Copyright Q 2001 by John Wiley & Sons Ltd

Daffins Lane, Chichester,

West Sussex, PO 19 IUD, England

National 012.43 779777

Lntmabonal (+44) 1243 779777

e-mail (for orders and customer sewicc enquines): cs-booh@wiley.co.uk

Rzprmted April 2002

Visit our Home Page on http:/h.wiley.co.uk

or
http:/lwv.wiley.com
All Rights Reserved. No part of this publication may be reproduced, stored in a rettieval systern, or
hdnsmitted, in any form or by my means, etectxonic,niechariical, photocopyng, recording, scmrnng or
otheMise, except under the terms of the Copyright Designs and Patents Act 1988 or under the tenns of a
licence tssiied by the Copyright Licensing Agency, 90 Totienhirm Court Road, London, WlP 9HE, UK,
without the permission in writing of the Publisher, with the exception of any material supplied
specifically for the purpose of being entered and executed on a computer system, for exclusive use by the
purchaser of the publication.

Neither the nuthors nor John Wiley & Sons Ltd accept any responsibility OT liability for loss or damage
occasioned to any person or property though using the material, instructions, methods or ideas
contained herein, or acting or r&iuning from acting as a result of such use. The authors and Publisher
expressly disclaim all implied warranties, including merchantabilityof fitness for any particular purpose.

Designations used by companies to distinguish theu products arc often claimed as aadetnarks. In all
instances where John Wiley & Sons is aware of a claim, the product names appear in initial capital 01
capital letters, Readers, however, should contact the appropriate companies for more complete
informationregarding trademarks and registration.

Other W h y Editorial Ofices

John Wiley & Sons, Inc ,605 Thwd Avenue,

New York, NY 10158-0U12,USA

Wiley-VCH Verlag GmbH

Pappelalloe 3, D-69469 Weinheim, G m y

Jacdranda Wiley Ltd, 33 Park Road, Milton,

Queensland 4064, Australia

John Wiley & Sons (Canada} Ltd, 22 Worcester Road

Rexdale, Ontario, M9W lLI, Canadta

John Wiley & Sons (Am) Pte Ltd, 2 Clement1 Loop #02-01,
Jin Xing Distnpark, Singapore 129809

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

i~~on
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. Elcch’ic
Utilities Deregulation. 4. Elecmc utilities . Technological innovation%1. Lai, h i Lei
~

TK1007. P68.2001
333.793’2- dc21 2001045404

Pu~li~aCion
British Libraty C Q t a l o ~ uin~ ~ g Dafa

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
 ............................................................................................................................. xv
reface ............................................................................................................................... 5

e~~~............................................................................................................ xxi

.................................................................................................................
ent ..........................................................
............. 1
1.2 Competitive Market for Generation ............. .................................................. 2
1.3 The Advantages of Competitive Generation ..................................................
1.4 The Role of the Existing Power lndustry ............. ....................... 4
1.4.1 Reconfiguring the Electricity System. ............................................
1.4.2 Trends in Conventional Electricity G
1.5 Electricity Demand Operation and Reliability .............................................
1.5.1 Power Plant Operation ..................................
1.5.2 Reliability Assessment ...................................................... 7
1.5.3 Availability of Fuel .......................................

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

1,6.5 Solar.....................................................

.................................................................... 17
1.9.1 Capital Costs for New Plants ........................

..............................

................................................. 25

1.10.4 Coimectioii and Use of System Charges .

1.11.1 Introduction ..........

vi Contents

1. I J .2 Circuit Connection and P

1.11.3 Performance Analysis.....
1.11.4 Solution Technique.........
1.1 1.5 Results and Discussion ...........................
1.1 1.6 S i ~ p l i ~ Phase-balanci
ed
1 .11.7 Appendix ......................... .....................................................
1.12 Case Study 2: Controlling a S
1.12.1
1.12.2 The Solar Power Plant .................................................................................. 38
1.12.3 Control Structure of the Plant ....... ................................
1 A2.4 CA Formulation............................................................................................ 40
1 .12.5 Experimental Results ........... .................................................................. 42
1 .I3 Conclusions ........................................................................
1.14 References ...... ............................................................... ......................... 46
l a ~ ~ oofnE ~ ~ c~~ ~~ ~i c~ i t ~ e s ....................................................................................
2.1 Introduction ............................ .......................... 50
2.2 Traditional Central Utility MO
2.3 Reform Motivations...................... ...................
2.4 Separation of Ownership and
2.4.1 Central Dispatch Versus
2.5 Competition and Direct Access in the Electricity Market.................................... 54
2.5.1 Competition in the Energy Market ..... .............................................. 54
2.5.2 Competition and Auction Mechanism .....................................
2.5.3 Direct A c c e s s ~ ~..e e ~ ~ ~ ~
2.6 Independent System Operator .............................................................................. 60
2.6. I Pricing and Market Clearing .................... 61
2.6.2 Risk Taking.............
2.7 Retail Electric Providers.,. ............................................................ 63
2.8 Different Experiences........................................................
2.8.1 England and Wales .......... ........................................................ 64
2.8.2 Norway ...................
2.8.3 California................ ........................................ 71
2.8.4 Scotland .....................................................................
2.8.5 New Zealand........... ........................................ 72
2.8.6 The European Union and Gennany .............................................................. 73
2.9 ...................................... ............................. 74
3 CO a ~ ~ .................................................................
e ~ ~ 76
3.1 Introdtiction ................................................................. .................................. 76
3.2 The Independent System Operator ................... ............................................. 79
3.3 Wholesale Electricity Market Characteristics............ .................... 80
3.3.1 Small Test System ............ .......................................... 81
3.3.2 ............................................... .................... 82
Contents vii

3.3.3 Bidding ..................................................................... ........................... 83

3.3.4 Market Clearing and Pricing ........ ............................................
3.3.5 Market Timing ...........................................
3.3.6 Sequential and Simultaneous Markets ...............................................
3.3.7 Bilateral Trading............................................... .............................. 89
3.3.8 Scheduling..................

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

.................................................... 97

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

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

4.2. I Competition in Supply..

4.2.4 Key Issues €or Distribution Businesses ..................

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

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

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

4.3.5 Network Planning Tools............................................................................. 124

4.3.6 Asset Replacement Planning ................... . 125
4.3.7 Risk Assessment ......................................................................................... 125
4.3.8 Skills and Resources ................................. .......... 125
4.3.9 Neiwork Design ....... ............................................................................. 126
4.3.10 ~ i s ~ ~ on ~Automation
u t i .......................................................
viii Contents

4.3.1 1 Automation Case Study .Remote Control in London Electricity ............. 129
4.4 Future Devclopmeiit ..............................
4.5 Appendix: Distribution Automation i
4.5. I Introduction ................................
4.5.2 Remote Terminal Units ..................................................
4.5.3 SCADA Master Station . ....................................................................... 134
4.5.4 S o h a r e Functionality .................................... .... 136
4.5.5 Operations and Maintenance (O&M)......................................................... 136
4.5.6 System Integration, Design and Management................... ............... 137
4S.l Coi~~inunication Systems . ............................................................ 140
4.6 References ...............................................................
....................................................1
5.1 Introduction ........................................................................................................ 153
5.2 Role of the TP ....... ................................................. 155
5.2.1
5.2.2
5.2.3
5.3 New Market Organisation .
5.3.1
5.3.2 Priority Insurance Scheme........................................................
5.3.3 Transmission Expansion ........................... 169
5.4 Conclusions ........................................................................................................ 170
5.5 References .............................................. .................... 171
pen Access ..............................................................*..........= ................
17
6.1 Introduction ....................................................................
6.1.1 The Traditional Power Industry
6.1.2 Motivations for Restructuring the Power Industry..
6.1.3 Unbundling Cencration, Transmission and Distribution ........................... 174
6.2 Components of Restructured Systems........................................ ...... 175
6.2.1 Gencos ................................. ............ ..................................... 175
6.2.2 BOT Plant Operators and Contracted IPPs .. 175
6.2.3 Discos and Retailers ..................................................... 175
6.2.4
6.2.5 Independent System .................................................... 176
6.2.4 Power Exchange (P
6.2.7 .................................................... 176
6.3 PX and ISO: Functio
6.3.1 .................................... 176
6.3.2 California Power Exchange ...........................................
6.3.3 IS0 Functions and Responsibil~ties........... ..................................... 178
6.3.4 Classification of IS0 types .....................................................
6.4 Trading A~angements ................................ .......................... 183
 6.4. I The Pool ....................... .........................................
6.4.2 .......................... 184
6.4.3 ulti 1atera1 Trades .........
6.5 T r ~ s ~ i s s i Pricing
on in .......................... 186
6.5.1
6.5.2 olled-in Pricing Methods .............. ......................... 187
6.5.3
6.5.4
6.5.5
6.6
6.6.1
6.6.2
6.6.3 System Control ...............
6.6.4 hicillary Sewice Provision.............................................
6.7 Congestion ~ a n a g e ~ eii?n Open-access
t Transmissioo Systems...................... 195
6.7.1 Congestion Management in Nomial Operation..........
6.7.2 Integrated Transmission patch Strategy................
6.7.3 ~ i o i i a Sma
~ ~ ~ u s t r a Using wer System ........................
6.7.4 Sfatic Security-constrainedRescheduling ...................................... 202
6.7.5 Dynamic Secmity-constrainedRescheduling .................
6.8 Open-access ~oordi~iatioii Strategies..... ........................... 209
6.8.1 Price Elasticity as a Me
6.8.2 Relieving ~ongestion
6.5.3 ~ o o r d i n a ~ ~betwce
on
6.8.4 ~l~ustrat~on o€Traii~actionCoordiiiatioii ......
6.8.5 ~ n t e ~ r ~Coordinati
ted
6.9 Conclusions ..........................
6.10 ............................................................................. 2 16
6.1 1 ...... 216
6.22 .................................................................................... 217
a ............................................ *.** a***...

7.1
7.2 Development of Electric Power Industry
7.2.1 ~ ~ v e of Power Produ
S ~ c c e ~ Growth
1.2.2 Further Expansion of Power Nehvo
7.2.3 Continuo~I~ increase of Electricity C
7.3 ~ a n a ~ e i System
n e ~ ~of Electric
7.3.1 The State Power Corporation ......... ..................225
7.3.2 hilosophy aiid Strategy o f tlie SP ............................................................. 23 1
7'4 Market in China...
7.4. I ~ o ~ i v a t ifor
o ~Reformation
s ...................................................................... 234
7.4.2 efonn PLaii of tile SP ........ 235
x Contents

7.4.3 Obstacles in Establishing the Power Market in China

7.5 Electricity Pricing ....................................................
7.5.1 Basic Theory of Predicting Electricity Costs ..
7.5.2 Electricity Cost Derivation..............................
7.5.3 Elcctricity Pricing of Inter-provincial Power
7.6 Traiismission pricing ...........,....,.......................,.,,.
7.6. I Current Decomposition Axioms
7.6.2 ~athematicalModels .,..................................
7.6.3 Methodology of Graph The0ry..... ................................... '......'.....~..,..252
7.6.4 Algorithms and Case Studies............................ .... ...... 253
7.7 ......................................... ......................... 254 ~

7.8 Acknowledgenients............... ...............

7.9

8.1.1 Benefits o f FACTS Technology.......................

8.2 Transmission System Limitations ........
8.2.1 System Stability....................................

s..............._...261
8.2.4 Thermal Limits ......

8.3 FACTS TeGhnology............. .......................................................... 262

8.3.2 Control Methods and DSPiMicroprocessor Technology ........................... 264

8.3.3 Present Status on FACTS
8.4 Solution Options with FACTS ............
8.4.1 Fundamental Concepts of
8.4.2 Skuiit Controllers.. ............................................................................. 266
8.4.3 Series Controllers ..................................................
8.4.4 Combined ScriedShuiit Controllers ...,............,..............
8.4.5 Phase Angle Controllers....................
8.4.6 HVDC Transmission Controllers ............................................................... 278
8.4.7 Other Controllers.........".............
8.5
8.5.1 ........................ '........ 281
85.2
8.5.3
8.5.4 UPFC ..................................
~

8.6 Concluding Remarks .......

8.7 Ackaowledgements ...........................
8.8 .........l............................ ..... 284
...."_........_._. ~
Contents Xi

anagenment .........................................................................................................
............................................................... 287
9.2 Pre-privatisation (1 990): Th
9.3 Post-privatisation(1990): F
9.4 Early-inid 1990s: Getting t
9.5 1994/5+: Getting More for Less .................... ....................... 289
9.6 Late 1990s: Capital Effici
9.7 August 1999 Interim Report: All Change?....
9.8 The 1990/2000 Regulato
9.9 Asset Ownership.............................
9.10 Asset Governance.
9.11 Asset Management ......................................
9.12 Asset Information and t
9. I3 Condition Monitoring..................................
9.13.1 Transforniers.....
...............
9.13.3 Switchgear..

9.13.5 ~ n d e r s ~ a i i dLong-term
in~ Asset Costs ......................................... 298
9.13.6 Underground Cables .....................................................
9.13.7 HV Cables.................... .............................

9.13.9 Zero Sequence Impedance

...................

...............

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

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

9.17.5 Data Cleaning ...........................................

Xii Contcnts
-- I
-

9.18 Conclusions .......................................... ........................ .322

9.19 Appendix: Fuzzy DGA for Diagnosis of Multiple Incipient Faults...................323
9.19.1 The IEC DGA Codes ...... .........................................
9.19.2 The Fuzzy IEC Code -
9. i9.3 Fuzzy C)iagnosis Results... .............................
9.19.4 Trend Analysis of Individual Faults .... ........................................ 327
9.1 9.5 Comments........................... .............................
9.20 Refesences .
y ..............................................................................................................
.....................................................................................
10.1.1 A General Overview ....................................
10.1.2 PQIS

10.2.1 The Wavelet Transform. ........................................... 336

10.2.2 Wavelet Analysis .....................................................
102.3 Application to PQ [25] . ..................................... 339

........................................... 342

10.3.4 ~ p c s i o ~Distortion
ic

10.6 ~~f~rc~ces

........................................................ 353
11.2 S o h a r e Agents .....................................

11.2.2 Genesal Issues and the Future of Agents.

.................................... 362

.4 Evolutionasy Programming-based Optimal Power Flow Algorithln

..............................
11.4.2 EP.. ................................... .............................................. 373

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

11.4.5 Gradient Acceleration........................................................
........................... 379
 '.*
Contents U

11.5 Complex Artificial Neural Networks for Load Flow Analysis .....
11.5.1 Conventional A" for Real Numbers ..
1 I .5.2 New ANN for Complex Numbers .........
11.5.3 Comparison of the two ANNs by Coinputer Sirnulatiou ........................... 388
113.4 Applicati
11.6 Virtual Reali
11.6.1 Types of' VR systems...................
1 1.6.2 Non-immersive (Desktop) Systems. ............................................. 396

11.6.6 Cave ....................................................

11.6.8 Augmented ...............................

11.7.1 The Hardware ................. ................................................................... 401

11.7.2 The Correspondence......................................

X 1.7.4 Iinp~eiiientationExample........................
11.8 Coiiclusioris ...........................
11.9 Acknowledgements..

.................
12.2 The Internet................................ ......................
12.2.1 What Is the Internet? .................................................................................. 416
12.2.2 oes the Internet Work .... ............417
12.2.3 What Would Happm Without the Intcrnet? ............................................... 417
12.2.4 Wow Can the Power lndustry Benefit from the Internet?.
12.2.5 ow Can I Find the Inromiation I Need?.................................................. 419
12.3 Usability of the Interne
12.3.1
12.3.2
12.3.3 Internet Products..........
12.3.4
12.3.5 iltimedia Access ..............
12.3.6 0x1-line Setvices ......................................................................................... 42 I
12.3.7 Support for Professionals ........... 422
12.3~8 The Power Industry and the liitemet .......................................................... 422
12.3.9 Recent Improvements on the Inteilnet ....... 424
xiv Contents

12.4 Internct Technology............. .... ....... .................424

12.4.1 Access to the Internet ................................................................................. 425
12.4.2 Operating Platforms on the Internet ..

12.4.7 Internet Sccurity ......................

...................... 433

Interpreled Versus Compiled Iaiguages ....

12.5.3 What Is JavaScript? .................................................................................... 434
12.5.4 What Is Java? .............. .......... ........ ........ 435
12.6 Web Pages. ................................................ 436
12.6.1 .. 437
12.6.2 Difference Between a Static and a Dynamic Web Page ............................ 437
12.6.3 Displayiiig Database Content ................................... 438
12.6.4 Web Pages with Fuuctionality.................................................................... 440
12.6.5 Web Pages with Integrated Applications ......

12.7.1 Why the Need for XML

ation of Content and I .ayout.. ....................

Layout Validation with DTD ..............................
12.75 Styleshects .......
..................... 445

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

12.5) Case Study 2: Power Trading Application .... .457
12.9.1 Trading Platform Architecture ................................................................... 458
12.10 Conclusions ................................
12.11 Acknowlc~~ements ...... ................................................................... 460
12.12 Refercnces ....................
ex ..................................................................................................................................
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,
c~ 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
s 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
environmen~~ 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
tion~ 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 ~ v e markets are also illus
~ general analysis of ~ o m p e t i ~ power
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
y for graduates and e n g i ~ e ~and
~s,
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
adva~icemen~s 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.
The book was contributed by an ititernat~ona~ group of experts to produce a broad and
etail of the main issues. The intent has been to provide the reader with an in
epth ut without excessive specialisation, to avoid a purely ~ualitativetrea~meIi~
by ~ ~some a ~~ a ~ y and ~~ c numerical
a ~l ~
methods, d to offer9
and ~ whenever~ possible,
~ real
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
~~i~y,
use of the advancement of communications technology and increased
compu~iii~ power, it is possible to consider different market structures.
a d v ~ n c ~ ~no e n~ t ~
n f ~ ~ coulda ~ 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
n 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 ~ ~ ton t a d ~ r e g u l a ~~nvironment.
e~ In the embry~nicfree m a ~ ~ e ~ ,
state retains own~rshipof the generators and some of the ~ a n s ~ ~ s sinfrast~uct~re, ion
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
t

p i ~ n i n gover a long-term horizon is p e r c e i v ~as very difficult at present. Yet, E

long-term planning, it is likely that the electricity power industry would be at great risk, as
it ~~~$~~ not be able to supply the growing d ~ or to~~~~~a~~
n the ~ ~
service as it is c ~ r r e ~ t providing
ly to its consu~ers.The recent chaos in
his could have very serious con~~quences to the lon
~ndus~~.
This book shows how new ~ e c ~ i n o ~will o ~allow
y us to cha
market structure to one that relies on co~~petition to set the
t e c ~ ~ o ~ o g iwee s ,can use less energy, result in^ in lower ene
avoid OX defer a d d i ~ ~ o nexpensive
a~ plant c o n ~ ~ rThe ~ ~a ~~~ do OF~~new
. ~ p~ ~o ~~ ~ ~ ~
such as independent power producers, power marketers and brokers, has a ~ d e da new
task of maintai~inga reliab~eelectric system. This book will detail
into accou$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 ent
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
xviii Preface

decen~a~ised 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
from various countries on power utility res~cturingand deregulation. An~lyt~cal tools for
g analysis of c o m ~ t ~ t i vpower
the ~ o d e l ~ i nand e 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,
~ly
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 real-
is chapter discusses future directions and ~ o d i ~ c a t i o ntos the ~ g u l a ~ o policies
ry
0th a market maker and a service r.
economic issues associaked with ssion open access. The
scussion of some ~rnpor~an~ opera~oiia~ 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 ~~~~
To operate the ever i power systems with better e f ~ c i ~ n can y ,ac~urate
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. ~i~y
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
d
ex~~pl~s.
Preface xix

Elechicity industry restructuring has had a dramatic impact on the energy market. To
gain a conipetitive advantage, toclay’s 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
platform iI~~lepe~idence i s that a scrap of code called a Java applet can be embedded in a
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.

i
The editor wishes to thank Mr Peter Mitchell of Wiley and his team in supporting this
project.
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
ip~ 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
~ . permission to reproduce copyright materials by the IEEE and IEE for a
~ o r $ w ( ? rThe
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~~noftbis 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.

