ~ c ~will
r edeliver optima^ performance.
are sent to clients in XML format, conversions fkom table ~ o ~ a t
abase response times. eref fore, the choice of database layout
should match the d i s ~ b u ~ data
e d format if possible [ 151.
Figure 12.32 shows a simplified block diagram of a
between clients connected to a trading platform. On connection to the
L page conta~ningall the required fields to
n submission of a transaction, the Web s
tr~sactiondetails, which should be validated for c o ~ e c ~ e s ~
ase. If invalid data is contained in the ~ s a c t i o
changes will be rolled back to restore the da
suction servers can be purchased for keeping

Application of the Internet to Power System Monitoring and Trading

As with many real-time auction and trading platforms, data update are sent to the
ceivd data updates via XML allow faster data updates, since
n to the browser cIient area to avoid the generation of
pages. ~ u ~ e ~ omore
r e clients
can be s y n c ~ o n o u s ~~yp d a ~ because
small portions of XML data are sent across the Internet, saving precious b ~ d w ~ ~ t h .
It will take an entire p r o g r a ~ i n gteam to create a real-time auction platform from s
to finish. There are several s o ~ compa~ies
~ e offering complete solution pac
cornrn~rce and on-line auctions. I n t e ~ e t applications have different
r e q ~ i r e m cunknown
to desktop a~pficatians. ~ e q u ~ e m e such
~ t s as sc
c o n t i n u ~are
~ of great i r n ~ o ~ for
~ c~ e e applica~ions.
~ e b - b a s se o~ ~ a r e
for highly scalable products require a great knowledge of r n ~ ~ t ~ - t ~ e envir~nrnenzs
parallel process~ngarchitec~res.
Client Computer

time data via an


application of ~ ~ t e ~ e t ysaem ~onitoringand

is a very e
e examples have been
the benefits derived fr
e obvious.
er, it
can be seen that much work remains to be done. One area is system security in the openaccess e ~ v i r ~ n ~ e n t .

structuring and ~ e r e ~ l a t ~ ~ n

also like to thank E E E for

ission to r e p r o ~ ~ c

ymond ~ r e e i i rl n~t r~o ~ ~ c ~ itoo nthe I i i t @ ~for

e ~Eng~neer~,
Dynamics ~
T OReilly
s Teach Y o u ~ s e ~ 4~inT ~ L
1899, ~ e a c ~Press.

Chan, A.T.P. So and L.L

T r a ~ a c t i #on
~ sPower Sys
~ o ~ e e(If~thei Kn~ ~ ~~r n Q t i o n ~ l
~ # w @Techn~~og~es
2000, IEEE, April 2000, pp.47 1-475.
er Academic ishers hers^ 1999.
Sheblh, ~ h a 6:~Agent
~ ebased
~ Econo~ics,in
Power ~ y s ~~e~~s st ~ c ~and
r iEconomics
fl2] ~
~ Liu, Naili
~ Song, nSacques Law

n,~ New ~ e t h for

o ~ ~

access fees, 162, 165, 167

active reserves, 25

battery charging, 28
bid prices, 23,98, 176
bilateral con~acts,24,G 1,
5, 158, lG7, 168, 1
bilateral model, 96

black-start capabiIi~,93, 19

~ e n control
~ a ~s y s ~ e ~12
central utility model 52


autononiy, 355,356,359
a u ~ ~ " r ~ ~ l127,
o s 128

back-to-back thyristors, 269,273

~ ~ k eG8,78,85,
t ,

c o ~ p ~ ~ i t ixii,
o n ,1,2,4,5,8,9, 11, 15,



competitive ~idding,1,65
competitive framework, xi, 110,353
co~petitive~eneration,2,3,4, 107
competitive metering, 114
competitive trading, 24
compu~tionalintelli~ence,xxi, 353
condition mQnitoring,129, 132,295,
congestion manage men^, xiii, xxi, 58,
94,95,97,99, 104, 178, 180,
5, 198,200,209,215,216,
c o ~ ~ e s t i o~ n~ a n a g e ~markets,
e n t 93,94
contract market, ]I0,6 I, 68, 179
contract path allocation, 57