r,
of the Royal Society of New Zealand. From 19’70
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,
r c h ,Zealand. From 1982 to 1995, he was also the Director of Systems
~ h i ~ s t c ~ ~ uNew
Software & Instrumentation (a Christchurch-based consulting conipany established in
1982). From 1985 to 1990, hc was Head of Department, Electrical and Electronic
i ~ ~ ~ , of Canterbury. From 1988 to 1995, he was a ~ e i n b of
~ n g ~ n e e rUniversity ~ 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 g
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, 199’7; John Munganest International Power Quali
Power Industry, 199’7; President’s (Gold Medal) Award, Annual Meeting

xxiii
XXIV ~ogra~hy

~otechn~cal 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,
essen G ~ ~ a n in
y , 1994. He was a ~ a ~ - t i ml eec ~ r e rat City
~ ~ ~ ~ r ~s Q n , 1994 to 1996 ~ e a c ~oi bnj ~ c ~ - ~ r i e~n tr ~od g ~ a ~inr C++.
i tny~, ofrom ni~~
e was a Senior Programmer at A M . EST I n t ~ ~ a t i o nEtd, a ~ ~ o ~ ~ from o n 1996
, to
esent, he is a Senior Software ~ n ~ i n e e r A L T I ~London,
, deve~op~ng new
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

~0~~~~~~A. is Chair Professor and

~ngin~ering, The Hong Kong Polytechni ity. His BE degree is from the
s i ~ and PhD from ~ ~ p e r i a l
U n ~ ~ ~ofrGeylon Londo~.He has ~ ~ e v i o u worked
s~y
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,
n~ ~ro~ection and ~ e l i a b i ~ i ~ .
o r was elected an IEEE FeItow in 2000 for his ou~s~and~ng
~ r ~ € e s sDavid ~ o ~ ~ i b ~to~ i o n
electricity supply in dust^ reform an trans~i~$sion acces He is the regional editor
for Asia of the ~ n ~ e r n a tJournal
~o~~l tric ~ o wSystems
~ r

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 businesses,
artered ~ n ~ ~ nand
eer

lie has been at MIT since 1984 as a Senior Research Scientist in the
here she conducts research and teache§ ~ r a d ~ acourses
te in the area of
systeni§~ Since September 1999

Young Investigator Award for

~ s ~ i n ~ ~Li esc~~ r~e er .Pro~ess
d
ale ~ i e c t ~
power
c sys
Biography xxv

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 Electricity’s 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
~ U ~ the pan-European
E ~ association
~ ~ of electricity
~ ~ C
companies. ~

SS ~~~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.
XXVi Biography

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 and
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 (www.ieee.ca).
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.
Biography xxvii

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

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.en~
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.

s ~his BE
~ t received ~ (€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
xxviii ~io~apliy

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
r editorial board of the JournQzo ~ ~ ~ ? o mofEleclric
is a ~ e ~ bofe the 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 hen 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
a~ 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
co~~erences~ r Wong was the General C h a i ~ a nof the IEEE ~ ~ S / C S 2000
E ~
Inte~ational nce on Power Systems Technology powerc con 2000). We is an
editorial board member of the interna~ionaljournal Electric Power Systems Research and
Jour~~ul of ~ ~ t e f l i g~en~f of r ~ u t i oProcessing
n 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.

ee S cquired her degree of Bachelor of Engineering in Electrical

SYS The University of Hong Kong in 1996. In the same year
Miss Yuen was awarded The China Light & Power Company Prize in Electrical Energy,
because of the dis~inctionof her final year project en~~tled ‘The applic~~ionof ~ i ~ c i a l
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
oven tection in low voltage power systems’. In 1998 she was awarded the China
Light 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
ion in energy
markets.

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^
is entitled ‘Electric network economics: underlying p~inciple§
independent transmiss mpany (ITC) and designing a ~ c ~ ~ tfor e cre~ r ~
research i n t ~ r e s ~include
s ~ o d e l l i ~ofg energy markets as stochastic dyn
epts for the 1°C 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
~~~s,
design and r ~ g u l a t economics.
o~
Dr Loi Lei Lai
City University, London
UM

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

na~~onal energy strategies and policies, macroe~onomic develo
conditions, and its application varies from country to country. It is i m p o ~ to~ point
t out
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
tion, (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.
er I~eally,
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,

~rivati~ation 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
t. 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
ower to the monopoly at a ~ p e c i ~ eprice. d Alternative~yall licensed g~nerator~
 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
n s ~ ~ e to
r s choose their own s ion at final c o n s ~ ~ mlevel,
~r
~ouseholdconsumers, is calle This is us~allythe very last
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~onthat 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
ty~
the develop men^ of new technologies in power generation and i n f o ~ a t i o ntechnolo

The ~ontinu~ng growth of competition i erican electricity m

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 ~ ypassage of the Energy Policy Act of 1992
a ~the
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,
e , April 1994, the California Public Utility C o ~ m i s s ~ oadopted
F u ~ h e r ~ o rin n a policy
establishing complete open access to all power producers. By 1996 ~ n d e p e n d ~generators n~
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 consu~ers,
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~abli§hed[2,3].
The system evolving in the USA provides i ing competition and div~rsityamong
gen~r~tors. 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
n ~ a buys 30% of its power from NUGs.
C a ~ ~ f o r Edison
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 power
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 ~ d ~ chane n ~ ~
Energy Generation under thc New Environment 3

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 s~
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.

.3 Th
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
g~ generation is that a spot market for electricity will
develop. The ability to sell electricity on the spot market increases the ge~erator’s
~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
ive at the generation stage, now offer some form of voluntary
inte~up~ible 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
e,
a new c o n s u ~ e service,
r a better method o f reducing costs, or a faster way of d e a l ~ nwith
~
pro~~em promises
s the innova~ora competitive edge.

xis~i
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 coal-
t
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
d of the total bill) and
i ~ of all electricity consumers (which ~ ~ u n t toe 10%
the e l e c ~ i cbill
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
sign~~cantly 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 ~ pricesa ~ 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
on~~
c o ~ p a n yconcept - a company whose focus is becoming more global and more multi-
le US electricity and gas companies have been ~ u r c h ~ electricity
in~
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
process heating in a diverse array of combined heat and power stems. newab able
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,
o 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
er~ 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, t 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
n~ 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 ~
costs.
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 low-
COzpower sources where demand is low to distant regions where demand is high.

1.4.2 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
to mitigation of GHGs.
s i ~ i ~ c a~ontribution
nt

atio
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 n
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 7

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.

1.5.1 ~ 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
on 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 system’s re~iabilityand availa~i~ity
actually increased between 1992 and 1997 when the transmission and dis~ibu~ion network
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
market where conditions change quickly. Distributed gene small-scale units
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
int~rcon~ec~ions 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
d unit,
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 ~ nareasg 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 ts 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
e
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 o€fset these retire~entsand to meet the growing demand for
~ . coal trade has been increasing and is expected to continue doing so in the
e l e c t r ~ c iThe
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 and
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.
Goal
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 y s ~ ~ in~ e r
duration and lower in price.
The existing capacity of the power industry in each country will play an important role
e mix. In the EU, 17% of the conventional thermal capacity is over 30 years
in its ~ t u r fuel
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
re in place. Retrofit of pollution ~ n t r o ~
e ~ ~ i p m e nmay
t 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
electricity,

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 ng.
additional inability of plant operators to cover a plant’s 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
e d power industry will encourage nuclear power plant operators to ~ d u c ~
r e s ~ c ~ electric
~ inc~udingthe costs of purchasing and managing nuclear fuel. ore over,
all o ~ e r a t i ncosts,
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
 0 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.
S
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
l 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),
a~e e d70% if used
which would be further i ~ ~ r o v to
in combined cycle.
a
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 11

~ 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 system
charges are among the programmes being considered. Green ing and
pric~ngprog~ammes,already being im~lementedby electric utilities, may also provide a
se c o n s u ~ demand
~r 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 ~ l y of other ~ ~ l ~ u t a n ~ s ~
a n levels
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
ren e~~ctricity genera~ionschemes, using established te
Pro 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
~y

Links First Hydro Others

1pp* 7% 7 1% ,/-1% lPPs National

-. . .
Energy \-Mission
18% 4%
1.1 C ~ a ~in~the
e market
s shares
12 Power System Restructuring and Deregulation

8% 33%

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 ~ ~ ofg 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' 13

6.6.2 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 ~s, 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,
l~y more
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
y
be attractive as a closed-loop form of power generation. Water is separated into
and oxygen by a solar-powere~el
cell, which genera~eselectricity, h water. The water i
solarpowered ~ ~ e c ~ o ~and y sthe
er
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 ene
storage § y ~ ~ m can§ be made ~ u l t ~ - ~ n c t with
~ o nlittle o n ~so
a ~ or no ~ d d ~ t i cost, ~ that,
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
n t periods of peak consumer demand. Energy storage systems
supply ~ o i n c i d ~with
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,
~egene§yscan be built in modules to the required size ranging from 5 to 500 megawa~sof
I4 i n ~g~ r ~ g u l ~ t i o n
Power System R ~ s ~ c ~ rand

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.

1.6.3 Wind
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 Europe’s 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 fencegq
elect~~cation, and radio station power supply. PV is one of the most flexible technology
s u ~ ~options
ly 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 l hlly, broad~r coop~~ation
g o v ~ ~ m e nelectric
t, 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
 o n the New Environment
Energy G e n ~ r ~ t i under 1

studies point to the need of tax equity to improve the economic ~ompetit~veness
of solar-
thermal plants more than ~echnolog~cal ~reakthroughs.

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 cast-
effectively with CHP. CHP can reduce fuel use, cut emissions and save money. Policy
makers should take a ~ ~ ~ asteps ~ i tov encourage
e 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 iy.
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
~ y the sanie fuel. Using natural gas in the CHP system can reduce e~issions
s ~ p a ~ a t efrom
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~stomers-
incl~dingpublic sector users - and also helps preserve the earth’s 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
g 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.
16 structuring and ~ e ~ ~ l ~

capital costs of these systems may deter er such i n v e s ~ e n t under

s

consumers’ inter is fair. In some

renewable energy sources. In Italy, for example, new legislation requires that from 2001 all
generators and ~ m p o ~ e ofr 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
’s 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~e§§es.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
e 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
dis~bL~ted generators, there have been concerns about treatment of ~ ~ s ~ i bgeneration ~ted
by public electricity suppliers (PESs), especially distributed e n e ~ ~ t i that o ~ i they do not
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 ~ ~ ~ m
minimise the risk of the ~S-ownedgenerator bein treated in a more favourable way than
others.
~ ~ a l set the economic framework in which
The p o ~ ~ t decisions
n e ~ o r k sw311 d e t e ~ i success
~e or failure in meeting the target. Private deve~o~ers will
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
on 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
er
purchas~g~enewableenergy or by chasing tradable green c e ~ i ~ c a t eA
s .~ ~ e ~ i a ~ v e ~ y
able to buy out a of their obligatio~~
e total cast of meet ligaticsn and the associated inc
t ~ o to~ the ~ user. In addition, the provision of a
g end
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
n influence its growth. The Utility Bill is aimed at
impact on d i s ~ r i ~ u ~g e d~ ~ r a t i oand
p u ~ the ~ customer
g 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
~ t a ' een ~inister'with responsibi~~~y
d e p a r ~ e has for ensunn that energy e f ~ c ~ e n c 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 genera~~on.

e~egulatio~ 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,
e~~~ n ~ , Costs will be
safety r e q u i r ~ m ~etc.).
ant built an the gr~enbeltCO
existing ~ i i f r ~ s ~can
c ~ber used.
e 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
1 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
re and
more capital ~ntens~ve than the equivalent costs for coal. As discussed
upstream capital costs are considered in the competitiveness of gas
coalfired plants then the capital expenditure associated with both ~echnologiescould be the
same. The high costs of the pipeline network to t r a n ~ p ogas ~ can outweigh the difference
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
c ~ ~ ~ billion will be required [23]. Such inv
i n f r ~ s of~ US$l00-200
unde~akeiionly in the fr~meworkof long-term contracts and it i s unc
rofitable in competitive electricity and gas markets.

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

e s achieve a higher effici~ncyand
Clean coal technolog~esis a tern used for ~ e c ~ o l o g ithat
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
~ig~tening 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
s emiss 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.
~ ~ n g control equip men^ is also important as future and exis~jngcoal-fired
~ e ~ o f i pollution
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 -
19

energy poses threats to the climate, with potentially severe enviroi~men~al consequences~
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
ta~ 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
i~n the o p p o ~ n i t i e sfor using CEiP, since the power ~ e n e r a ~ ecan
d
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 n nuclear power stations. The role of nuclear power is ex
~ onew
decrease in Europe as the perception of its environmental and economic p e ~ f ~ ~ a has nce
substan~iallychang~d,In the 1970s nuclear power was regarded as a source of cheap and
em~ss~ons-free 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
implementation. The UK ~ o v e r n ~has ~ nplans
t to start phasing out nuclear power in
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 coal.
_sl__
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 nimaget 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
s ~ ~ v e l o p ~ e nAlthough
ts. 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
g environm
e l e ~ ~ ifromc i ~r ~ ~ e w a benergy
le 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 rann ienergy
a supply company has
~nergyscheme which gives eustomers the option to buy a part of or all
om r e n ~ ~ a benergy
le sources 1251.
some c o u ~ ~there ~ e shas been opposition to the cons
1 r ~ a § o ~ §The. poor environmen~lim
erive from the pollu plants of an earlier g e ~ e r ~ ~ iThis
on.
act on new projects. state-of-the-art pl
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 ~al
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,
e they
ds and low unit capital CO
e, it is expected that ne

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

ya of
grid is fin e l e c ~ ~~~ s~ ~l ~set t eg e~n e ~ f i ~ ~ r s
of c ~ s ~ o m[28-403.
~r§
Energy Generation under the New Environment 1

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,
nt 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.
forn DG could be an electric energy source c o n n e c directly
A general ~ e ~ n i t i o ~~ 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~ of

resources and improve the integrity of the ~nstnissionand dis~ribu~ion systems.
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
te 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
ns
 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
market.

1.10.2 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
ed, or 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 ns
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
countries, e.g. in Nord Pool ( S c a ~ d ~ a v i and a ~ , m a ~ d a t oin~ others, e.g. ~ n g ~ and
a ~ d
~ a ~ ase wells as in the National Electricity Market in Austra~ia.In ~ a l i f o ~ i the a,
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 t
arent power market however, other options are also possible to prevent large
rs g e ~ ~ market
ng 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
~ndepe~dently 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
capacity (30 to 50 M ~ of)the DG source. N ver, there is no obvious reason for a
source with a capacity of 25 MW to be treat fferently from one with a capac~tyo
u ~ h e ~ o rtechnical
e, 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 re
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
s gene~ation.With
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 a

t e c ~ o l o ~ i have
e s the d ~ ~ a ~ that v the g e output during an upcornin
~ ~power
urs, can only be pre~ictedwith some ~ c e ~ afor i ne ~

are three main ~ r o b l associated

e~~ 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.
e ~ ~now seem set on an U
until about 1994, s t e a d ~ and
Figures 1.3 and 1.4 show the pool and
cen~ra~isedan 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
i~ 001 capacity ~ a y ~ ~ These
nts.
lack of tr~sparencyin contracts for
. a result, n
onsumer c o n ~ ~ e n c eAs

Contracts for

re I. 001
needed reforms
Energy Generation under the New Environment 5

renewable and CWP enerators, are c o n c e ~ e dsince the a ~ ~ ~ e ~will e n f ta sv o ~

tors with flexible and predic~ble and those gene~torswith ~nflexibl
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
new e l e c ~ market
c ~ ~ that may adversely t the economics of DC. It is i ~ p o ~ aton t
e n s ~ r ethat ~ i s ~ b ~enerators,
~ ~ e d inch CHP, obtain access to the el
d ~ s ~ i b umarket ~ fair terms. As p
~ ~ o on META, a ~ ~ g e i ~ e that
n t s wil
to ana age their risks and achieve fair
osals too, to deal with the needs of
generators.

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
i~ ~eneratorswith~ndistri
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 sma1I”s~a~e

ased on induction ~ a c h i n e which
s have no stead~-sta~ereactiv
i ~ . is a need to import react~vepower to provide Geld exci
generation c a p a ~ i ~There

ators, partic~lar~y can lead to localised increases

s ~ ~ c h r o n ogenera~ors,
us
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 inversion (e.g. PVs

create h a ~ o ~disto ic
s y s t e ~ ss ~ b ~ etoc trap

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

d of CMP and co-generatiQn will result in lower usage of the ~ e ~ in? o r ~

I n c r ~ a s ~use
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
e ~hanr e ~ u c~ ae p ~e~ l
olling a more compl~xand increasingly

~ ~ e r a t Qsuitably
rs 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

1.10.
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 7

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
re
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
available.
~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
y causing degrada~ion in generator perfo
o v ~ r c u ~ e novervoltage
t, efficiency and machine vibration. These
can be alleviated to a c xtent by the use of the Steinmetz c o ~ n ~
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
resistive.
The objective of this case study is to introduce a modified ~ t e i n m ce o~ ~ e c ~ i othat
n
enab~esperfect phase b a ~ a ~to c ebe achieved in a ~ e e ~ ~ hSElG
a s ewhich supp~iessingle-
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, ~ted
which supp~~es ~ a s eIt is assumed that the rotor is driven in such a d~~ection
a s ~ n g ~ e - ~load.
that it ~ ~ v ~the s e swinding in the sequence A-B-C, i.e. in h e same direction as the
~ stator
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
c e are c ~ ~ ~ across
r e s ~ ~ ~ a nRL2 t e dB-phase (the lagging phase), while the ~ u x i ~ i a ~
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
~ n t diagram. It is assumed that the values of C,and C,
re€erence to a ~ o l t a g e / c ~phasor
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 , current I, is contributed by -Icl(where Ictis the current
~ e line
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

_/_3__

a
~~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.
 B
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
i c a ~s. All the equivalent circuit parmeters are as
s ~ ~ e ~Gompone be ~ o n s t a ~ t
except the magnetisi reactance, which is a fbnction of the posit nce air gap
voltage. With reference to Fig. 1.5, the following 'inspection equations' E561 may be
w~~en:

where,
1 = G1+ J
y ,=-
Z1
and

~ q ~ a t (1.6
~ oj nimplies that z ~ r o - s e q u ~ voltages
ce 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
~ ~
~osi~ive-se~uence 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 1

Y,+-Y2
v,=&v. A (1.11)
Y2 -t- Y p + Y,,

v,=J?v. (1.12)
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 (1.13)
3 Y pY , -i-
Y p Y2 + Yri y2

Appiying ~ ~ c ~voltage ~ tos loop 1345 in Figure 1.5,

o f law

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

L + z,,
=0 (1.15)

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
(1.12).

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 ~ isu eemployed in this case study for solving (1.15). This is based on
~ o n€or given values of a and X,, the input i m p ~ ~Z,~ can
the o b s e ~ ~ t that, c ebe ~ o ~ ~
readily.

The following scalar impedance function is first defmed:

z(a, x,>= (1.16)

32 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
ion 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
on is
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

RL, U xtn N z(Rm

(P.U.1 (P.U.) @.U-)
1000 0.977 193 1.2021 412 9.94e-6
10 0.975 109 1.2205 402 7.73e-6
5 0.973059 1.2404 345 2.09e-6
2 0.9672 18 1.3084 377 3.5Oe-6
1 0.958454 1.4576 401 4.48e-7
0.5 0.944063 1.9230 449 1.88e-6
b = 1.0;ail= 0.97b: X,,,
C, = 47 PF;Cl
-z,,,
= 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
ted 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 ted
 neration under the New Environment 33

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

~ondi~ions
for perfect phase balance in three-phase S E E with MSC
v Zph YP @P RL, c, RL2 c
2

@.U,) @.U,) @.u.) (deg) @.u.> ($1 @.U*) @.U*)

0.918 0.967 1.053 130.8 0.59 50 2.73 146
(0.56) (49) (2.82) (146)
0.835 1.037 1.214 134.7 0.51 49 1.78 I68
(0.49) (46) (1.87) (167)
0.805 0.954 1.186 135.5 0.52 44 I .64 161
(0.50) (4%) (1.83) (160)
0.796 0.789 0.992 133.8 0.62 41 2.26 136
(0.61) (39) (2.
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 unde§irable 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 ~ we^ this load
c ethe SEIG will then be § a t ~ s f a c t oetw
and full load. Another method is to balance the SEIG again at smaller loads, which
involves ~ ~ l t i ~ vphasea l uc ~o n~v ~ ~elements
er controlled by a s ~ p s w ~ i e~ h i n gs ~ a t e ~ .
4 Power System Restructuring and ~ e r e ~ ~ a ~ i

volt 4.1

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,,

1.6

0.6

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 5

1.11.6 i~~d ~ ~ ~ ~ r n e
~ i m ~ i P~a~e-balancing
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 ~ ~ g
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

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

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

o~ C, is thus one-half of the main exci~a~ion
y s e l ~ c t i ~proper
g 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 ofc 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)
~l 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.
 1.
1”

0.
El.
0.4 -/ I

4 Phase vohges of t ~ ~ ~ p hSEIC

a s ewith S

hase currents of ~ h ~ ~ - p hSEIG

a s e with S

0 1.

-
0

Fi 3~ upowe~ ~ t
Energy ~ e n e r a under
~ ~ ~ the
n New ~ ~ v i r o ~ e n t 7

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:
-
_I

0.0844
0.112
0.0~2 1
0.098 1
-
- 0.1
-
- 22
- 0.013

(1.17)

de A l m e r ~(PSA)
~ in Spain,
xi@ and success. The key c

its sea§ona~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
n ~ and error’. Genetic algorithms based on the i i a t u r ~law
rocess ~ ~ v o l v i‘trial ~ 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 y the first of its kind to show the d e v e l o ~ ~ eonft a
~ of
scheme aimed at o p t i ~ ~ s i then g response time of a solar power plant to input power and
t e m ~ e r a demand.
~r~

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 c~
feeding the heat exchanger of a desa~~nation plant [64]. The system
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 i oNew
a t the ~ ~nviron~~nt

I Steam
4 1 Generato

Steam
turbine
///*

ACUREX
Collectors
I-- I
I Pump A
I - -

Distributed Collector Field ! Storage System 1 Power Conversion Cooling

tower
(20mws, 1 D loops) j 1 System

Block diagram of the solar power plant

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

shows the overall control bloc diagram of the FLC ed to the plant with
the proposed GA optimisa~ionscheme. For this solar plant, it ted that the o ~ t ~ e ~
t e ~ ~ e r aof~ ther e field depends on other variables such as solar r a ~ a t i o nI and the inlet
tempera~reto the field 7;.,. Mirror r e f l e c t i v ~also ~ has an influence but ch
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
The linearised model is based on p a ~ ~derivatives al (of the ch
ATo with respect. to changes Au, dl and AT,,):

(1.18)

i a ~ can be co~isideredas transfer fitnctions re~a~ing

The ~ a ~ de~vatives the var~a~ion
in
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 (1.19)

Uf =
U-Trl

where !,is the oil flow U i s the t e ~ p e r a ~set

r epoint,
 radiation
Tin
1.16 Control structure of plant

n ’ in
‘ i f - ~ ~ e mles ase ofthe FLC as

where aj, pi xi ,6 i ,E, E [Q,I],

~0000 I } , Rule 1 is not s i g n i ~ ~ a nwher~as

t; as
. It is found that using a higher number of
r o v e ~ e n ~ins ~ e r f o ~ a butn ~ ei ~ c r ~ a s
~ i ~ n ~ ~ The
~ a entire Xeis o f the f o ~ a ~
~ t i ~y h. r o m o s o ~

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 a

~01010101000Q0101 1110101010~01Q111~0~01012
1101Q1Q~0101010~01 1111110110000
11100011100101111Q10101010l000000000000101~11101100111110
1 ~ 110001I1 0001I 100
I1 ~ 0 0 0 1 0 0101
11 1Z 10001 1 111 I 1000110000~00011111Q0
1000111101110111111001010~

The chromosome

Rule base consisting of 49 rules

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

re~ro~uction, crossover
1.18. Firstly, the GA r
nto an ini~~alisatio~
2 Power System Restructuring and ~ e r ~ g u ~ ~ ~

Step 1: Initiaiising pool by geiierating chromosomes

randomly. (size=30)

Step 2: run = run i1 ;/*mn = 0 initially */

Ben = gen + 1; /*gen = 0 initially" /

/*Reproduction*/
Calculating fitness of individual chromosome fram
initialisation or mutation pool.
Copying high fitness chromosomes to reproduction
pool. (Roulette Wheel method)
/*Crossover*/
Selecting chromosomes randomly from mating pool
and crossover.
/*Mutation */
Copying new chromosome into mutation pool,
mutation probability is 0.001.

Step 4: If gen = no-gen

Goto step 3
If run = no-run
Goto step 2
Step 6: End

~ s e u d o ~ c €or
o ~ the
e GA

e n ~ on
~ x p e r ~ ~results 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~
ly in any time interval, we
concurr~n~ly in real-time. The validity of the comparison ~ e ~ e the e nPI and GA-FLC
1 in the fact that the simulator is a proven ~ o of the
~ 0 ~ s ~c h ~e ~0e slies ~ 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
~s