damper, 273,274
data pol~ing,45 1,452,454
data security, 458
data s ~ e ~ i n451,452,453,454
database, 136, 137,319,321,408,419,
420,437,438,439,440, 458
d a y - a ~ ~61,69,79,86
day-ahead market, 71,78,90, 176, 178,
delivery time, 86,421,423
ment, 1 IS
demand-side bidding, 68
deregulatiQn,xii, xi& xiv, xviii, xix, 1,2,
5,6,7,9, 10, 15, 19,45,48,50,52,
52,55,57,58,64,70, 71,73, 108,
111, 116, 119, 133, 140, 153, 161,
167, 171, 173, 175,202,217,218,
dere~latiomof energy market, 4 18
desalination plant, 38,49
discrete wavelet ~ a n s f Q338

dissolved gas analysis, 296,323,329

distrib~tedgen~ration,13, 16, 17,20,21,
22,23,25,26,46,48,99, 108, 144,
d i s ~ b ~ t gene~ation
distribution auto~atiQn,127, 128, 147,
co~panies,4,63,64, 110,
111, 113, 115, 116, 117, 119, 154,
distribution loss, 63
district heating, 21
d i s ~ r b ~reco~nition,
economic dispatch, 53,77,78,82, 109,
eddy currents, 325,326
elasticity, 59, 192, 195, 196,209, 215,
electrical d ~ s c h ~ g296,300
electricity and gas networks, 1 1 1
electricity dis~jbutionindustry, 111
electronic auction ~ a r k ~ t10
e-mail, 354,420,425,427,428,429
embeddedcost, 57,58,186,187,189,

embedded generators, 112

embedded systems, 128
emissions-free e l e c ~ c i 19
energy function, 206,385
energy mix, 6
energy policy, 16,48
energy purchase cost, 113
energy storage, 5, 13,259,2
nzglish auction, 55,56
equilibriu~point, 68,69,84,97,206,
ethernet, 348
e v o l u t ~ o n comp~tin
~ ~ Q l u t ipro
ex ante market, 61
ex post market, 6 1,73
excitation capacitance, 27,223, 32, 35
expert s y s t e ~ s353,355


fiber optic communication, 147
fiber-based ~ansmission,142
file types, 42 1
financial markets, 78,88,94,97, 171
financial ~ ~ s m i s s i rights,
o n 95
first rejected o~fer,55
flexible AC transmission system, 162
flicker, 266,33 1,342,346,347,352
f o r c e - c o ~ u ~ t converters,
forward markets, 71,86,95, 106, 178,
fossil fuel, 3,4, 6,45,53
Fourier transform, 336,347
free space lasers, 141
fuel cells, 10, 12, 13,20,2li, 26,99,330
hll graphics in~er~ace,
~ ~ rmarket,
e s 8,68,74, I0
fuzzy diagnosis, 323,325, 328
fuzzy logic, 38,49,341,412
g a ~ i n g50,78,
gas industry, 165
gas turbine technolog~,173
generation companie, 22,67,72,73,
eneration mix, 11
genetic algorithm, xix, 49, 360, 362,
GIF image, 421
g a v e ~ e n~nte~ention,
graph theory, 246,25 1
green c ~ ~ i ~ c a 17
green energy, 20


harmonic distortion, I3,26,331,346,

harmonic instabilities, 34
head-rnounted displays, 3
hedging, 65,95,360
hedging contracts, 65
hidden nodes, 384,386,388,3
hot spats, 297,400,407,410
hour-ahead market, 158, 176, 178
HVDC, xvii, 73,260,263,264,266,
hybrid agent, 355,358,359
hydro, 3,5,6, 12, 13,20,68,72,73,
IGBT, 262,263,264,269,278,280
immersion, 395,396,397,400,405
incipient faults, 29(j9323,329
incremental cost, 53,57,83,84,85, 88,
90,91,92,99, 196
incremental cost allocation, 57
Independent Power Pro~ucers,
independent system operator, 2
104,121, 175,217
inelastic load, 65,92
inequality cons~aints,198,21I, 212,
i n f o ~ a t i o nt e c ~ o l o2,54,59
infrared detectors, 297,401
infrared irnager, 400
i n ~ s ~ e~ ~l ~r nei n1g ,
installed capacity, 22,25
223,23 1 266
intelligent electronic devices, 139
interface agents, 355,356,357,358
inte~ationalf i n ~ c i n ga~encies,124
I n t e ~ e txiv,
, xvii, xix, 1 14, 1 18, 140,
141, 143, 144, 145,358,416,