the simulator. The simulator's output is then compared under different control schemes.
The current ~nvestigationis based on this principle.
 n the New E n v i r o ~ c n t
Energy ~ e n e ~ a t i ounder

35000 -
30000 -
25000 -

20000 -
j
isaoo
10000
5000

300 -

300 1 1
25Q
00
150
100
I---- et point

~ ~ f c con
t sthe ~ e ~of thef planto by the
~ GA ~optimisa~~on
~ ~
arison of GA-FLC with PI scheme un er extreme external dynamic c ~ a ~
neration under the New ~ n v i r o n m ~ n t _I___p

such as l a r ~ e ~ s expen
ca~~
e ~ ~ s t cannot
o ~ be~ sec~ s
Energy Generat~onunder the New E n v i r o ~ e n t 4
_l
_ l
*

shnell and S.S. Qren, ‘ idder cost revelation in electric power auctions’, J o ~ r n uof~
ory Economics, Vol.6, 1994, pp.5-26.
o and R. Wilson, ‘Priority service: Pricing, investment, a d market organization’,
Anzerieun Economic Review, Vo1.77, 1987, pp.899-916.
[S] T. Straws, and S.S. i b ~ ~ service with early
‘Priority pricing of ~ n t e ~ p t electric
notifica~ion’,Energy ,V01.14, 1993, pp.175-196.
[9] A. Midtun and S. Thornas, ‘Theoretical ambiguity and the weight o f historical heritage: a
i v e of the ritish and ~ o ~ c g i electricity
c o ~ n ~ a r a ~study an l i h ~ r a l i ~ a t i EmerB
o ~ ~ , Policy,
V01.26, 1998, pp.179-197.
aas, N.Auer, C. Huber, and M. Tranger, ‘Limits for competition in restructured electricity
~ ~ k e- tthe s European pe~ceptive’,19th annuui North Amer~cunCon~erence,United States
Association for Energy Economics and International Association for Energy Economics, 1998,
pp.103-112.
[I I] IEA, World energy outlook: I998 edition, Paris, France, QECDIIEA, 475pp, 1998.
[I21 C, Singh and N. Gubbala, ‘Reliability evaluation of interconnected power systems including
jointly owned ~enerators’,IEEE Transactions on Power Systems, Vo1.9, No.), 199
412.
an, ‘Evaluation of the reliability and production cost of i~i~eKconnc~~ed
ems with jointly owned units’, IEE Proceedings, Vol. 134, No.6, 1997, pp.377-382.
Jaskow, ‘Price a ~ j ~ s ~ine long-term
nt contracts: The case of coal’, ~ ~ ~ r qfLaw n u l and
~conomics, Vo1.3 1, 1998, pp.47-84.
[ 1151 IEA, rroje~tedcosts o ~ g e ~ e r u t ielectricity,
i~g Update, Paris, OECD/ IEA, 243pp, 1998.
[ 161 J. Lane ‘Sweeping thc board’, Power EngineeringInt$~u~ional~ Vol.6, 1998, pp.25-29.
on Embedded Generation, IEE, 28 February 2000.
utanto, ‘Battery storage plant within large load c e n ~ ~ s~9 , E E ~
terns, Vol.?, No.2, May 1992, pp.762-767.
[ 191 Gmzettu Uficiule delta Republica Italians, Decrelo legislatho 16.3.1999 n. 79, Attuazione
comuni per il mercato in
afico e Zecca dello Stato -
[20] EC, ‘Guide to the electricity directive’, available from: http:J/www,~uropa.eu.in~en/
r . h ~ , Belgium, European Com~ission,D ~ r e c t o r a ~ ~ ~ ~ e n e r
c o ~ ~ d g ~ ~ / e l e c . m e i n oBrussels,
II ( ~ n ~ r g yIOpp,
) , March 1999.
E211 P. Baruya and D. Goidsacks, ‘European coal issues - European tibcralisation af coal’, ~ o ~ l d
Coal, Vol. 7 (10); 1998, pp.29-34.
road ben^, ~ G o ~ p e t i ~ i v eof s ~ - the evolution of price’, CS/05, London, U
n ecoal
Goal Research, 20pp,
[23] UNEGE, ‘Security supply in a changing European natura1 gas
~ ~ P . 3 / ~ ~ . 4 / 1 9 9Geneva,
6 / 6 , Switzerland, United Nations Economic C o ~ m ~ s s i o n
for Europe, Committee an Sustainable Energy, 17pp, June 1999.
E241 Couch G., ‘OECD coal-fired power generation - trends in the 199Os’, IE
esearch, 83pp, April 1997.
[ E ] Modern POWCK Systems, ‘World digest: Green power launched,’ Modern Power Sjwterns,
VoI.19, ~ e 1999. ~ ~ a ~
lobal Private Power, ‘Own coal?’, GIobuE Private
Climate, report, The ociety and The Royal ~ c a d e of ~y
 hugar, 'The value of grid-sup
T r ~ n s ~ coiz~ Energy
i o ~ ~ o n ~ e r s iVol.
o ~ ,10, 1995,
eloping CHP in the public sector and beyond'
up Ltd., April 2000, pp.2-22.
Ilan, Pcter Gaossley, Daniel

icks, Fuel Cell Systems ~ x ~ ~ Q i n

hluture far ~ i s t ~ ~g ~
u nt eer a~~ ~ oEniq ,e c ~ ~ i ~ ~ ~

ket ~ a n a g ~ ~ ~ n t
IiwM.w.nemmco.com.a~aulne
Energy Generation under the New E n v ~ r o ~ e n ~ 9

. Wa~son,J. Arrillaga and T. Densem, ‘Controllable d.c. power supply from wind driven
se~f-excitedinduction m~chines*, 1EE Procee~ings,Vo1.126, W0.12, 1979, p p . 1 ~ ~ ~ - $ 2 4 ~ .
[SO] T.F. Chan and L.L. Lai, ‘Phase b a l ~ c i t ~forg n se~f”exc~~ed ~ n d u c g~ e~n oe ~~~~t o~r r’ ~o ~ e e ~ i n g s
of the In~erna~ional Conference on Power Utility De lation, ~estructuringand Power
) , ~niversity,London, TEEE
e s ( ~ ~ T 2 0 0 0City
~ e c ~ n o l o g i2000
[SI] T.F. Chm and L.L. Lai, ‘S~eady~state analysis o f a thr~e-phase
co~iection’,IEEE Power Engineering Review, V01.20, NO.10,
[SZ] T.F. Chan and L.L. Lai, ‘A novel s i n ~ ~ e - ~ she~l € s e- r e ~ ~ lself-excited
a~~d i
using a ~hree-~hase machine’, IEEE ~ r a n ~ ~ u c ~oni QEnergy
ns ~ o n v e r s ~ oVol.
n , 16,

ropriate technology - rural electri~ca~ion in ~ e v e ~ o ~c ~o n~ g~ ~ eZEE

s’,
evzew, Vo1.35, No.7, August 1989, pp.25 1-254.
E541 T.F. Chan, ‘ P e r f o ~ ~ a n cAnalysis
e o f a three-phase induction generator se~f-e~cited with a
single capacitan~e~, ~~E~ Power Engineer~n~ Society 1998 ~ ~ n~ t e e e ~ t ~i a~p ~~ ~r
0 ~ 8 ~ ~ C - 0 - 1 0~~ e~ 9b ~r 71-5,
u, ~1998, Tampa, Florida, U.S.A.
nt ~ ~ c h i n eLondon:
s, Pitman (EL S), 5th Ed,, 1983, p ~ . 3 ~ ~ ~ ~ 3
method o f analysis o f 3 ~ ~ h a ~nduc~ion
se ~ o with~ ~
Proceedin~s,VoI.~OOA,PI. E, 1953,
o f a 3-phase induction motor connected to a single-
~ r o c e e ~ 1959,
~ n ~Vol.l06A,
s~ 1959, p ~ . 1 8 3 ~ 1 9 ~ ”
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. ~ ~‘Experience
~ 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 ~
Prof. Mwok Lun Lo Miss Vee Shan Uuen
The University of ~ ~ a t ~ c ~ ~ d e The U n i v e ~ §ofi ~S
~ ~ a s ~ ~ocwo ,t ~ a ~ d ~ l a s g o w~ ~ c o ~ l ~

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
ng i n ~ ~ g r ~el~ e d
~o~lowed in 1990 and 1996 ~es~ectively. The
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
~ of
titi ion or o ono^^^^. It i s ther~fo
sive exercise of rn
 t ~ oUtiliti~s
~ e ~ ~ ~afaElectric n 1.

v
an
 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 mark
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
ic of the energy market
the year 2000.

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

and sound r~gulationsare required to facilitate ~ransmiss~on open acces
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.

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

~ o m p e ~ is~ the~ ~maino 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
e r sthere is freedom of entry into and exit from ih
are p r i ~ e ~ a ~and
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 d 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
m welfare i s
~equentlyoperates at a s ~ i b o p t ~level.
~al
been introduced in most deregulated m
their own s u ~ p ~Retail
~ ~ r ~. o m ~ e ~ i t i o n
s abie to select their
c u s ~ o m ~ rare
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 of

a ~ e d on energy ~ ~ v a ~ i sne aform
s~randedcosts have also c o m ~ ~ ~ c efforts ~ ~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
 i oElectric
e r ~ ~ l a ~OS n Uti~i~~e~

that time were su

e less WQ~hy and i ~ v e s t o could

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

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

tted offers are r ~ e lowest
d

, each seller i ~ ~ ~ i asub

lly
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 o ~ i Utilities
t i Electric

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

l (Fi
per€ect~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
~heoret~cai~y 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 ~ ~ ~ olution

~ l ~ ~ s ~ r aoft im ~ t caused by congestion

o n~ kpower

~ 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
on. a s is ~ ~ n e (e.g.
n t diffe
Europe and different states in coordination betwe
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
~t
arket ~ a ~ ~ c i ~can
a n hedge
t§ cong
congestion contracts which are also
and give their holders
~ a ~ s m i s s ~system,
on

[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
h 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 ~ ~ ~ g
n Section 2.5.2 ~ifferentkinds of auction ~ e c h a n i ~ r weren s discussed. T
y Pricing is done essentially in eith
uty to set the e l e c ~ c i ~price.
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
c o m I ~ i o d iis~d e ~ e ~ ~ at e d time o f delivery. In an electricity market, a
n the
is like a b~~ateral con~rac~ 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 ~ cbyd 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
~ ~England
d 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 ~ ~
together with losses. Figure 2.5 illustrates the ~n~eraction of ex a m and t?x post p r ~ c i nfor
~
e i e c ~ r i cmarkets.
i~

As in any other c o m r n Q market,

~ ~ ~ all particip ts Rave to bear a certain degr
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
s
stem price in the future. In a ~ ~ m ab~ k elike~~ ~ d
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 ~ ~ s ~ and
c ~ e~ r en~ ~ gl a t i o ~

-
', LOSS '.. \

Compensation

I actual demand
- ~_____-
final clearing price I
1 e.g. Nord Pool, E & W Pool 1
~ ~ r e ~of Electric
l ~ ~ Ui ~ iol i t~i ~ s 3

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
s than be c B ~ t u
11c o ~ s u ~ eshould
rs have access

is a type of b i l ~ t e r ~ l
I
eregulation of Electric Utilities 5

to meet forecast demand. It is a ma

By 10.00 am. every

=3 + 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

~ ~ dispatch
s ~ a ~ ~ ~ ~
~ e nare
t ~listed in Table 2.1.
Deregulation of Electric UtiIities 67

(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 L1 L2
Demand Charges (PSP) (Eh) 308 1156
Total Charge (E/h) 1464

~eneratorPayments G1 62
~ (Light-shaded Areas) (Eh)
G e n ~ r a t i nCosts 616 487
Generating Payments from Pool (Ou~ut*PFF)(E/h) 952 340
Adjustments (Dark-shaded Areas) (E/h) 25 147
Total Payment (Sum of Generating Payments and 1464
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 te
w h o l ~ s amarket.
l~ 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 ~ ~ mthe~NETA [$I, for England and Wales in 1898. The
i c i (~ ~ f published
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 n~s
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 ~
P a ~ i ccan i ~sign~ bilateral
~ contracts that are up to sev~ralyears ahead as desired.
S h o ~ - t bilateral
e~ 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 network.
al-time power ~ ~ charges~are imposed
a 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, many
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
~t
t s to be paid for an increase in output or are willin
p a ~ i c i p ~wish
increase in demand. ecrement bids represent the prices they are willing to pay for a
d e c ~ e in s ~ or wish to be paid for a decrease in demand.
~ output

d
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
, w
tatnett, which is also
ket. The ~ o ~ e spot i ~ the Nord Pool or Elspot, is
g market,
icipants are free to trade in the bilateral contract
power is in ~ a l ~forc 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
ahead of actual delivery, the Nord Pool acc generator offers and
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 9

~ ~ Q I t ~e ~
Q ~~the
s ~, area
c 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
n ~ s an ad itional cost and this charge is called the '
p a ~ i c i ~ a incur
is the dif~erenceb e ~ e e nthe system price and the area price. (A
iilus~atethis m e c h a n ~below)
s~
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 . reveal how much a generator is willing to pay to buy
~ e dbids
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
le 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
s t block. S ~ ~ ~ e misedone
h i ~ ~ ecost n t ~ s ~ ~ ainl W
l yOweeks.

situation. This is reflected in the area prices. Also, because of the physical flow of 10
7 Power System ~ e s ~ c and
~ i ~i ei r ~~ ~ ~ a t i o

Area 1 Sumlus Area DCftClt Area

I
140MW

LI 2 LI 2

16MW (a1 1b0MW 40MW @> 116.8MW

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

EMWh EMWh f,l/MWh

61, Ll: surplus area G2, L2: deficit area

5.8
4.6

80 MW

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

Various Prices and Settlement

Capacity Fee in Surplus Area, C, = P, -Pi = 0.72 f M h
I

Capacity Fce in Deficit Area, C, = PI, - P, = 2.65 f/&W?h

Settlement Price P, = 6.52 E/IMwh
Charge Credited to Ll and G2 (Mc) + PG,*Cd = 73.32 51%
= PLl*C,
ebited to C1 and L2 (Md) = PGI*Cs+ PLZ*C,= 410.32 Eh
Net Income o f Grid Company =Md-M,
= Capacity * (Ph - PI) = 337 E h

The ~ o ~ e g i energy
an 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
s 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 y contributed to a sniall amount of S tmett operating ~ u d g e t
$ ~only
SO f a [I cong~stion~ ~ a g e ~will e nbet costly when con~est~on becomes more
serious. er, the selection of ~egulatingbids using merit order, which is easily
c o m ~ ~ ~ ~ ~ by
n s participants,
ible does not necessarily result in the lowest cost to alleviate
co~gestion.
Deregulation of Electric Utilities 71

2.8.3 Galijhiu

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 whole§ale 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
deregula~ion.
~ have com~licatedderegulation in California. The state gov
~ t r a n d ecosts
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
r (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 ~i§tinct
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.
o r m is adopted and all pa~icipant§are paid or debited the
~ n ~ ~ pricing
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 nMarkclt. p ~ c ~ ~ acan n tsubmit
s
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
t its
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
P31.
tion
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
72 Power System ~ e s t ~ c ~and
i n~g e r e ~ ~ a ~ i

e ddo SO unless they can make more money in the reserve markets than in the
e n c o ~ a ~ to
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 non-
~ . maintenance of system security, the IS0 has
inning res~rve~ a r k e For
certain amount o f both reserves. Since non~spinnin~ res
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
ine~~ciencies caused by unapt market rules.

Since the commencement of energy privatisation in 1989 in the Scotland, u n ~ i ~ e

~ n ~ l a nand d Wales, has not acquired a competitive and e f ~ c ~ e n t sale m a r ~ ~Also, t.
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 s
~nglandand ales with a d j u s ~ e n t made s after ~ i n into
g account the ~iffe~ences of the
markets.
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 Power’s transmission system. Even ough these two d o ~ i n a ~privatised i~
e s ~ vertically inte~rat after ~rivatisation,they are re~uiredto
~ e ~ e r a t i o~no ~ p a n iremain
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
areas.
otential obstacles to e ent trading in Scotland. Firstly, the ~ W Q
ertically integrated. ondly, the market is loo small to be
compe~i~ve, Moreover, the substantial surplus eneration capacity indicates that there i s
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^
 73

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

i ~ market p ~ c i p a n t sin New
s in the C a l i f o ~ Pool,
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
e s the North Island which is connected to the ~ o u t h~sland
Island. The load c o n ~ e n ~ a t on
by an HVDC interconnec~or.Even though the three gove~ment"ownedgeneration
~ o ~ p a n i ~ominate
es 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
, it was soon realised that retail compet~tionalone was not e n o u ~ hto re
c o ~ p a n ybut
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
opera~ionof the m . ~owever,there have been ongoing discu§sions on effe~tive
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.

Afler years o f negot~a~on and debate, The Council for the European ~ n i o neven
adopted Directive 96/92/EC in ~ e c e m ~ e1996 r to liberalise the e l e c ~ i c ~ tin8
y
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
~~g 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~
reasons.
e ~ a n opened
y 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 and
7 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
g 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 ~ofe 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~ew ~ e e l ~which
g is
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
o n s . ~ ~ l , of the Hawaii ~n~ernation~l
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
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
bttp://www.pserc.wise.edulpsercbin/tcsl/, 1998.
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
~~:/t~.ofgem.gov.~~
lielix F. Wu, ‘Coordinatedmultilateral trades for electric power networks’, 12th Power Systems
Compu~a~ion 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,
2000.
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 75

[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.
[14] 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.
[lS] K. Lo, Y.S. h e n and L.A. Snider, ‘Congestion management in d e r e ~ l a ~ eelectricity d
markets’, Proceedings of the I~~erna~ionul Conference on Power Utility ~ ~ r e ~ ~ a
~ e s t ~ c ~ u rand ~ nPower
g i e ~ City Universiw, London, IEEE, April 2000,
T e c ~ n o l o ~ 2000,
pp.47-52.
[16] Michael D, Cadwalader, Scott M. Rarvey, William W. Hogan and Susan L. Pope,
‘Coord~~ation 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.
t~,
[17] R.S. Fang and A, . David, ‘Qptimal dispatch under transmission ~ontrac~s’, IEEE
n sPO
T r a n s a ~ ~ ~ oon 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 http://www.ucci.berkeley.edu/ucei.

[22] The Nordic Power Exchange, ‘The spot market’, available via w~.nordpool.com.
[23] For derails and examples refer to, ’Zonal clearing market prices: A tutorial*, available via
h~:/lwww.calpx.comtnews/publ~cations/in.
[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 http://w.ofgem.gov.uW.
[ZS] Details of future proposals can be found in the latest documents publishe~by O f g e via~ its
: l t ~ .uM,
web site: h ~ ~ .ofgem.gov
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.
s,
associated with a discussion of the losses and
c o n s ~ ~ isurplus’9
n~ 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~://www.greenpeace.de.
e
[29] ~ n ~ o ~ a tobtained
i o n in the ‘Strombijrsen’section at: h ~ t ~ : / / ~ . s t r o m . d e .
 Prof. Chen~ChingLiu
Un~versityCollege Dublin Universi~of ~ashingtQn
Ireland 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
(ge~~erators) 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~
co~s~~ers.
A l t ~ o ~ electric
gh energy can be stored in batteries it w
tities and hence ~ l e c t ~ is c ia~ r ~ a l - t i ~corn
e
i~stan~ly. 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]. tion
y, a n ~ ~ lservices
l a ~ and
Competetive Wholesale Electricity arke et§ 77

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 high-
system 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,
rl~ au~oritiesare implementing new market s ~ c ~ r toe es n c o u r a ~ ~
corn~et~tion [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 demand-
c 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~
g process
f scheduling algorithms, each one s
roblem over a distinct time frame.
~nvo~ves econom ch ~~gorithms which achieve a real-ti
and demand in a least cost manner. More advanced economic
the optimal ~ o w e rflow ~~~~~ e consider the optimal
c o n ~ ~ a i n~ncluaing
ts transmissi 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
tch
to current circu~stan~es.
7 Power System ~ e ~ and ~ c ~ ~

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 ~here€orea 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 nt [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
e 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 flaws
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
s roduce the same desired results. There i s no
olution to the complex problem o f e l e c ~ c m i ~ ~ k de~ t
ators will agree that competitive e ~ e c t r i cmarkets
i ~ ~ will resat1
society there are some very s i ~ i ~dif€erenc~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
c e
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
c~arac~erist~cs incl~deauctions, b i d d ~ nprici~ig,
~, fo~ard
ential markets, congestion man
ary services, physical and ~ n a n c ~mal
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.
o~
 s ~ ~ Markets
C o ~ ~ ~ t e~~hi vo el e Electricity 79

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 e~
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
ons 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 l y de~iveredins~ntly(i.e. no storage) and its
c ~ e v e n ~ a ~be
ower system. The closer we get to physical delivery th
the operational and reliability constraints. These basic principles are
i n g and it is universally accepted that e
n many ~ ~ c ~ i o nmarkets
i~dependen~ system opcrator (ISO). Although an accepted pri
the IS0 is a hotly debated topic. S market structures require a large role for the
w h ~ others
l~ require 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 a~e
, 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

g, from
c o ~ e c ~ i o~no l i c ~ econ~est~on
s, 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 t 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 aoni ~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
nt’s 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
sm~ss~on 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,
§ age,
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 a t as
~ e vol~dge~ o n t r owere e~
opt ~ ~ is atioprocess
n 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, e
o r § be obliged to provide these services in order to be all~wedto
howev~r,g ~ n ~ r a ~ may
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 ~self-
ly
~ 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
~v~

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

number of choices d ~ $ ian~e li e~~ ~ r i ~ i ~

~ e ~is used to i ~ ~ u s ~ the
s ~ s model a t ebasic c ~ a r a c ~ e ~ s t i c s
refe~encesto existing wholesale ele ity markets are used here to illus
characteri§ti~s but it should be no eneral these exist in^ m
ecul~ar~t~eswhich 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
the
r sh

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

tors have quadratic production cost

~ i n i ~ uand
mr n a x ~ gen
~u~ con§~aintsgiven by

are the power outputs in MW of generator #1 and

ic utility curves and n i m ~ mand max~mum

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

Line A (3.5)

Line AC (3.6)

of the respectiv~lines to inj~ctionsat

The coef~cientsof P, and Pzare the line sen~~~ivities
buses r~spectively[27].

us A Line A
us

istinct ~ a d ~ ~n g~ c h a n ithe
s ~central
s ~ auction
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 3

3.3.3 ~ddin
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
~t expect to get by selling in a different market. This price
assu~ptionin a competitiv~market is an optimal strategy for a market particip
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
n the
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
(ut~~ities) 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 n~l
case where bids vary from incremental cost (utility) is dealt with later in the section on
~ S e ~ t i o3.3.9).
n 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.

20

0 100 200 300 400 500 BOO 700

Power (MW)

Cost ( ~ t i lcurves
i ~ ~ for the small test system
 5

n
u
0 100 200 300 400 500 600 7

3 I ~ ~ r e ~ e icost
i ~ a(utility)
l curves for the small test system
C o ~ ~ e t e ~Wholesale
ive Electricity Markets

Profits for the ~ e n ~ r aare a ~t ea ~~ i the

~ ~c ar ~s c u ~by n ~di~erencebetween the r e ~ e n ~ ~
e cost. The cost in t h ~ calcu~ations
§~ is taken to be the
i~nore§other 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 ry wi

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
r amb
~ ~ 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) Price ( $ ~ ) ( S u ~ l ~($A)
~ Profit s)
Generator #I 313.6 18.3 683.7
~eneratQr #2 409. I 18.3 21 10.3
Load #\ 522.7 18.3 437 1.9
Load #2 200.00 18.3 4345.5

3.3.5 ~ 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 i~n
ervice needs. The forward markets also perform a very important financial
ants by locking in prices an
I-time (spot) markets and is ractice [SZ]. In power
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
~s
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~ hown 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
hes 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
~ 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
r e a ~ -basis
E567.

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
seque~tia~ e l e c ~ c market
i~ structure is one in which the energy t ~ a ~ ~ d
ndently of the transmission and ancillary services. The provision of the
tlal trans~issionand ancillary services needs follows e ~ e r g y~ a d in~ an ~
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
i a There i s a strong physicai coup1
a l i f o ~ ~[58].
Compete~iveWholesale Electricity 7

s congest~onmanagement and this is reflec~ed some markets where

s e ~ i c e and
ded s ~ ~ u l t a n ~ o u sAl ys~muItaneo~s
. electricity market cbre is one in which
y the transmission and ~ c i l l a r ys
a n ~ ~ u s lwith
ania, New Jersey, Maryland, USA) ~ n t e ~ c o ~ e [60] c~~on
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
o n power ws are given in Table
the ~ a n s ~ i s s i line
3.2.
le 3.2 Power flow, market clearing, transmission ~ n c o n s ~ ~ n e d

-100
Line AC (PAc) 337.5 200
Line BC (PBc) 385.2 400

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
ts Table 3.3 gives the ~uant~ties, prices and p
the power flows.

Market clearing with transmission constraints

Generator #2 467.0 20.0 2871.1

h a d #I 378.0 22.9 228~.0
Load #2 200.00 22.9 3419.1.

Power flow, market clearing with ~ransmissio~

cons~aints
Line Line flows (MW) Line limits &IW)
-100
Line AC (PAJ 200.0 200
400
 structuring and Deregulation

e in Table 3.3 the price at each bus is differe

~ o t i c that ce the ~ n ~ o d u ~ tof
i othe
n
term locationa~marginal pricing or nodal price at each bus is the
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, ~o~ational
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
ve 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

Li (3.12)

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

~ e n e ~ a#It o ~ 92.6 13.9 -214.3

~ e n ~ r a tfc2
or 472.2 20.2 2945.3
Load #I 364.8 23.3 2129.6
Load #2 200.0 23.3
9 Power System Restructuring and

Table 3.6 Power flow, market clearing with transmission constraints and
bilaterals

Line Line Rows (MW) Line limits (MW)

Line AB (P&) -97.4 -100
Line AG (PAJ 200.0 200

The bilateral trades have altered the central market result. In order for
be allowed they need to pay for the tran§m~ss~on service. The ~ ~ s ~ i s
a l is the product of the q u ~(10t MW)
b i l ~ t e ~W1 ~ ~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 $/h. The ~ ~ s m i s § i charge
on for
product of the quantity ntal cost of ~ansmi§sion
d bus G ((2~.3-20.2)$ / ~ i.W ~ ~ ~ ilatera~trades re in a
d~rect~on 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
charge s been eEe
central auction. This concept is r e c o ~ n i s ~indNorway where zonal
ement ~ u ~ o § bilateral
es trades b e ~ e e nzones
c e ~ ~auc~ion
al [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 1

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 th~ cost
ts and accounts for the inter
g [l5]. In so
r a m ~ ~ nrates
need to be ~ n t e ~ a l i s eind the bids of the p a ~ i c i p ~16
ts
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
te cons~aints.In the
clearing examples above the optimisation problem variables were which are
con~inuo~s.In a centrally scheduled system the objective is th of social
welfare, subject to ~onstraiiits9 but the variables are both continuous (quan~ities~ and
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
power, i.e. they can bid s~a~egically to increase their own profits. There is a mu
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
t 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 ~$MWh

~enerator/Load Quantity (MW) Price ($/NIwh) Profit (Surplus) ($/h)

~enesator#I 106.3 16.1 25.2
Generator R 48 1.3 20.4 3075.1
Load #1 387.6 22.6 2403.2
Goad #2 200.0 22.6 3480.4

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
h
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
r
ed that must run for r e ~ ~ a b i lreas
~w
R) generators are ~ o ~ p e n s a t outsi
ed

market results [8OJ.

In the example above it should be noted that the strategy of g~nerator# I is not op~imal.
e s be found, however [S1,821. Successful ~ a ~behaviour
ptirnal s ~ a ~ e g ican i n ~ re~u~es
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].
e~
onstra~~ts 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 ~ ) the social we~fareis her r~duced,
a l ( ~ t i l i then
 Wholesale Electricity Markets
Coin~etetiv~

Social welfare
Market Social welfare ($h)
No t ~ ~ s ~ i s sconstra~nts
iQn tab^^ 3.1) 11,511
~ r a n s ~ i s s ~constraints
on (Table 3.3) 10,715
Gaming and transmission constraints (Table 3.7) 10,711

3.3.10 A n c ~ i Services
~u~
s e ~ i c e sare required for the reliable operation of the power sys
s ~ n ~dre d~ n i ~ of n services is not globally accepted. AGC, resesve (s
~ othese
~ , fo~~owing,
s t a ~ d b yload v o ~ ~ control
ge 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

s not
these s e ~ i c e are

term contract. Some of

~ ~ k eInt ~. J AGC ~ is, se
they are L ~ w i orl ~ ~ ~then
~ the IS8 operates a
acquired by cons~aining
e process of a c q u ~ this
~n~

energy and ~ansmi§s~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
~i~
r d e.g. day ahead. Spinning reserve is the a~~~~~
advance by acquiring it in a ~ o ~ amarket,
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
i n gtime period. It is also ass
acihes in the s ~ ~ ~reserve
loads are ~ncapableof p r o v i d ~ ~ ~ reserve. Therefore the ~
spinn~n e ~ ~ ~ e

1I- 0 . 5 ~ ~ 0-0P2)2 200 (3.13)

Table 3. the r e s ~ of
~ ~clear
s 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

__.II_.

G e n e ~ a ~ o r ~ oQuantity
a~ (MW) Price ($/MWh) Profit (Surplus) ($h)
Generator #1 3 16.9 21.9 1842.4
Generator #2 291.5 21.9 2969.2
Load #I 408.4 21.9 2669.3
Load #2 200.00 21.9 3614.1

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,
al 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 Tabley 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
d 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

t bid curves for reserve and other ancillary services should
competitive e n v i r o ~ e n the
reflect a pa~cipant’sexpected o p p o cost. ~ ~ Expected
~ o p ~ o ~ ~ ncost
i t ywill require
a ancillary services markets fo
i ~ g energy spot price [69]. In C a l i f o ~ i the
f o ~ e c ~ s tofthe
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 t
cleared simul~neouslywith the energy and transmission markets. With ~ a n s ~ i s s i oand n
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].
ion

3.3.11 ieal and Finan~ialMarkets

~ § be physical or financial. If the markeE is physical then the quantities are to be
~ a r k e can
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
~ndicat~ve 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
te
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
that thc ~eneratorand load h W at a price P,,. The two
bil~teralc o ~ ~ aare c t perfectly of the uniform price. The s
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. ~ If
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
load bus. This p ~ y n i e ncould ~ be revenue depending on the price d~fferenti
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 ~ can be very variable and ~ e n c ethe price of
~ a ~ i o nprices
ly voIatile. A solution to this difficulty is the conc
ion ~
~ r a ~ s ~ i s srights ~ whereT pa~icipants
~ ) can in advance ~ ~ r c h a fr
se
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 traded
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
ex~s~ence of ~ u l t i p l etrading o p p o ~ n i t i e (bilateral,
s spot market, forwar
the wholesale electricity market ~ a ~ i c i ~ win a n ~endeavour
s to optimise their portfcdios
[89,90].
From the el~ctr~city above it is eviden~that there is a
arke et characte~sticsde§c~~bed
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.
t~
This model oflers all the ~ e n ~of~ co~prehensive
t § CO
icipa~io~ 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
rs could lead
consequence of the i~tegern opti~~§ation proce
dificulty the prices are set by lex algorithm whic

oach should m i ~ i ~ i any

se
~ l e ~markets ~ c arei ~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) l~~ and
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.
y
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.

3.5.I ~ a rPower
~ ~Evulualion
t and ~itig~lion
valuation of market models can have many differe~tv i e ~ o i n ~ sThe . ~ a r ~ must
e t
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 s
not overly volatile.
on there are some a v a i l a b ~simuiat~on
~ and a ~ a l ~tools.
ic
simulation model that considers the market s ~ c t u r and e estimates
and ~uantities.Kumar and SheblB [93] have dev~lopedan auctio~
market simulator. s et al. @ I ] have developed a framework to in supply
when all p ~ c i p a n t are
s maximising their own Green
and ~ e w b [94] e ~investigated the UK market using the supply curve
e doubt that market power is bei exercised regularly in many electricity
T h ~ is~ little
m ~ r k [95,96~.
~ ~ s This practice is characterised rices, which are well above co~petitive
levels, The result is ~ i c a l very~ y profitable for the ge~eratorand ult~matelycostly for
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 r
[96]. ~ransmissioncongest~~n can give p ~ i c i p a n t slocal market power and they can
~ a n i ~the ~ ~ t e marginal prices 1971. Some possible solutions to this problem
~ Iocational
~ following [76]:
i n c ~ u dthe
Competelive Wholesale Electricity Markets 99

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 ng
transmiss~onlines.
Making the load more responsive to price. In the examples n here the load is
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
ing that can respond to the m a r ~ e t
e.
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
market.
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
e, ancillary services markets have had price caps i m p ~ ~ [79].
ed

3.5.2 ~ y s t Capacity
e~
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.
rs
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
reconci~~a~ion where ~ a r g i n apricing
~ may not be sufficient to cover all costs and give a
1 Power System R e ~ ~ ~and
~ Dere
r i n ~

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

a l will in the long i-un resolve this issue. In the lon
that m ~ ~cost~ pricing
not suf~cientto cover
business. However, this i
~ d Wales power pool ere are
in the ~ n g l a arid
c a p a ~ pi ~
a~ents p ~ i c i p a n t sreceive in addition to the market spot
~ a l i f o no
~ ~such
a 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
tra~smissio~ n ~a long-term issue [30 d the markets have only been recently
i n v e s ~ e is
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 ~ty
i~ef~c~encies.

.5.3 Reliability
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
. In an operational envir ent, an important re~~ability ~ e a § u r eis
em security refers to system’s 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
without viol at^^ the erating constraints in case of a like c o n ~ n ~ e n such c y ~ as a line or
g ~ ~ e r aot uo ~ g e11 In other words, s e c u is ~ defin
~ with re spec^ to a set of next
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.
es
n s , flaws andor h ~ a en~ o r s[
q ~ i ~ m e ~n at l ~ n c t ~ odesign
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.
ty 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
on 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
e~ 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.
is defined fo city market
triC ity Gouncil nes ATG as
Competetive Wholesale Electricity 1

‘the Total Transfer Capability (TTC), less the Transmission ~eliabil~ty Margin ( T ~ less ~ ,
the sum of e ~ i s ~~ansmission
in~ c o ~ ~ t m e n(which
ts includes retail customer s e ~ ~ can e)
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
n con§traints~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.
l~~
e x a ~ p of ~ ethe ~ o n on power flow c ~ ~ ~ ~ l can
d e t e ~ i n a ~ based ati~i~s
in Bergen and Vittal [ To determine the ATC for a path from X to Y, one can ~nject
an a ~ o ~ofn power t at node X and remove the same amount of power at Y and calculate
the power flows. v e d i s increased to a level that c
the i n j e c t e ~ r ~ ~ o amount
~ansin~ssion line 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 en
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 te 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
ns
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
~ tos 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~ re
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
e r P,, increases fro^ the zero level. To s u ~ a r i s ethe
p o ~ e~r a n s ~level ,
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 ~ $ ~ andc ~ ~ n ~

T3

Illustration ofa power system security region

Comp~te~ive
Wholesale Electricity Markets

3.5.4 TechveicalIssues
~ e g ~ d l e of
s s wholesale electricity markets power system p l a ~ i n gand opera~~on has
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
r the market particip~ts11121, which may or may not
solved in a d i s ~ b u t e dm a ~ e by
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
pe 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.

.6
The authors would like to thank ESB National Grid, UCD President Res~archA w ~ d and
s
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
insights.

.7
[I] S. Hunt and 6. Shuttleworth, CompefitioPtand choice in Electricity, John Wiley & Sons, 1996.
[2] EU, European Union Council Directive 96/92/EC, 1996.
[3] FERC, Regional Transmission Organisations, Docket No. R ~ 9 9 - 2 ~ 0ava~~able ~, at
~ . ~ e ~ , f2000. ~ . u s ~
141 D.W. Bunn, ‘Forecasting loads and prices in competitive power markets’, IEEE Proceedings,
V01.88,pp. 163-169.
[5] T. Gjengedat, J.Q. Gjerde and R. Flolo, ‘Ancillary services in deregulated power systems:
What are they: Who need them and who pays’, Proceediags of the Power System Technology
Conference, 1, 1998, pp.704-709.
[6] H. Singh and A. Papalexopoulos, ‘Competitive procurement of ancillary services by an
~ n d ~ p e n a esysteni
n~ operator’, ZEEE Transactions on Power Systems, Paper No. PE-427-
PWRS-0- 06- 1998,2000.
[7] T.W. Gedra, ‘On tra~missioncongestion and pricing’, IEEE ~ r a n s a c ~ i oon ~ i sPower Systems,
Vol. 14, 1999, pp.241-248.
181 L. Hyman, ‘‘Transmission, congestion, pricing, and incentives’, ZEEE Power ~ n g i n e e ~ ~ n g
Revinu, August 1999, pp.4-10.
191 R.D. Christie, B.F. Wollenberg and I. Wangensteen, ‘Transmission ma~agemen~ in the
deregulated environment’, IEEE Proceedings, Vo1.88,2000, pp.170-195.
I101 R.D. Christie and I. Wangensteen, ‘The energy market in Noway and we den: ~ n ~ o d u c ~ i o n ’ ~
IEEE Power Engineering Review, February 1998, pp.4445.
[ 1 13 G.Strbac, E.D. Farmer and B.J. Cory, ‘Framework for the incorporation of demand-side in a
competitive electricity markt’, ZEE Proceedings Generation, ~ r a n s t n i ~ ~and
I s ~ o~n ~ s ~ r i b ~ ~
VOI.143, 1996, pp.232-237.
[12] A.J. Wood and B.F. Wollenberg, Power Generation, Operation and Control, Wiley
Interscience, New York, 1996.
[131 R. ~ i l ~ and ~ ~R.N.
o Allen,
n Reliability Evalua~ionof Power Systems, Lo
1996.
[ 141 K. Baldick, ‘The generalized unit commitment problem’, IEEE Transactions on Power
Systems, Vol. 10, 1995, pp.465-475.
[I51 M. Walsh and M.J. Q’Malley, ‘Augmented Hopfield network for constrained generator
scheduling’, IEEE Tramactions on Power Systems, Vol.14, 1999, pp.765 - 771.
[I61 J. Batut and A. Renaud, ‘Daily generation scheduling o p t ~ i ~ a t i owith n
constraints: a new class of algoriths’, IEEE Tramactions on Power Systems, Vo1.7, 1992,
pp.982-989.
[I71 JJ, Shaw, ‘A direct method for security constrained unit c o ~ ~ e n tIEEE ’ , Trans~cfionon
Power System, Vol.lO, 1995, pp.1329-1340.
[ 181 L.F. Escudero, J. Salmeron, I. Paradinas and M.Sanchez, ‘SEGEM. A simulation approach for
electric generation management’, IEEE Transactionson Power Systems, Vol. 13, 1998, pp.738-
747.
[191 R.J. Green, ‘Competition in generation: the economic foundation’, IEEE Proceedings, Vo1.88,
2000, pp.128-139.
[20] R.D.Christie and I, ~ a n g ~ n s ~ e‘The e n , energy market in Norway &nd Sweden: Congestion
~ , Power Engineering Review, May 1998, ~ p . 6 1 - ~ 3 .
~ n a g e m e n tIEEE
[21] R.D. Christie and I, Wangensteen, ‘The energy market in Horny and Sweden: The spot and
htures markets’, IEEE Power Engineering Review, March 1998, pp.55-54.
1225 J. ~ c o n a ‘A , bid solicitation and selection method for developing a eompetit~v~ spot priced
electric market’, IEEE Transactionson Power Systems, Vol. 12, 1997, pp.743-748.
~ ~ ~ industry - a review’,
1231 N.S. Rau, ‘The need for capacity markets in the ~ e r e g u l aelectrical
~ r o c e @ d ~ofn the
~ s IEEE Power Engineering Society, ~ ~ ~~ te ee r~New ~ nYork,
~ , 1, 199%

1241 J.M. Jacobs, ‘Artificial power markets and unintended consequerices’, I E . E fiansacfions
POWWS y s t ~V01.12,
~, 1997, pp.968-972.
[25] ET. Singh, S. Nao and A. Pa~alexopoulos~“Transmiss~o~ congestion managei~ent in
competitive electricity markets’, IEEE Transaclions an Power System, Vol. 13, 1998, pp.672-
680,
Competetive Wholesale Electricity Markets 105

[26] C. Taylor, Power System Yoltage Stabifity, McGraw Will, 1994.

1271 K. Seeley, J. Lawanee, J, and C.-6. Liu, ‘Analysis of electricity market rules and their effect
on strategic behavior in a non congested grid‘, IEEE Transactions on Power Systems, V01.15,
2000, pp.157-$62.
[28] F.C. Schweppe, M.C. Caraminis, R.D. Tabors and R.E. Bahn, Spot Pricing of Electricity,
Kluwer ~ c a d e m i Publishers,
c 1998.
[29] G. Strbac, D. Kirschen and S. Ahmed, ‘Allocating transmission usage on the basis o f traceable
contributions of generators and loads to flows’, IEEE Transaclions on Power Systems, Vol. 13,
1998, pp.527-533.
[30] J.W. Marangon Lima and E.J. de Oliveiw, ‘The long-term impact of transmission pricing’,
LEEE Transactions on Power Systems, Vol. 13, 1998, pp. 1514-1520.
[31] N.S. Rau, ‘Optimal system dispatch o f a system based on offers and bids - a mixed integer LP
formulation’, IEEE Transaciions on Power Syslenns, Vol. 14, 1999, pp.274-279.
[32] B.H. BaWtcn, Technical and Economic Aspects of Operation of Thermal and Hydro Power
Systems, P h n thesis, Norwegian ~niversityof Science and T e c h n o ~ o199’7.
~,
[33] M. Flynn, NI.. Walsh and M.J. O’Malley, ‘Efficient use of generator resources in emerging
electricity markets’, IEEE Transactions on Power Systems, Vol. 15, 2000, pp.24 1-249.
E341 J. Kumar and G.B. Shebl6, Tramework for energy brokerage system with reserve margin and
transmission losses’, IEEE Transactions on Power Systems, Vol.11, 1996, pp. 1763-1769.
[3S] N.S. Rau, ‘Assignment capability obligation to entities in competitive markets -the concept of
reliability equity’, IEEE Transuctions on Power Systems, Vol. 14, 1999, pp.8~4-889.
[36] R. Billinton, L. Salvaderi, J.D. McCallcy, H. Chao, T. Seitz, R.N. J. Qdom and G.
Fallon, ‘Reliability issues in today’s power utility environment’,
Systems, Vo1.12, 1997, pp.1706-1714.
[37] C Concordia, L.H. Fink and G . Pouiilkas, ‘Load shedding on an isolated System’, IEEE
T r a n s f f c ~ ~Power
o n ~ Systems, Voi.10, 1995, pp.1467-1472.
[38] J.W. O ’ ~ u 1 ~ ~ vand a n .J. alley^ ‘Economic dispatch of a small utility with a ~ ~ q u e n c y
based reserve policy’, IEEE Transactions on Power Systems, VoI.11, 1996, pp.1648-1653.
[39] G.B. ShebltS, ‘Priced based operation in an auction market structure’, IEEE ~ r a n s ~ c ~ ~ ooyy11 s
Power Systems, Vol.11, 1996, pp.1770-1777.
I401 H.A. Cooi, D.P. Mendes, K.R.W. Bell, and D.S. Kirschen, ‘Optimal scheduling of spinning
reserve’, IEEE Transactions on Power Systems, Vo1.14, 1999, pp. 1485-1492.
lynn, P. S h e r ~ ~ J.n ,Dillon and M.J. O’Malley, ‘Reliability and reserve in compe
electricity market scheduling’, IEEE Trcansactionson Power Systems, Tdol. 16,2001, pp.78
[42] M.J. Sullivan, B.N. Suddeth, T. Vardeli and A. Vojdani, ‘Intemption costs, us tom er
satisfaction and expectations for service reliability’, IEEE ~rafls~ctions on Power ~ y s ~ e m s ,
Vol.1 I, 1996, pp.989-995.
1431 J.W. O*Sullivan and M.J. O ’ ~ d i ~ e y‘A, new methodolagy for the provision of reserve in an
isolated power system’, XEEE Transactions on Power Systems, Vol.14, 1999, p p , ~ 7 4 - ~ ~ 3 .
[44] T.W. Gedra and P. Varaiya, ‘LiWarkets and pricing far interruptible electric power’, XEEE
Transacti[)nson Power Systems, Vo1.8, 1993, pp.122-128.
[45] N. Rudnick, K. Varela and W. Hogan, ‘Evaluation of alternatives for power sys~em
coordination and pooling in a competitive environment’, IEEE Transactions on Power
Sysfems, vO1.12, 1997, pp.605-613.
10 Power System R e s ~ c ~ r i and
n g Dere

R.P. McAfee and J, ~ c ~ i l l a ‘Auctions

n, and bidding’, Journal of Economic Li~erature,June
1987, pp.699-738.
R.D. Tabors, ‘Lessons form the UK and Norway’, IEEE Spectrum, August 1996, pp.45-49.
G. Gross, D. Finlay 6. and Deltas, ‘Strategic bidding in electricity generation supply markets’,
Proceedings ofthe lEEE Power Engineering Society, Winter Meeting, New York, 1, 1999,
pp.309-3 15.
W. Vickrey, ‘Counterspeculation, auctions, and competitive sealed ~e~ders’, J o of ~
Finance, March 1961, pp.8-37.
H.R. Varian, ~ n t e ~ e d i aMicroeconornics:
te A mo~ernapproach, 5th Edition, Norton, New
York, 1999.
OFFER (2000) Office of Electricity Regulation, United Kingdom. www.ofgas.g0V.uk.
. Bjorgan, C.-C. Liu and J. Lawarrbe, ‘Financial risk managem~ntin a competitive
electricity market’, IEEE Transactions on Power Systems, Vo1.14, 1999, pp.p.1285-1292.
.J. Kaye, H.R. Outhred and C.B. Bannister, ‘Forward contracts for the operation of an
ectricity industry under spot pricing’, IEEE Transactions Power System, Vo1.5, 1990, pp.46-
52.
CalPX, California Power Exchange, www.calpx.com, 2000.
CAISO, California Independent System Operator, m.caiso,com, 2000.
Power Pool of Alberta, ~ . p o w e ~ o o i . a b . c2000.
a,
P.R. Gribik, G.A. Angelidis and R.R. Kovacs, ‘Trmsmission access and pricing with multiple
separate energy forward markets’, IEEE Transuc~ionsPower systems, Vol.14, 1999, pp. 865-
876.
J.J. Gonzalez and P. Basagotti, ‘Spanish power exchange market and information system
design concepts, and operating experience’, ProceediBgs of the 21” Power dndustry Computer
Applica~ionsConference, 1999, pp.245 -252.
X. Ma, D. Sun and K. Cheung, ‘Energy and reserve dispatch in a multi-zone electricity
market’, IEEE Transactions on Power Systems, VoLl4, 1999, pp.913-919.
Pennsylvania, New-Jersey and Maryland Interconnection, ~ . p j m . c o m2000.,
hey, D. Goodwin, X. Ma, D. Streiffert, and D. Sun,‘A security-constrained bid-clearing
system for the New Zealand wholesale electricity market’, IEEE Transaciions 08 Power
Systems, Vol.13, 1998, pp.340-346.
K.W. Cheung, P. Shamsollahi, D. SUR,J. Milligan and M. Potishnretc, ‘Energy and ancillary
service dispatch for the interim IS0 New England electricity market’,
Proceedings of the 2Ist Power Industry Computer Applications Conference, 1999, pp.47-53.
W.W. Hogan, ‘Contract networks for electric power transmission’, Journal of Regufoto9
mics, Vo1.4, 1992, pp.211-242.
Order accepting for filing in part and rejecting in part proposed tariff amendment and
on revaluation o f approach to addressing intrazonal congestion, California ISO, Docket
No. ER00-555-00, available at www.ferc.fed.us, 2000.
ME. Baran, V. Banunarayanan and K.E.A. Garren, ‘Transaction assessment method for
allocation o f transmission services’, [E!?.. Tramactions on Power Systems, Vol. 14, 1999,
pp.920-928.
C. Li, A.J. Svoboda, X. Guan H. and Singh, ‘Revenue adequate bidding strategies in
competitive electricity markets’, IEEE Transactions on Power Systems, Vol. 14, 1999,
497.
-
Competetive Wholesale Electricity Markets 7

[67] TEEE Current Operating Problems subcommittee, ‘Operational aspects of generation cycling’,
IEEE T r u y ~ a c t j Power
o ~ Systems, V01.5, 1990, pp.1194-1203.
E681 I. Q~~ro-Novas, C. M e s e ~ e r C.
, Batlle and J.J. Alba, ‘A simulation model for a competitive
generation market’, IEEE Transactions on Power Systems, Vol.15, 2000, p ~ . 2 ~ 0 - ~ 5 4 ~
Szkuta, L A ria and T.S. Dillon, ‘Electricity price s h o ~ - g forecastin
e~
cial neural ne ,IEEE Trunsuctions on Power Systems, V01.14, 1999, pp.851
Fosso, A. Gjelsvik, A. Haugstad, R. MO and I. Wangenstcen, ‘Generation sched~lingin a
d e r e ~ l ~ t esystem:
d The N o ~ e g i a ncase’, IEEE Transactions on Power Systems, v01.14,
1999, pp.75-81.
[71] J.W.M. Cheng, F. , Galiana and D.T. McGillis, ‘Studies of bilateral co~tractswith respect to
steady state security in a deregulated e n v ~ r o ~ e n tIEEE
’ , Trunsuc~ionsPower Systems, Vol. 13,
1998, pp.1020-1025.
[72] Z, Yu, ‘Mixed integer sociat welfare maximization (MI-SWM) and i~plicationsin opt~mal
electricity pricing’, IEEE Power Engineering Review, July 1999, pp.53-54.
[73] ET. Singh, IEEE tutorial on game theory upplications in electric power markets, IEEE Catdog
NO. ~ 9 ~ F l 3 4 -1999.
0,
[74] J.W. Lamont and S. Rajan, ‘Strategic bidding in an energy brokerage’, IEEE T r u n s ~ ~ ~ i on ons
Power Systems, Vol.12, 1997, pp.1729-1733.
[75] P. She~idan, M. Flynn and M.J. O’Malley, ‘Generator scheduiin~with demand bids’,
Procee~~ngs of the IEEE Power Engineering Society, Summer ~ e e t i n gSeattle,
, Paper No.
2 ~ O S M - 0 1 22000.
~
A. Lusan, Z.Yu and F.T. Sparrow, ‘Market gaming and market power gatio ion in
regulated electricity markets’, Proceedings of the IEEE Power Engineering Society, Winter
Meeting, New York, 2, 1999, pp.839-843.
[77] Z. Younnes and M. Ilic, ‘Generation strategies for gaming transmission constraints:
d e r e ~ ~ a t eelectric
d power market be an oligopoly’, Proceedings of the 31’‘ ~ n n ~ ~
tional Conference on System Sciences, 3, 1998, pp.112-121.
and A. Papalexopoi~los,‘Reactive power pricing and management’, IEEE Tr~nsac~ions
Systems, V01.12, 1997, pp.95-104.
Nordhaus and C. Shapiro, Preliminary report on the operation of ancillary
eh o f the California Independent System Operator, ~ a l i f o ~ ~ndependen~
ia
System Qpe~ator.~ . e a i s o . c o m 1998.)
t paths, phase shifters, and efficient electricity trade’, IEEE
01.12, 1997, pp.749-755.
. Pang, ‘Strategic gaming analysis for electric power
Transactions on Power Systems, Vo1.15, 2000, pp.638-

I821 C.W. Richter and G.B. Sheblb, ‘Genetic algorithm cvolution of utility bidding s~ategiesfor the
competitive marketplace’, IEEK Transactions on Power Systems, Vol. 13, 1998, pp.256-261.
E831 M. Song, C.-6. Liu, I. Lawarrbe and R. Dahlgren, ’Optimal electricity supply b ~ ~ d iby ii~
M~rko*decision process’, IEEE Transactionson Power Systems, Vol. IS, 2000, pp.618-624.
Gibescu and C.-C. Liu, ‘Optimization o f ancillary services for system security’,
~

roceeditzgs Bulk Power System Dynamics and Control W - R e s ~ ~ ~ c t u r i~n gy ,m p o s ~1998,

~~s,
pp.35 1-358.
N.Allen and D. Ilk, ‘Reserve markets for power systems reliability’, IEEE ~ ~ u n s a c on ~~o~s
ower Systems, Vo1.15,2000, pp.228-233.
x Power System R e s t ~ and
c Dere
~ ~

.R. Bobo, D.M. Mauzy and P.J. Trefny, ‘Economic generation dispatch with responsive
reserve constraints’, IEEE Transactions on Power Systems, Vo1.9, 1994, pp.555-559.
agic, K.H.Abdul-Rahman and J.G. Waight, ‘Spot pricing of capacities for
and transmission of reserve in an extended poolco model’, IEEE Transactions
Systems, Vo1.13, 1998, pp.1128-1135.
[88] J.B. Cardell, C.C. Hilt and W.W. Hogan, ‘Market power and strategic intcraction in electricity
networks’, Resource and Energy Economics, Vol.19, 1997, ppiO9-134.
[89] T.W. Gedra, ‘Optional forward contracts for electric power niafkets’, IfiEE Transactions on
Power Systems, Vo1.9, 1994, pp.1766-1773.
1901 organ, R., H. Song, (2.4. Liu and R. Dah flexible electricity con~acts’,
IEEE %amactiom on Power Systems, Vol. 15,20
f9I] R.J. Thornas and T.R. Schneider, ‘Underlying technical issues in electricity ~ e r e ~ ~ a ~ ~ o n ’
Proceedings of the 30th annual Hawaii ~ n t e r n a t i ~ nConference
a~ on System Sciences, 5, 1997,
pp.561-570.
1921 $3.Oren, A.J. Svoboda and R.B. Johnson, ‘Volatility of unit commitment in competitive
electricity markets’, Proceedings of the 30th Annual Hawaii I n t ~ r n a ~ ~Conferenceo ~ a ~ on
~ ~ Sciences,
s 5,
~ 1997,e pp.594~60~.
~
(931 J. K m a r and G.B. Shebli-5, ‘Auction market simulator for priced based operation’. 6EEE
Transactions on Rower Systems, Vol. 13, 1998, pp.250-255.
[94] K.J. Green and D.M. Newbery, ‘Competitionin the British electricity spot market’, Journal of
Political Economy, 100, 1992, pp.929-953.
[SS] S.Borenstein, J. Bushnell and F. Wolak, Diagnosing market power in California’s
wholesale electricity ~ k of~California
~University ~ Energy, I n s t ~ ~ t1999,
c,
I Wolfim, ‘Strategic bidding in a multiunit auction: AD empirical analysis o f bids to
supply electricity in England and Wales’, RandJournaE of Ec’conollzics,29, 1998, pp.903-725.