auction, 55,56,60,61,65,67, 82,84,
90,91,95,96,98, 105, 108, 109,



193,194, 195,362,413,457,
43 1
~ d u ~ a ~143,354,399,420

ricing, 23, 57, 99, I

~ 65,71,85,
~ 87,t89,90,

~ a r k ~anspar~ncy,
~ e g a w mile
a ~ al~ocation,57

~ o n g ~ s ~ i88

mother wavelet, 337,338,

mutation, 40,41,372, 373, 375, 376,


159, 160, 162

~ a ~ g i costs,
n a ~ 3, 53, 58,210,240,242

nodal p r i ~ i 59,73,88,
166, 167, 187,


~ ~ o ~ - d i s c r i m i nauction,
a t o ~ 55
n o n ~ ~ ~ ~s ye srt ~s ~~397
s ,~ e


power pool, 4,22,82,86,87,%3, 100,

power quality, xiv, 21,25, 2179 127,


ly, 116,117, 119,1




markets, 78, 86
r e ~ e s s anafysis,
~ ~ n 116
latory body, 110,33
r ~ ~ l aincentives,
t o ~ 293
r e l i a b i ~benefit,
189, 190

sation, 260,261,271,272,
service ~rovider,xiii, 111, 156, 162,
163, 164,170,288,289
se~ement,55,63,69,71,79, 177,
shadow prices, 96

units, 127, 129, 132

s i m ~ ~ ~electricity
e o ~ s market, 87
single-p~aseloads, 27,46
smart agents, 355
smart m e t e ~ ~61
social welfare, 54,8
sment, xiii, 115, 117, 125,316
solar collectors, 38

rew wall, 428,429

~ ~ s w o429
r ~ ,

y s t e ~ y n a ~ ~xxi,
c s 80,
, 101


system marginal price, 23,

system opera to^, xiv, 51,53,56,59,60,
61,65,69,73, 103, 115, 120, 121,
139, 154, 157, 158, 166, 168, 177,
system-wide blacko~ts,155

UHFradio, 144, 149, 150

~ b u n ~ ~ ixii,
n g50,
, 52,53,73, 1
uncons~inedschedule, 65
unified power flow controller, 275,33 1

telecommunicat~on~ n d u s153,
~ , 154
telephone n e ~ o r k 1, 14
thermal heating t e c ~ o l o37
thermal limit, 58,59,66,259, 283
~ h e ~ o g ~400,410,415
therrnovision cameras, 297
thyristor cQn~olled
reactors, 266
t h ~ scontrolled
~ r
series capacitor, 271,
tier supplier, 1 12
time of use, 135,190
tournament scheme, 377
t r ~ s i e nenergy
margin, 206
t r ~ s i e nst t a b i ~ ixvii,
~ , xx, 139,206,
~ ~ n s m i s s i oaccess,
xvii, 5 1, 175, 184,
191, 197,200,216
transmission channels, 1
~ ~ s ~ s scharge,
i o n 58,90,95, 165,
transmission loss, xiii, 57,60,65,72,
105, 120, 165, 186, 191, 192, 196,
197, 198,204,214,247,257,373,
tr~nsmissionmodel, 8
tr~smissionopen access, xiii, 2 16,37P
transmission pricing, xxi, 58, 105, 168,
169,187, 191,218,221,246
~ ~ s r n i s s i protocol,
FTP 428

UNIX, 136,426
uplift charge, 55
usage charges, 162,16
use of system charges, 27, 72, f 11, li 15

mission revenue, 162, 16

transmission system expansion, 162,
two-tier system, 120

valley load time, 241

vertically integrated, 8, 50,58,64,72,
vertically integrated utilities, 77, 153
virtual e n v i r o ~ e n395
visual display unit, 395
voice activated messages, 1I
voltage collapse, 140,260
voltage control, X4,26,80,93,1
voltage dip, 117,333,350
voltage sags, 13,331, 332,334,335,
voltage source converter, 280
v o l u n t ~system operator model, 158,

WAN, 134,139,358,431,
wavelet transform, 336,337,339,350


static, 417,433,437,
Web server, 426,427,4
web space, 420,437
website, 75, 114


LPE ca~ies,3 13
ay, 59, 178, 198, 199,
3, 14, 17,20,21,22,26,
45,49,53, 147,259,280,330,349

zonal price, 71, 166, 167, i!

ricing, 90, 166, 167, 18