[97] K. Miyaknwa, Analysis o f strategic behaviors in an open access transrrrission grid. MSc
Thesis, University of Washington, 2000.
ration’, ~ ~ ~ c e e $ oif~the
g s IEEE ~ ~ w e r
1, 1999, pp.568-572.
‘Advanced pricing in electrical systems. 1.
1.12, 1997, pp.48~-49~.
.N. Siddiqi and J.W. Zarnikau, ‘Advanced pricing in e k t r i c d systems. 11.
nscactions on Power Systems, Vol. 12, 199’7,pp.496-502.
[kola B.H. W m and ughman, ‘The economic efficiency impacts o f alternatives for revenue
nsactions on Power Systems, Vol.l2,1997, pp.1129-1135.
[1025 1.1. Perez-Arriaga, F.J. Rubio, J.F. Yuerta, J. Arceluz, and J. Marin, ‘Marpi
~raiis~ission services: An analysis of cost recovery’, IEEE Tramactions on RQWeV Syslems,
V01.10, 1995, pp.546-553.
[I031 DOE, Maintaining reliability in a competitive U.S.eiectriciQ industry, Final report of the task
force an clectric system reliability, United States Department of Energy, 1998.
[I041 C.-C. Liu and R. C istie, Energy Management Systsni, in Encyclopaedia of Computer Science
A. Kent, J.G. WiBiams, C.M. Hall and R. ~e~~~~26, ~ ~ ~ 11, p l

report for the power system outage that occurred on the Mrestcm
Interconnection on August loth, 1996 at 1548 PAST, Western Systm Coordinating Council,
~ ~ w s ~ c1996. . c o ~ ~
Competetive Wholesale Electricity Markets

[1061 ~ ~ Available
~ C , Capability Definitions and Determination, North American Ekctsk
Transfer
~ e l ~ a b i lCouncil,
~ty 1996.
[ 1071 A.R. ~ ~ r g and e n V. Vittai, Power System Analysis, 2nd Edition, senti ice Hall, 2 0 ~ pp.436-
0~
440.
. Ilic, T.Y. Yong and A. Zobian, ‘Available transfer capacity (ATC) and its value under
open access’, IEEE Transactions on Power Systems, Vol. 12, 1997, pp.636-645.
[ 1091 C.B. SheblC, ComputationalAuction Mechanismsfor Restructured Power Indusrry Operation,
~ l u w eAcademic
s ~ b l ~ s h1999.
e~~,
[1101 G.W. ~ o s ~ n w and a l ~C.-C. Liu, ‘Consistency evaluation in an o p ~ r a ~ ~ o~nnav~~ r o ~ $ n t
involving many transactions’, IEEE Transactions on Power Systems, v01.11, 1996, pp.1757-
1762.
[111] J.A. Momoh, R.Y. Kosselar, N.S. Bond, B. Stott, D. Sun, Papalexpoulos and P.
‘Challenges to optimal power flow’, IEEE Transactions on Power S’lstems, V01.12, 1997,

. Angelidis, H.Singh, and A. Papalexopoulos, ‘Consu~$rp a y ~ e nm~i ~ m ~ ~ t i o n

in power pool auctions’, IEEE Transactions on Power Systems, Vo1.13, 1998, pp.886-991.
[ 1131 D. C~a~opadhyay, ‘Daily generation scheduling: Quest for new models’, JEEE T r u ~ s a c t i o ~
on Power Systems, Vol. 13, 1998, pp.624-629.
Walsh aind M,J. O’Malley, ‘Augmented Hopfield network for unit commitment and
economic ~ i s p aIEEE
~ ~ Transucfi~ns
, on Power Systems, V01.12,~1997, pp. 1 7 6 5 - ~ 7 7 ~ .
Cliff Walton Robert Frief Dr Loi Lei Lai
London Electricity Group London Electricity Group City University, London
UK UK UK

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
t, 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
ve was developed for new connections to distri~utionnetworks
defining certain elements as contestable work, but to date this area has not seen the wide-
scale 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~aniesion ~ ~o~ue~dc ~ of
have c ~ d i ~ e the 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

, the
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
menls in ~ e ~ lpracticea ~ oand~the electricity distribution industry.

4.2. I ~ o ~ ~ e t iin~ Supply

ion
The development of competition in the energy supply market in the
develop~nentof two distinct activities in the UK public electricity suppl
and distribut~on. The supply businesses are responsible for the sale of e ~ e c ~ c iand t y gas
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,
n 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
respectively).

4.2.2 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
g providers
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^.

network. This
The distrib~tioncompanies manage and maintain the electricity d~stributio~
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.
 12 Power System Restructuring and

eration services organ~sationin London has been estabiishe

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

ive for separation o f businesses is a re¶ui~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
or
the position of the domina~thost supplier to the d e ~ r n e of ~ t custom~r§
comp~~itors. 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
te of costs
overheads to the d i ~ ~ i b u ~business.
ion 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
businesses.
ution business will in some way ~ o ~ g r the ~ service
d e to a custo
s ~ ~ p ~For ~ example,
er. the response to power o u ~ ~ ~ ~ .

ion businesses ~ e s u l t i nfrom

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

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

e§tablished at the time
e in resolving system-b
~ ~ sales.
r s ’ for e ~ b e d d ee~n e r a t ~energy
constraining s u p ~ ~ ~ esales
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 itoc 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 i o n for 1
c Q ~ s u ~ ~ tdata)

e s t i ~ a t ~for
s ) smaller (mainly quarterly

st o f a fixed portion or stan

11 Power System ~ e s ~andc Der~gu~atiQn
~ ~ n ~

4.2.7 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 ~ ine ~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 messages
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 gnpowert outages on its internal web site for so
make this facility available via the Internet once suitable security safeguards h
proven.

4.2.8 ~ a ~ ~ ~ int Metering

i t i o ~
Competit~on has existed in the 1 and 100 kW markets since I991 and 1994
respectively. Third parties have bee to own and operate meter assets in both these
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
t 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
t a meter reader.
This is a n a ~ apro l ssion in that meter readers could provide services for r e a ~ ~ nany
g
utility service meter. o n g - t e ~developments are likely to result in meters that are read
remotely.
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 lat~d
Market 1

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
e installed c a p a c i ~require^. wever, at a distribution ievel the wi
ating has resulted in pe mand occurring at nig

ated ~ a r ~ thee 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 system’s
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 bu§ine$ses.
recourse to modifying use of system tariffs to promote alternati
,the energy § u ~ ~ l imay
e r not be obliged to
any re§ulting ~ n c e n t i ~Addit~onall~
e~. 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 ~n§ta~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
~ ~ ~ be
a ~ a n g e must ~ 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 ~ toa tt~aditiona~
ive ~~~nforceme~t.
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
~enerat~on, ~an§mi 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
1

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

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

t in asset replace~enr,s ~ rein for^

§ ~ ~ ~
~ i ~ ~ b u tini oa ~n ~ r ~ g u l aMarket
ted 117
-

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 service.
l y is discus in the f o ~ l o w
s u ~ ~drivers section.
~~
on covers the drivers affecting planning
ncepts of p l a ~ i n gasset r e p l a ~ e ~ e n t

4.3.3 ~~~~~~~~

i o ~ design muse meet the following r e ~ ~ ~ r e m e n ~ ~ :

y ~ i s ~ i b u tsystem
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:
1

s Of tion of most gener~tion.

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

A ~ a i l a b i l i ~S :y s t e ~average i n ~ e ~ p t i oduration
n ) or customer minu~es

y ~S~~~~ or its e ~ u ~ v ainl e ~ ~

stem average i n t ~ ~ p t ~ eoqnu e ~ cindex
r 100 connected custo~ers.

These measures represent the average performance of the system and so do not a ~ c u r ~ ~ ~ l
ind~~idual c u s t o ~ e may
r e x ~ e ~ e n [2,3].
ce In the Of
than I minu~eis cou~tedtowards these statistic 3
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
n call centre
Ristribution in a Deregulated Market 11

re 4.1 demonstrates the relationship between incidents, ~ t e ~ p t i o andn s customer

minutes lost. This cl shows that whilst by far the most inciden~soccw at low vol~age,
the medium-vol~ge ) 11 kV and 6.6 kV systems cause by far the most c u s t o ~ e r
dis~ption.It is also siest area in which to improve network e r f o ~ a ~as c eere are
cos~~effec~ive 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.
o ~ e on customers is that r~sultingfrom ~ e ~ u eor
The most ~ o u b ~ e s impact 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
~on s
eved by the end of the second review period. During the third review
place in 199842, the e l e c ~ cindustry
i~ regulator decided to set targets for the e l ~ c t ~ c i t y
c o m p ~ i erather
s 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

Since deregulation, the U has increased the focus an imp

aspect of c~stomerservi rent approaches have bee
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
~o~e-mounted auto reclosers have been in~oduced in conj
intemptions a u ~ a ~ a t i c and y therefore sometimes considered as a form of n e ~ o r k
a ~ ~are
au~omation.
~ 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 ant
~ o n ~ oElec~ic~ty,
n 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.
a~ 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 ts 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
~c apparatus, be it overhead line or
swi~hgear.
 re, they can o p t i ~ i ~their
e e l e c ~ c a~~licatiQn
i~ sched~lingto
cost savin~s~n~~~the
In a d ~ r e ~ ~c a t ~ dve ~ power m ~ k e t utilities
, tend to maintai
12 Power System ~ e s ~ andc ~ ~ ~ n~ l~ a t i o

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

y 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
g 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
fore~asts,the mean absolute percentage error lies in a range o f 0.4~~.~% [9]. Load data is
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 ~ ~ for
o nc o m ~ u ~load ~g
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
on pa~~cularly 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
~T-relatedincreases.

businesses have adop a five-year p ~ a n ~ horizon,

sed d~s~ibutio1~ ~ng
l a r ~ ~ due
l y to the ~ve-yearlyreview period and the culties of predic~ing~ e m ~ d
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
vely
e tec~ologiesand s ~ c ~ or e networks must be
ieve this end are discussed in In tail in the ~o~lowing

asset management and planning is to integra~eas

replace men^ of poorly performi or high~riskasset
a ~ d e ~~ a r ~~ ewill
~gt need
s 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.

4.3.4 Long-tt?m
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
-24 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
es
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
na~ agencies.

d use of a set of 10
on ~ ~ s c u s s ethe
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 mic
ions encompassing a reasonable view of the effects of known de and

e s ~ a positive view of the dev~lopmen~

s p e ~ ~ c l view: 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
~~g n ~how is w o ~ l dimpact on the business.
e n v ~ r o n m ~and
e would look at a range of business factors, d
priate s ~ a t orc strategies.
~ A ~ ~ ~ l a tofi othe
ns
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
d

winess Factor 1 Business Factor 2 Business Factor 3 Business Factor 4

S c ~ n a ~1 o §~ra~egy 1A S ~ a 2A ~ e ~ Strategy 3.4 S ~ r a t e 4A
~y
~ c e n ~2i o Strategy I Strategy 2A Strategy 3 § ~ r a 4B ~ e ~
Scenario 3 Strategy 16 Strategy 2 6 §trategy 3 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
~ le

d i f f ~ ~ c software
nt tools exist to aid the esign of power s y s t e ~ ~ .
a ~ a ~load i c and
~ Row ~ ~fault level s studies and a few
c a ~ ~ ~ a t hols.
ion use a fa^^^ rate
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
nt and network p l ~ n i n g ~most a ~ t i s in
s s i ~ i ~ ci~iter~ace
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.

4.3.7 Risk Assessment

Risk assessment methodolo es are useful in any business and distribution b u s ~ e s ~ arees
sk assessment is applied at two levels, the business level and for
a ~ asse~smentsas part of the asset replacement p l ~ i n process.
~ n d i ~ i d uasset g
~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 UK’s Engineering Recom~~ndation PU5.
In planning individual i n ~ e s ~ e n trisk
s , assessments are normally con
likely ~a~~~~~mode f ~ i etc. ~ Major
~ ~ nee ~~ ~ failures
rk 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

4.~.8 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
y 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 ~~~s
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
12 Power System K ~ s and Deregulation
~ ~ c ~

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
in the i n f r a s ~ c ~planning
re 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
o v ~ levels of service. This is probably one of the areas most under pressure at
~ ~ p r existing
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.

4.3.9 ~ e ~Design
~ r k
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 customer’s 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
targets.
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 127

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 m apply to the installation of spurs to feed a number of
~ ~ also
customers at low voltage (LV) where no alternative back-feed arrangements from o&er
n ~ ~ oare r ~available
s 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 e ~
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
y 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.
nt 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 distributor’s ability to meet a customer’s 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
e of supply. At this level the automation inst~lIedc~n§istsof
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~. For
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.
 ~ ~~e r~e ~n l ag ~ i o n
Power System ~ e s t ~ and

Two levels of automa~onexist:

Via cen~ralc o n ~ Qsystems
1
Via e ~ b e d d e dsystems.

bedded automation systems suc as auto reclosers

ge-over sy§tems 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 bene~ts.
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
ed. could include
on of f a ~ ~ c~i re~di t all~wing
s ~ 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
~ornmu~~~cations requir~dcould be achieved by a ~ ~ m boef means r in~~~~ing:

Id produce many of the Same b e ~ e ~ tbut s , it WO

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
system.

r the following benefits:

e ~ u ~ cO ~r ~~I on
o acontrol
~ engineer§,
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
supplies f o ~ ~ o wa ~netw
g fault may in fume allow increase asset utiiisat~onby
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,
particularly with ageing oil- itchgear, as an operative does not need to be in
~ ~ ~vicinity. e d Thisi is ~ ~ ed ~by the possibilities for local cond~tionm~nitor
and rcmote indication of alarms 1e:elatingto possible hazardous conditions.

4.3.16 Autor~ationCase Study - Remote Control in London Electricity

se study considers the planning issues concerned with the 10 term d ~ v e ~ o p mofe~t
London ~ ~ e c t r i cnetworks,
i ~ ' ~ p a ~ ~ c u ~the
ar~changes
y m d e to i ve qua~ityof § u ~ p l ~ .
~ 5 ~ control and data acqui§ition system has been c
The ~ ~ ~ o d uofc at remote ~ 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.
r~~

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
increased.
h e s s w i ~ c ~ i ntogo
The remote o ~ e r a t i oof~network ~ w ~ t ~allows
e d often in excess of an hour i
an engineer can reach the a ~ ~ e c t area,
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
~ge was
s across the 6.6 kV and I I kV ~ e ~ o r k ~ .

d d e l i v ~as~much benefit as possible in the initial phase.

approach a i ~ e to
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
y's
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 two er ~ a t ~ g o ~~i e se ~ on ~w~ether
d i v ~ d ~into n ~ the ~ns s o~c i a t e ~
13 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 r the City of London.
~ e § t ~ i n s tand
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
was t a r g e ~ eat~modern SF, ring main units and some of the more m o ~ oi~-fil~ed e ~ units
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
approx~matel~ 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 on
the w o r s t - p e ~ o ~ i nfeeder
g groups, In turn this would allow up to 75% of be
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
supply. It is also necessary to know the status of the while a ~ e m p t i nto~ secure
~ i ~ sa fault, so remote indication had to be prov~ded.
s u ~ ~following
A one-in-two strategy was adopted as this was felt to be the m i n i ~ un ~e ~ s s to a~
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 ~ curvep shows the predicted p e ~ o ~ a against
n ~ e the b o t t o ~curve,
~utionin B I

0 2000 4000 BOO0 8000 10000 'I2000 24000

RTU P O P U L A ~ I Q ~

._.-_ _ . (HV)
trend. . " - . - ITrend.
- (Overall)
 estorafion performance

The original vision for the development of the initial remote control system was to create
an n e ~ o ~r ~~a g e m esystem.nt The advance , e x ~ a n d a b and l ~ to a l~rnited
ent RTUs were chosen ta facilitate this deve ment. The ~ ~ i i te~l ea m l e n ~of
the ans &realready being i m p l e ~ ~ n t e dAn . auto change-over ~ ~ e c h a has ~ ~ been
sm
i m p l e ~ e n t ein~the s logic to allow supplies at open poi to be r e s t o ~ in e ~1
1 ~ ~ ufo~~owing t e ~ ~ ~ fault.o r Thisk de~iversan
1 as the customer minutes lost.
expanded to deliver ated res~orationo f
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
. t unicate to a ~ ~ m b
than ~ n c in e less than a minu~ewill pose a s i g ~ i ~ c achallen nt
There are, howe~er,other aspects of network ana age
R W was specified to cope
d ~ o n i t o ~ nandg con the LV s y s t e ~via ~ d ~ ~ t i o n
to inte~acewith the
e developed to include discharge levels in cables and v ~ r ~ ~
i n ~ ~ 6 a ~ofo 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 rea§on§ for uti~~ties
to advance a u t o ~ a t i ~ofn ~ ~ s ~ i
mice. ~ e r e ~ u l a t i oisn evolving to establish some
o penalise utilities in case o f ~ o w - ~ u§ae ~ 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

s t e in
to c o ~ u ~ i c avital
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 re§tori~gpower sooner than ever before. i§tribution 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~ionwith

ns with remote

e ~ech~ology
require
134 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
, processor,
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 ~ cellular phone, radio, power line carrier, ~ ~ ~ p ~ e ) .
t i o(e.g.

4.52 emote mina^ Units

C o n s t ~ t ~involved
y 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
n purposes, small, low-power, w of, c o ~ p aRTUs
~t
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
communic~~ons 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 ~
a mission-c~tical system. odern ~~~A~ technology permits hi
processing and achievem of graceful degradation upon failure
works~ationsand personal computers give users ful hics d~pictionsof system assets,
often in proper ~ ~ o g r a porient~ti~n, ~c and prov very ex^^^^ win~owinto the
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
Risti~bu~io~i ted 135

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,
s custonier records, maintenance m a n a g e ~ ~ nwork
t, dispatc~,etc.).
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
io~ ~ A work with the actions
in the ~ C A must
reactions of the distribution system protectiQn equipment. Actions taken by the logic or
c o n ~ oa ~~g o r i t h ~ofs both $ y s t e ~ (e.g.
s protection and SCADA) must not compete with
r to cause additional roblems. Those applying distribution a~tomat~on to
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
Ie 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~~onsbetween buses or substations.
~~C
ddit standard power system SCA

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

ed 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;
p
former load ~ a n a g e ~ e n t ;
supply interruption reporting and outage management;
fault ~ o ~ a ~ i a n ;
t~ansfero~timisat~on (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 ;
dis~ibut~on short-circuit analysi~;
d e ~ ~ d - s i manage~~ent
de - 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.
4.5.4 Softwui-e F ~ n ~ ~ i o n a l i ~
1st the ~ a ~ d of ~ A is of gr
w a~ Se C ~ system
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~~g-

ompete 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 ~b s ~ ~

es ~ o p o l o ~p yr o b l e ~ much
s 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, ~ and

4.5.5
~ u n i c a t i osystem
~ u t ~ o ~is
for ~ ~ s ~ b auto~ation
s ~ i ~ e rrece~vers
s, and data links. The s y s t e ~s h o u be~ ~desi
nt~nancewill be as easy as possib~~. ~ersonnelwill have to b
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
also i ~ c ~ theu ~likelihood
e that the s y s t e ~will remain
and a ~ ~ o m ae~~i uo i~p mdeveloped
~~t in the future. This
a n ctoethe u t i i i ~ .
~ ~ i n ~ e ~costs
deve~opapprop~ate0
k m a n a g e m ~analysi
~~
roached by each u ~ i i ~ .
 i oanDeregulated Market
~ i ~ ~ r i b u tin

There are several aspects of O& for distribution automation to be considere

include:
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~
io~ 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
ng the
and impossible to into fbture techo
addi~ion,an inexp solution i s needed
emote monito~ngand control.
nications ports with
n-line con~guration.
~ number of points while ~ a i n t a i n i ~real
~ d l i an large g
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 smissio~networks
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
s

01s for p~anningand o~timi§at~on

studies.
faces to fault maiiagem~ntand custom~ri n f o ~ a t i Q n

and map h an age men^ systenis.

Systems ~ n ~ g r a t is i ocritical
~ to the success o f any ~ e ~ e c o m m ~ ~ i c a tand
i o nns ~ ~ ~ o r k ~ n
~ e . most sy~temsare not developed in a vacuum, ~ntegrationo f ex is^^^ or
i n i t ~ a t ~ Since
essed. This ~ntegrationmust be
o n s which ensures that ex
r ~ ~ u n ~ c a t i level,
of working in the new system to e n s ~ integr
e
applica~~ons level, which ensures that ~ n f o ~ a t ~genera~ed on an
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 organisation’s 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
l 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 ~erificat~on that
what was specified and procured has been delivered, testing of system co~ponentsand
ap~~~ca~ and n s ~ that the system satisfies ~ ~ n p l e ~ ~ tr ~a ~t ui ~o r~e n i eand
~ oensuring ~its
r e ~ l a t guidelines.
o~
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 n is more a
col~ec~or,r e p o s i ~ o and ~ transpo~ ~ e c for~ i n f~o ~ ~ ai ~ i o~An . w~ d
i n f o ~ a ~ i system
on 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 ~ sc~edules
~
are prepared in advance and operations can be a ~ t ~ n i a t i ~ ch a~ly
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
n 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
differs from an energy management s y s t e ~( whose primary ~ u r p o s ~
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
ng ~ 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
, The common information el has a data structure that is c
S p r o ~ r ~ esystems.
ta~
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) i~ calcu~a~~ons. ~ ~ e r mar t e ~ ~
ge ~ ~ T will ~ beL used ) to present i n f o ~ a t i o nto customers.
d by the transmission services i for customers to use to request
~urchasesfrom a provider. The col ( ~ T T Pi s ~used for data
Distribution in a ~ e r ~ ~ l a t e d - x

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

c 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
can also i ~ p r o v es y s t e ~reliability, will also allow ~ i ~ e l y
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

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

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

c o ~ m ~ i c a protocols.
~~on
ay an ~ncrea§inglyimportant 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
~n 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

r~l~~ionsh~~s.
~ o ~ ~ u n ~requires
~ a t ~~ aon sn~ i § s i channels,
on which

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

~ e ~ ~

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 carrier’s 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
g
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.
~ ~ s ~in ab Deregulated
u t ~ Market
~ ~

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

e t chQsen as the d a b link layer because of its predominance in the

~ t h e ~ was
e subsequent availability of low-cost imp~ementationsand assoc~ated
s b ~ d g e sand routers). In addition, the scalability o
o n s fairly common and 1Gb Eth
i i ~ p ~ e m e n t a ~being
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
As it was d e e m e ~desirab~eto be able to access data device, two solutions
: Transmission Control P r o ~ o c o l / I n t ~ ~
PrQtOcQi
et
TCPlIP is a networ
n t e r c o ~ e c (OS).
t
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 sub§ta~ionLAN. th network layers s u ~ p the o~
ng a message for all devices on the to hear. This f e a ~ r eis very
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

e shared with others. Fo ay makes measurements of voltage, current and
owes on a monitored hr 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
Qr~anis~tional needs of the organisation. An evaluation of the existing staff, roles
r~spo~s~bilitie§ 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
nt
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
c o ~ u n i c a ~ i osystem
n to trmsniit control and data signals between control c e n ~ e sand a
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
ies 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, y. 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,
on 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.
~~~~~t~~ eats
The c o ~ m u n ~ c ~ t iroenq ~ ~ r e m efor
~ ~ distribution
s automation depend on the size,
complexity and d e ~ r e eof au~omationof the d ~ s ~ b u t i osystem.
n In general, it is de§irab~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 ~ 1

There is no i ~ ~ e r ~ ~ t to the further dev

ations. It can be

the isolate^ area.

 tec~olo~ provides
y 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
. ~ecause
ogy can monitor deviations from establishe
f possib~et a ~ p e ~ n Variable
g. rates can be
f debts ( t ~ o u g flexible
h t ~ be e
p r e p a ~ e n can
an empty b ~ i l ~ i nremote
g, disco~ectioncan take place with complete c e ~ a i ~ ~ ,
~ u ~ hnew
e r tariffs can be quickly and easily p r o ~ ~ into d ~ ~ s t 0 ~ eete
~ eany r 9ers
down the wires whenever required. The data can be ~ a n s f e ~ einte~activel~
d throu~hthe
e l e c ~ ~dc~is~~ i b u t ~system
o n to the dis~ibutor’so
supplier and custo~er.~ i n a ~ c iapp~ications,
al suc
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
ns
the ~ong”distancetrunk lines of the telepho~ee o ~ p ~ i eThe s. s
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
n 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 ~~ ~ ~q ~c
Innthis
bm-way c Q ~ ~ u n i ~ a t i Q s . case fault detectors must c o ~ m ~ i c wi
a~e
cisntrol centre so that the fault location cm be d e t ~ ~ ithen ~ , must
~ e signals

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

flashes, ~aultsor switc

1
Free Space External
Free Space Yes
Optical Fiber Yes

o f the ~ u r n obf us
~~
I lation

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

e d ~ tot see~ if there is ~ ~ h

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 to add ~ o ~ ~ K

from Scratch, For example, w feeder monito
Dis~butionin a Deregu~ated 1

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
a t i ~ ~to design a s
media. Fiber allows the c Q ~ u n ~ c engineer ~ 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

ee
~ 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

a~~ s : IEE Proceedings - ~eneration,Transmi.~sion and
s e ~ ~ c e i ~ t ~r e~s ip~~e ~i t~isector’,
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,
~ s ~ 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
o~ Project: Defining output measures and incentive regimes for PES
dis~~ihutioi~ 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 ons
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
s ~ ~ Transact~onson Power Systems, Vol.15, No.1, ~ e b 2000,
neural n e ~ o r k IEEE ~ pp.263-
a ~
268.
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’,
E~ ~A p p l ~ c~a t i oin~Power,
~ July t1999, pp.2~~31.
~ r
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
n sPower, July 1999, pp.36-39.
~ p ~ l i c u t i ain
-
11188-3: I994 ~ f o ~ a ~~i eocnh n o ~ ~o n~t e ~ a ~ i o Stan nal
~ o ~ TJpper o nLayer equirernents Part 3: ~ ~ n i n iOSI
~ al
[I61 aha and W. P r ~ ~ e ~Object l a ~ ,Oriented Mode
tions, Prentice Wall, 1998.
i e s , and Result ~ o c u ~ e n ~ a t i oEPRI
est M ~ t ~ ~ o d o i o ~Setup, n ’ ~ S~onsor~d
hernet for Protection CO ersion 1.O,May 1997.
EE ~ o r ~ i i Group
ig on 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,
1 this risk i s e x ~ e ~ e hl y
f ~ a n c i atools
l that can be of help.
of b i ~ a ~ contracts
ra~ (and various other ~nancialdeals on the
P faces not only an increase in o~era~ional d ~ f ~ c u l with
~~es
also a c o n ~ indplannin~ ~ ~ as the market need far ore
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
r 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 ewayn t as inten
with the in~Qductionof compet~tion.

The e i s ~ s isi one

~ ~ ~~ s ~~ system ~~ of~ the
~ most c complex c o n s ~ c t system§.
e~
to tbe e ~ t e ~ as lt ie~~ i from o n imple
n ~ the opera~ionof the ~ a n s m i s ~ ~system,
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
~g of

r e shows the evo~utionof the role of the TP in the industry (as at the time of
~ i ~ u5.1
writing).

~ ~ 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~ stands
~ alone
Y and
~ 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
al 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
r . ~ e s two
s e ~ i ~~r oev ~ d eOf e only the function of market
e r TP assumes full financial l i ~ b i l ~ ~
As a service ~ r o v ~ dthe
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

~y 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:~ ~ ~ ~ 0 ~
Trans~issionExpansion in the New E n v i r o ~ e n t I57

where
e a m o u ~ot ~ i n s ~ l l generation
ed capacity at node i and tec a

,? : ~~e~ capacity for line 1

the ~ ~ o uofn ~t n s t a transm~ssion

1;' 1 the rate of i n v e s ~ e nin

t generation capacity using t e c ~ o ~ o (gI y
fa ( 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
m flow on line 1 as a function of the a ~ o u nof
t ~ns~~le
~ i s § ~ co anp a c ~owing
~ ; to secure c o n s ~ ~&max ~ t s <<~K,

rresponding cons~ain~§.
The o p t ~ ~ ~ ~p ~ e ~ is the longer of two time ~ n ~ e ~ov
e r§~ oa dtT~~ino ~~ r o b l (%I)* aIs
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,P,Jt), 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
hlp e ~ ~ and the balance o f the costs
the i n v e s t ~ timing
er time, the value of different ~ e c ~ o l o g i at es
produce powerl and C o i ~ ~ ~ e m e no ~~a~K e~ ~ ~e capacityr a t i ~and~~
There are two n ~ ~ ~ c features e a b ~~~o n s i ~ ethe~ i operation
~g
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
G
on ~ ~ based on ~ costs e .,ag ~ e,,',, Owing
6J,Tand ~ to ~the ~ o n~ ~ lthe~ x j
~ nthe p r o b l e ~is not readily available, and thus the actual o p ~ ~ aand
s o ~ u t i to t~o~
m are performed s u b ~ p ~ i min~ lmany ~ y cases. Further, since the rate
nt is d e ~ ~ r based ~ ~ onn 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 ~ ~
15 structuring and Dere

ln the passive phase the TP exists as final authority in

act~v~ties t e the ~eneration
s e ~ ~ afiom dist~~butionsectors
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 ~
ene
e
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
al and sellers make bil
~ i t h disclosing
o ~ ~ the
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 t s ~odel.
~ the
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
e~a~ model
Tr~smis$ionExpansion in the New ~nvironment

Mandatory system operator model

~ i t i a ~ml y~~k ept a ~ i c i p bid
~ ~ supply
~ s curves to the TP, although a
be made to include elastic d e ~ a n din the f o ~ u l a t i o nfor
~ the rest of the
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~ mix
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
e by m
acc~ptablelevels of reliability. Figure 5.4 shows the basic schematic o
model.

UlU

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

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

(5.1 1)
i,o i

i $ a tini (5.8)
The ~ ~ ~ ~ ~ defined o ~
. The result of solving the
(5.12)
 § i o n in the New Environment
~ r ~ § ~ i ~Expansion 141

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.
f ~ c i ~opera~iQn
nt of the ~ s m i s
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
~ ~ issfar s ~ a l l e r
v ~ o loads

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
1 Power System Restruc

TP ta ~ d d .Therefore, the ~ a n § ~ ~ § § i
level the rate of re^^ reg~la~iQn,
l , TP sets the bundled energy and tran§mission price that ~ ~ n ~ ~thei so e §
m o ~ ~the
~ ~ i sthe ~ system iQn i
i n ~ load at each given instant. The ~ a n s ~ ~ s srevenue
first cut is specifie
to consumers and to sup
and the c o ~ ~ u t e
u§age 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 ~
s as a service provider, As a service p
e charged to each bilate

n , is
under strict r e g ~ a ~ othere

act more custQ~ers.

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

etter control d e ~ the
~ ~1TCn can e

c o ~ i ~ i ton any
g major transmiss~onprQjec~
the
e 5.1. In the wti

only when th
~ i s s ~ o$ yn $ t e cong~~tion
~
e ~ ~ cost gof the ~investment.
~ Asa ~
1 structuring and Dere

ystern because of the ineffici

high, some users will choose EQ

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

maker.

5.3.I I ~ c e ~ RGal
~ ~te Des
ve

ows and thus r

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

lator of the ITC’s profit

ITC for a higher ~ ~ c in~efficiency.

~ a ~ e
 The ark et- base^ usage charges are commonly referred to as conge§t~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

L'
i
(5.13)

where ,u,f 0 if and only if FXP,, PL) = F;"'". For si icity, we use DG power Raw in
u t ~ gthe flows on each line in the system. e DC power flow equations in
ix notation are written as
(5.14)
where &isthe voltage angle vector, Taking the first derivative of L with respect to Pi,, and
it equal to zero yields

4- &(t)= A ( t ) t i (5.15)
I

Suppo§e the generation cost of supplier i, ciPa,is a quadratic function ofthe ou

(5.16)

Then, under the perfectly competitive market condition, the optimal s ~ p p l y

i, b,,, is the marginal cost bid given by

(5.17)

~ gsolution in (5.15) and the supply bid in (5.17) the system

~ a t c h the
price at node i, p, and the dispatch amount, P,r,,as

(5.18)

Finally, the ~ a ~ s ~ i srate ~ by the difference in the ,q, i.e. =,q -4.
s i iso set
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
g nodes into zones w ~ e n
ectat~Q 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
c e limit c ~ n s ~ a i ni,e.
~ i t e ~ a flow , ower flow on any line I along on^^ the ~ ~ ~ g e s t
~ sthe
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 ~
ccQm~odat~ng b~latera~ ~ a d as~issi ~ ~ u s ~ aint ethe
d su~sequentsection.
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~
some
, measure
~ gof base-load capacity needs to be ~ v e n .
practical approach is to compute the access charges based on a coincidental peak
nsu~p~~ o foloads.
n The ‘12-CP’ method [3] i s one such approach. The p o ~ i o nof
a1 access fees is computed as

i
where S,(t> is the load i’s 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
for
transmis§ion ex~anding.In the subsequent section, a market mechanism called the pr~ority
i ~ s u r a ~ service
ce is d ~ s c u s s ein~terns of compl~mentingprice-cap regulation in o
~rovidethe right set o f incent~vesto e ~ a n c the e t r ~ s m i ~ s i so yn s ~ e ~ ,

The driving forces of dere~lationaim to establish a more c o m p e t ~ ~market ~ v ~ in

achieve lower rates for consumers and higher ~ f ~ c i e for n c suppliers.
~ T~ough
trades, consume^ can establi§h 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
n~a~ount
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 ETG’s abi

o ~ is a physical system, the 1TC is able to honour and e x ~ ~ ~ I ~

Since the t r a n ~ m i s s ~grid
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
168 ~ nDeregulation
Power System R e s ~ c ~ and g

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

the replacement resources in case of ~ n t e ~ p ~ dieo n to
s either the
ent or ~e~erator-re~ated contingencies,
o ~oft genemlity all bilateral contracts consist ofthe fofbwing s
W ~ t ~loss
q ~ n t ~oft ye ~ e r g ytransfer
injection point and the c o ~ e s p o n zone
~~g
J’,z : the w i ~ h ~ point
a w ~and
~ the c o ~ e ~ p o n d zone
~ng
enalty payment by generator i for generator~relatedcontin
ante.

in the spot market of zon

e ~ a t purc~ased
~o~

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

d the upper bound g~venas ~~~.

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

In r e a l - ~ i ~oper~tion~
e the ITG determi
relieve ~ a n ~ ~ i s §con~estion
ion along with
as long as the market can take it. s creates an a ~ a c t i v eincentive far
ss~on~ y s t ase ~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
w~liin~ness to take the ITC’s 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~ e
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 in

insurance services on transmiss~one x p ~ s i o n .

5.3.3 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 s ~ o n This ta
n g s ~ s t e m a t~i ~~ s r n ~ §expansion.
Qf ~ s e dITG § ~ c ~ r A e .fo~ard-look in^ ~ a n s ~ s s i o n
S t r § on ~re¶uencyand r n a ~ i ~ of
of its c u s ~ o ~ ebased de
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
n 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 n
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 ~ ~ ofe ~users

s
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 ~ ITC
~ 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
v~l~m is ei r n ~ o ~ in ~ nmaking
t investrne
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 ~theo nre~iability
, is explic
i n ~ ~ ~ ~ p xq
t i by s ITC over the contra
o nthc
valuation and may be solved us
spect of pricing is ~ e l a t i ~the
g
activities. Because the mount of
~ c t ~ bcl e, as
~ well as the rices at the spot ~ ~ kthere e ~ ,
es
Transmission Qpen Access 173

e either set or ~egulatedin ac

a
~ r e a s o ~ ~ borI e‘fair’ i ~ its cost.
q prooft ~ a r gabove

r e ~ u to~ operate
r ~ in a manner that m i n ~ m i s ~odv ~ r a rl ~e v e ~ u ~

~~~e~c ~ the ~~~~~~0~

~ to serve~was often
~ s m
~ g
concept was usually r e p ~ a c eby
 174
-----._.__ - Power System Restructuring and Deregulation
__I

~ove~ment-owned 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
do a ~ e ~job e rof ~ n n i n gthe power ~ n d u s t ~ ,
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 ~a~~~g
lace i n e ~ ~ c ~ e n cIn~ eothers . 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 entities
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
e ~ol~~ile.
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
~u~to~~rs.

.1.3 ~~s is^^^^^^^^

~ n ~ ~ n d~~ ei nng e ~T ~~ at ni s~~ ~ihznd ~~n
the variatio~sdis~ussedab
amms in certain respects: (I)
s e l e c t ~ oof~~ n e r sources,
~y rangi
cost r ~ s o u r ~to~others
s 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
r e ~ o n ~ to~ f~~u~ ei c ~asoan
~ h ~ r e f o must t $ ~re
n i n ~ e ~ r aand
dion in the gen~rationand ret
mission system and ensure
~ e to all power
e q ~ ~ t a bbasis
~ ~ ~theofocus ~ ofe attention
s
field’, and the rules for managing access by
~ ~ s ~ r i m This i ~ acha~ter
t ~ ~ focuses
. on this c ~ subject,
~ ~ ~ a ~
 nal, state, provincial or independent generators coexist. In these cases the
are murky and are in a process of rapid ev~lution.
~ e c h n i inte~e~ationshi~s
c~

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 Iea€yan
on in many f a s t - ~ ~ nsystems. g T
~ ~ r a c~ ~e e~are~ eoften ~ as an economic incentive to investors.
e ~in force

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~ ~ ~ ~

p ~ ~ is~to sell to an ~nvestor~
e ~ o countries 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 ~ .

Where the trans~~ssion netwo was state owned before r e s ~ ~ ~ o~ n g ,

i n t ~ g will
r ~ ~be r ~ ~ n ande d a d ~ s ~ i n e ~between
on owner and operator is r
SA, f o ~ e er ~ e c ~ ~t c ~may ~ sell
i off
~ ~ s assets
their~ other
~ 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
o~ 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
~~~~~~~~e~~ $~ste~ at^^ to Q ~ e r athe
t ~t r ~ s ~ ~ ssystem,
si~n
 markets are e s s ~ n ~ a lsl yh o ~ - t forward
e~ ~arkeEsi
serve toad and loads bid for the opportu
c ~ two ~ ~s t i n ~c ~~~ k eday~~ sahead
: ~ t ~
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, ; may
~ t Q a~unit
Iy one p ~ t h o ~ a~~hj d~ ~~~y e r ~s ~m
o ~b l ~~ i~ ~ ~ ~~ebids.~ ~ f o
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
d~~~~~~~~ e g occas~on
, p r o v i ~ ~a sc ~ ~ ~ ~ t i t i ~ ~
ta adjust their day~aheadsched~Iesin the lig
g~n$ra~ors
- ~md ~unit status.
s ~ ~load~forecasts ~ n

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

151.
Transmission Open Access

e s a few alte
1 the new ~ a d i n g§ ~ c ~ rinto

ion system is ~ ~ n ~ a ~ l y

I
a
T r a ~ s ~ i s s ~Open
o n Access 7
1 ower System Restruc lation
 ~ e no i ~ ~ e ~charges
ostage stamp ra~e,and ~ h e are ~ ~ ~if npower
a l is ~ ~ s p o ~ ~
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 ~ r ~ de
n e ~e owill
s a c ~ o at
~ sv ~ times
~. ~ ~ ~ s
cb line I;a meet the
n, the load of tine j
 For each transaction, the rel~ab~Iity of ~ ~ ~ s m i swiths ~ oalln lines
but linej in $ e ~ ~ care
e , first calculate^. The r e ~ i a b i bl ~e n~e ~RJ:Ti
t
~ a n § ~ c T,~ ~isoc~lculated
n n t ~ a n s ~ fai~ure
as the i n ~ r c ~ e in ~ ~ i o ~
c ~the line. Similar ~ r o ~ ~ ~ are
a ~ s e n of te~ o
~ ~c ia t~i ce~s ~ina respect
s ~ jo, ~all
ect to line j . The e ~ b e d d e dcost of the ~ r ~ s r n i s line
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

d to c o ~ p u t ep r o ~ a b i l of
r n e ~ ~ oused i ~ ~ansaction is in itself not c e n ~ ato~this
example, the failure probability o f ction may simply be taken as
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
~y i
~ e d a cut set eth hod [Is] or B ~ o ~ d ~ prt ~ o ~ a ~
e ~ ~ r circuits,
le for ca~culat~ng this a v a ~ l a b ~ ~ i ~ .

efits in a ratio which has to

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

i 1
It § ~ ~ ubel dnoted that e ~ b ~ ~ ~d ae ~d § ~ ~ costs o ~ to ~ n c ~ u d~ea c ~ ~ isue
i s s iRave ~ie§
~ ~ t ~ear and shun~§eriesc acitors in additio~to
ers, § ~ ~ s ~ a tei o~ nu i p m switch
n and cables.
~ a n s ~ i s s i olines
and d~~ferent m ~ ~ ~ rno d s

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

o~~~
ewices, as i o the case in s
~ c ~ ~ , and customer-
d with time of use, g ~ o g ~ p h ~uantj~ative
s ~ c ~v ~i ~~a ct i o in
n s~ ~ n d .
A brief ~ ~ s of the c ~ansm~ssion
~ ~ ~p r ~~c ~ nin~ g the nNCC, rovide~f17] in this
subsection.
The NCC i s altow to cover the costs of its assets but the ~ o s t sof
cO~§~m~~§~
is the price quoted by e nlo§~e ~ p ~ n s ~ ~
generator which is ac dis~atchduring each half-hourly time slot w ~ e n
transm~ss~on constraints - simple u n c o ~ s t r a ~ e
dispatch,
d
dc ~f“lassof ~ 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 d c a ~ a expected
~ the c ~ ~ to be a
order to encourage capcity offers from generators the pool purchase pmce
~ ~ by a u~g ~ e n ~t ~ nSg ~ with ~this ~ ~e ~ b ad b ~ ~ ~ t ~verage. y ” w ~ IF ~gh~~d
~ t o ~ s e tl e ~ ~ ~eind the u ~ c o ~ s ~~ i as ~ anbut
s ~ e n~ ~ ~is~a alseady t ~c preve
~
enerating owing to € u ~ n § ~ i s sconstraints
io~ or other factors the generator
n compe~lsato~ pay , This p a ~ e n consists
t o f the ~ ~ ~ ~ $ s e n c e

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,a
of-merit g e ~ e ~ a t o~pera~ion.
r Constrain ts, out-of-merit paym
ges, ~ ~ n s ~ i losses, o nup ~ ~ s ~ s
s ~ ~start
and ancillary sewices c~argesare passed on to c o n s ~ ~in~ the e ~~~~~.
s
e u of the market is simpler: a11 energy is puscha$ed at the pool selling
The ~ ~ s t o m side
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 ~
~ § ~ ~ ~ ~ ~ + ~ ~ l l

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

poiiy p o § ~ ~albeit
~ o ~regu~a~ed,
, the
ta ~ r o v i ~aaequat~
e srnission access are
~ o ~ s ~ ~Fur s . ~ea§onmd since average ~ 1 ~ ~ c a t of
e rthis ~ Quplns
~h~~~~to d ~ ~ users, e ~ ~ 11% ~ the prima^ focus of con
n been
~~~~~

share the costs of o ~ e ~ a thet ~ system

g and bear not
but an ~ ~ e ofr the~ OS& g ~i n c ~ by ~ aall
r is ~ ~ - e these ~ s ~r ~ n~ ~~ n t ~ y
x ~r o b~ l ~~and
2
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
es~ 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 servicesi which~the ~ a ~ i~a is responsible for p r Q c ~ ~ incl
l ~ f o r nIS0 ng
inning reserves, AGC, replacement reserves, voltage supp
start. The first four services can be procured by the ESQ through d ompet~tiveauc~ons
or be s e ~ ~ - ~ r o by ~ i ~users,
e d ~ ~ w e s~lf~provision
~ e r ~ is li to ~ a n d a ~or # ~
c o ~ ~ c~ ~~ na gl e m kThe ~ ~of”all. anci~~ary
e ~use services, incfud
the exclus~ver e s p o n s ~ b of i ~ TSQ. ~ l a c k ~ §capabili~
~ ~the ta~ 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
ed are
. 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 ~
associated. This is intended to reduce of frequency deviations ~ ~ ~o~n g
power i ~ ~ a ~ a n cIfeas generator
. can e the required primary r e s e it~ m~ ~ s t
from other ge~~era~ors. On the othke procure~entof AGC service is
~ o ~ a ~ c t~m ~ o~n ~ p~ e t ~ ~ ~ ~ ~ ~ ~

.7
n is not a new prob~emin power s y ~ o~p ~e r ~~ t ~and
~ o n g e s ~ i o[21] o n was a r o ~ t ~ e
~rob~em for the ~ y § t eo ~p e r a ~ oin ~ the t r a d i ~ o nsystem.
~ In
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~ o nps ~ o b is~ e ~
c o n ~ a c~t ~ s ~ c t ithis
more d ~ f ~ c utol tsolve since these contract transactions introduce additional c~nstra~nts on
the system o ~ e ~ t o For r . example, c u ~ a i l ~of~ an ~~ilateral ~ ~ s a c t i o~equires n
s i ~ u l ~ e o andu s equal reduction at the entry and exit points, All this makes CO
~ ~equiresa comb~ationof ~
~ a n a ~ e ~ae ~nhta l l e n g ~p ~r ol ~b ~ eand o pri ~ ~ c
o p ~ ~ ~ respo~se$. ~ ~ t in t r ~ ~ ~ i sope~ation.
o n a ~ It i s perhaps the t h o r n ~issue s~on

Boot md c o ~ ~ amodels
ct are s e ~ ~ r a t addressed
e~y first and an app~oachto reconcile h t h
models i s then explored. Conges~i~n ma~agement issues without C o n s ~ d e ~ ~ tof
~Qn
c o ~ ~ n g e n c y / s e c uproblems
ri~ 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

d built on spot p ~ theory
~ ~
~ elasticity effects md the signific
[I I] and in its simplest terms, ~ e g l e c t i nprice
location, the dispatch a ~ g omay ~ bet ~stated ~ as:
subject to:

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

e~~s ~ 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 t e dflow equations. L is a ~ ~ s m i s s loss
d of a ~ g ~ ~ nload ~ o n~ ~ ~ t i o n ,
Gi.ma g ~ n ~ a tioer a ~ and a 2,~ the
~ ktfi
~ o~erat~ng l e leads
c o ~ s ~ ~~ n~t .o b(6.2) ~ to the
o ~ ~ ~ ~ ~e o n- d ~Tt i o~~ ~ :c ~ e ~
s o l u t ~ and

Mi

l ~the c
af y ~ i a bon
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
provided.
d i s ~ a t c h all
~ s r e q ~ e ~ansactions
s ~ ~ ~ and makes
Transmission Open Access

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

ik z' E I,; i f

subject ta:
 i s the desired or target YaIue of

a u g ~ e n ~ ebyd a set of contracted tram

t s (6.4) are an extension of the
~ n e ~ ~ a lci toyn s ~ i ~ in
c o n s ~ ~ ~augmented
nts 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 ~ o ~Tks the Mh

~ ~ s a c t and
bifaterallmultilaterl t ~ n s a c ~ i o nPpL,i
, and ,j 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., ~ . BTkJare, r ~ ~ ~ c ~power
v ~ land i v e~~~ yj e~c tat ~ i Etnd
i obus
owe^ ~ x ~ j ~nu er
~at bas ~ ~ ai ~ soa c t~iTk
~,n PLT,
,; is
bilaterallmultilat~~alpa~icipantsto make good transmissio~
Section 6.6.4).
In actual ope~a~ion of power systems the ~esponsibili~
u ~ ~ ~ all dispatched ~ansactions. Twa
d ~ s t r i ~between
~d~~~~~ in [29] but for s i m ~ ~oni ~ i ~
by pool ~ ~ nis c ~~ ~ s~ ~ dhere,t e r ~~ d o ~

T*,i =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.
o n sbe s ~ ~at ~ ircdes~red
~ a n s ~ c t ~will e ~ value and the ISSO only ~ i e e to
~ sop
~ i s ~ aandt ~ ah ~ ~ ice^.~ l ~ ceaa s ~~ ~ g~~ to ~ dy ~ ~a d~ ~eOPF
~ ~o~ n0 1~ ~ 0 ~ ~ :

T
PPL a PPPL (6.6)
subject to:

where is a c o vector
~ with~typical
~ element ,which is the
~ pppL,i
and bid price for this pool power; i s a vector of pool powers with e ~ e ~ ePPLI
~ts
~~~~~~ we the c ~ v ~ na b ~of ~e sthis~p ~~ ~ ~~ ~ e ~ ;
values of pool ~ o n s ~ n ~ and ~ ~ ibilaterailm
on~ arrd e x ~ ~ c ~ i~~h
on
elements DpL,i, Pq ,i and ,?Iq ,j , respectively~ tors o f r e a ~ t ~ ~o e~ a l
~ ~ w ebusr, v o l ~m ~ e a ~ ~ and ~ ~~~e~~
~ e sr~s~ectiyely.The ftrst ~ o ~ s ~ ~ n t
(6.6) is the c o n v e ~ t i o ~load
a ~ flow equation set plus the set of n o ~ power
a~
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.

~ ~ s a c t i in s would result in the violat~onof operational cons~a~nts.

o ~full The f o ~ l ~ w i ~
dispatch ~ r o b is~nowe ~f ~ ~ u i a ~ e d :

subject to:

T)=

e first tern, within brackets, in the above objective r$pres~ntsthe net pool w ~ ~ f a r ~
pPTis a columi vector of elements ,the ~ a ~ s m i s charge
s ~ o ~for d e ~ ~ v PTkj
e r;~ ~
yo,, i s a c ~ vector
~ of e~I e ~ ~nn t s ~ . ~ ~ L ,where
i ~ woPLJ is a w ~ l ~ i n ~ ~ ~ s ~
pL,j =(D:L,i - D P L J ) ,the pool customer shortfall, w h ~ D~ &e j i s the
r e ~of
~ e s ~value s 5 B& ; y4. is a c
and s a t i s ~ ~DPL,] o v ~ ~~ of~ e~
o ~r e ~~ ~ ~
-
(w,,,,, AP<,~1 wher~ whs is also a willingness-to~pa~factor ,i -
 ,[ and satisfies F$;,,! 5 P; ,i .
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
t a ~ ~ ~ m the o d a of~ ~
~ interests of and bila~erallmulsitaterd
p ~ c ~~~~n~ ~ n . is, any p ~ ~ ~ ~ j ~bea w
~ cpo ~ g~e s t ~~That n ~t l ~ i ntog make ex^^
~ ato avoid
~ c u ~ ~~ ~ m eThis
n~ t .a ~ ~a ~ g ehas
t ~ to e ~ the IS0 in a d v ~ c e
e ~bet ~ g r e with
and the 1S0 will d e t e ~ i m ~ ~e g n i ~ d for o ~factors in order to ration
e s the w i l l ~ ~ e s s - tay
~ a n s ~ ~ s saccess
i o n accordingly.
The first c o n s ~ in~ rob^^^
t (6.7) is ~ ~to the~ 5rst ~in ~ a~ ~but6r with ) 9
,r ~ s ~ ~ ~The v ~ c~ oy .~ ~in~(6.7)
t ~second ~ n t
b a ~ a equations
~~e and
ntract model. Th
bilat~r~l/~ultilatera~~ ~ ~ c ~ pina advance.
nts The i
~ ~ t e ~ of o in n e ~ u a ~~ xi ~p r e s ~in~(6.6),
s ~the ~ n obtai

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

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

.%3 ~~~~~~~~~~~~ ~~~~~ a ~~~~~

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 abusest ~ 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
~ rbus 3. The re~uitsof a pow
g e n e ~ a t at
buses 4 and S are c o ~ ~ ~ e~~~e pl yp l ~ e ~
fuft, line 2-5 it; ~ ~ e r ~ o ~~ ~ ehd . ~ ~ ~ o
od of ~ r o b l (6.7).
e ~ The s o ~ u ~ o inn sw~ ~ i c ~
wit hi^ ~ ~ ini Table~ 6.1. 9
~are giv$n

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
~ o of
~ ~ ~ - €actors - ~all apool
~ ~ e n ~ we ~ d~ so u b while
~e~
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 54.6 56.1
Pool generation at bus 2 119.1 119.5
Pool demand at bus 4 94.5 95.2 1'
Pool demand at bus 5 73.8 75.2 1'
Transfer from bus 3 to 4 96-8 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~ o the
i n ~ ~ s ~ - t of - ~ ba ~i ~ a transfer
t ~ ~
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.
a r in Figure 6.10 shows that the more the w i ~ I i n ~ ~ s ~ - t ~the
The n o n - l i ~ ~curve - pless
ay,
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 § iwilli
~ e
Iment of its own ~ s a c t ~
i ~ ~~ m r ~e u~on ~ ~~ e
e the ~of other loads
i and ~ aln s ~ c t i ~ R
~ s. ~ ~
I

105

100

95

90

85
- 80
0.0 10.0 20.0 30.0 40.0 50.0 60.0
W ~I iI ~ ~ ~ s s - ~( o -~~ a ~y ~ ~ ~ 1 )

_. _I__ __ I
67.4 Static $ ~ c u ~ i ~ - c o ~ ~ t ~ ~ i ~ ~ d

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

ra~ 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.

~esched~ling [3 1,321 is the ~ r e v e n ~ ~ v ~

n s b~inginga w
~ a ~ g e r oop~es~ a t ~c on ~~~ i t i o and
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.
b~e
e d [33] that transaction o ~ ~ - c ~ n t ~c~o~~ e cn~ci cyv ae p a b ~will
It is r e c o ~ ~ s from l ~ ~be
~ e l p f5r~ le l ~ ~ a t i cn og ~ s ~ a~i no ~~ a tBoth c cy t md
~ o ~~ o. ~ t - c o ~ ~ ~~ n~ ~ ~~ necontrol ~ v ~
~ ~ e are, therefo~,taken into accoun~here.
p r e ~ e n t control
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
tive and ~ ~ s t - c Q n ~ n gcorrce;ctive
e~cy es to enswe s~~~~
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, ~ ~ $is to reduce benefit loss of the ~ e v i o ~ s$ ~c yl ~ e ~ ~ ~
e ~the ~conisidertition
~ ~ s ~ cwhen ~ i ao~ on ~~t ~ g e on c yc ~ .

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

ieNG !END ifNT

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

~ c ~ ~ o n
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
s
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:

ieNG ieND ieNT

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
ns
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 (6.8)

RER

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 5 i oof~ later^^ ~ ~ a c Pn~, ~ o
plus the ~ a n 5 ~ ~ §price
can be obtained in a simiiar way to pR.
The prices p;f under ~on~ingency

~~~~~$~ ~reventiveand pos~-c~n~ing~ncy G

onse~ationof power in the pool, A s s ~ that ~ ~only
~ transact
~ g
ide system regulation the associated generatQrbus can be ch
n t balance the c h ~ g e in
to say, the slack bus power a ~ j u s ~ emust s ~ e
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.~ a ~
any ~ Q contingency
S a d~~ i t i o nAteratio
~~ ~ ~ ~ ~ ~
y ~os~~con~~ c oe~nec~yt i Q nthe
§ linear power b a ~ ~ cequatiQ~
e ~nde~
~ ~can be witten
~ as ~ ~ n ~ ~ ~

w: The flow of power in a line c

since c u ~ ~c r ai ~~ be
o allo
~
limits,
0 2 1; I~ I ~ I E, ~ ~ ~ z
~ in the normal state ~ ~ u~s t ~
The c h ~ of~linee flow t ~ § ~

where sGj,sni and sTI are sensitivities of the c o ~ e ~ p o ~n rda ~n ~ ~ ~theQsn §q ~ of~ e
s ~~~ to
e Enin ~the normal state.
the c ~ ~ in~line
Transmission Open Access 5

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§

e to lose ~ ~ c ~ rthen n o~ s ~ ,
~ the
reventiive action to modify the operating state, Hence, d y n ~ se ~ c
resc~edu~ing in the context of both pool and lateral dispa~chis also a very i ~ p o ~ a n t
issue.
An erati tin^ state can be ~ ~ d in~many ~ ~e ~ fdf e r e ways,
nt and the operator
~ h ~ the ~ e which will not only ensure s ~ s t e ms
o a~tion ~ b ~ ~ ~ ~
e q ~ in an ~ a ~~e n - ~a ~ cenviron~ent.
e~s s ~ ~ A ~~ r ~ s~i eener nt
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 n
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
n~
~ o ~ e s ~ oto~ the ~ dfindi 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 ~Thec ~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 po§sesses
t~o~ ~ i c riskscs,the most
d ~ ~ a security
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 ~ ~~ ~is to use the sensi

o b ehere
pe in ~enera~ionfrom 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
P,,,, = ~echanicalpower input
Gii = dr~vingpoint c o n d u c ~ c e
Ei I- ~ e direct axis transient reactance
consta~tv o l ~ behind

MY,w y s = inertia constants of the critical generators and the r e m a ~ n i ~gene~a~ors,

g
res~ective~y
-cl -cl = speed o f inertial centres of the critical generators and the r e ~ ~ n i n g
@cr ' m8ys
generators, respectively, at the instant when the fault is cleare

~ 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
at~ ~ ~ (8') is c a ~ ~ u ~ ausing
unstable e q u i l i b r ~point 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
on results can be found in [42$

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

es 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 ~willa 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
cai ~ ~ o ubel dset as
 -
Transmission O ~ Access
~ n

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

b, btain the optima^ dispatch using equation (6.2) (enskng post-fault system static
of this p ~ o b l e ~ ) .
c. 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.
e. ute the n u m e ~ ~sens~t;vities,
al qiY9for the set o f system g
di§cussed above. For computation of new energy margin for ch
n ~eneratori toj, the base loading 6r has been used
g e n e ~ t ~ ofrom
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.
f. the sens~~~vities by m ~ k e tprice als; c o ~ p u t ethe c o n s ~ ~ n ton
s
~en~ratQrs; red~spatc~ the ~ ~ n e r a t ino ~pairs
s a
g If all critical contin encies we tested, then stop, Otherwise:go to step a.
m
~ e ~ i l nu~erical
ed 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

~ ~ incre~sesspot prices at the buyer’s bus but the ~ n c r e ~ si se not

~ y n a msec~rity

e p r e s ~ c of
e b~latera~
contracts er increases the spot prices at the

systems become more

11 entail a more comple
than discus§ed s 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
ce
ory and is central to pool d ~ s ~ a t cThe
h . fo
of elasticity are ~ ~ ~ o d u c e ~ :

price elasticity o f demand and

the conve:ntio~~~ 2
e ~ ~ sof~ d ~ mc a in The
~~ . a ~ ~ i t i o nsubsc~pt
;a~ j on e
 10 Power System Resestructuring and

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

s~~ 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 ~ ethe~pool
c k e r can be d e ~ from

where: C md C me ~ r ~ offer d price~ cand~power ~

sets of matrices of dual variables, at: time b, on the set of

respect~ve~y,
as
tr - Eet r., G$r.2
Ic

-3 )* * 9 et,, I

where J i s the n ~ ~o f~poole loads r (load busbars).

u r e begin with a fore~asEof the d ~ y ’ sprices, say a%half-
The ~ ~ s p a t c~hr o ~ ~ dwould
h~~~~~~ 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~ eia§t~~~ties
i 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 1

~~~~~~ under a normal cQndi~~on ~ ~ d a La~rangianA and fin

is d e ~ e ~byi defini
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
n~~~ A ,this also satis~es
~ ~ .
where the e ~ e ~of~vector~ t s er than or eqml to zero, whose values
n d the state A. Inequ
d ~ p ~ on 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 ~~ an
~~~~~

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

(6%)

e r eis~&-ke same as Figure 6.9

The e ~ a ~ ~~ ~~ Isee~t ~e s ~~ dhere
line 2-3 now has its square o f the
~~ansact~on 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
~ e ~ r e s e by
~ ~~ansaction
ed 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 ~;;andcDere~ i n ~

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
e r a ~ fkom 3 to 4 are given oricy in the fWo
and the ~ i ~ a ~~ansaction
they are ~ s to have~ ~ b ~u i prior
n e~~~ ~ ofrom
~ the ISO.~ i ~

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 ~toc ~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 *nom-
ase md new ~ ~ s a T", ~ 3 tdlt 5) in
~ ~ i so~ i~i a ~ e(r far~Qbus
c which
is h ~ c u~ ~ ~Case ~ ~ ~2yshows ~ o ~ ~ ~ s ~Td,~w~~~~
e ~ c. o Q ~ d i n a twitbin t i ~ oo w~
r a l both t r a ~3 and 2 supply the ex
~ u l t i l a ~ ~since s 5. Since the l o a d ~ ~ g
s ~ n s i t of ~ ~2-3 with respect to the ~ a ~ s ffrom
~ vline er
the ~ e ~ $with ~ ~~ s ~EFom
i r~e ~ ip e~cto~ the 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~
both

case I, not only is the ~ ~ sf?om ~ 3e tor5 ~ u less in~ cme ~ ~ ~ d

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 ~ 3. hen the a d d ~ 70

t ecase ~ ~ ~
-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
~ ~ 2, the
h to bus ~ less e the~~ o a ~ofi pro
n~
bus 3 ~ e n c oi s to p ~ o a smaller
~ i ~ share~
a i l ~ e nto
t ~an§ac~ion TA,Overall ~ e ~aree improve^. ~ ~ s

Tramxtion Fixed+ Case 1 Case 2 GaEe 3

~ d d ~ ~ i o ~ a ~
Poo1 gen. at bus1 38.8 39.8 t 40,6 t 29.2
Pool gen. at bus2 75.0 75.0 75.0 146.8 f
001 demand at bus4 100.0 ~00.0 100.0 ~00.0
10.0 10.0 10.0 10.0
~ i i a t ~ rfrom
a l 3 to 4 80.0 80.0 80-0 80.0
~~~~~ from 3 to 5 70.0 38.1 47.3 49.0

P
Lateral from 2 to 5 "" 22.7 2n.o 1

-- No data

apprQachestowards ~ ~ s m i s s i osystem
n ~ nangopea
operation in power ~ ~ r k ewt s~ r ~ in
 skied ~ u u ~ Prmedikre
d i ~ ~ ~ ~ ~ ~
price ~ ~ ~issues d i §t c u~~ ~ ec Section ~ ~6.8.1 i s based on the ass
~ i ~ aare ~ ~ t es r ~ e c trational
ly able to respond p r o p e ~ ~and y
~ 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 iasi ~dn e ~ a n s ~ a t e&dQ V ~ explores an a ~ t e ~ a t a~ vp e~ r o to~c~~
n provides useful ~ u i d e l ~ nfor
ameliorate c o ~ g e s ~ oand 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~~ o ~
orates the ~ b o v etwo issues into the wiil~ngnes$~to-~a~ ~ ~ $ ~ a ate
tch
describe^.
~ # ~ i ~ e~0~~~
s~~on t ~ ~ e ~ tby n IS
i othe
R

e
U
arket response

~ ~ r ~ procedure
~ n afor~congestion
~ o ~ relief
sent a short time ~ e ~ which
~ o ids divided
~ in
e~ 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
~ in~lu~~n

(6.7) during i n t e ~ a l

procedure must iterate in the whole ~ansi~ission operation time ~omain.

This i n t e g r a t ~c~o ~ r d ~ n a ~procedure
ion 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 $a r ~ ~ t ofe ~Uie$ ~~ ~ ~ s~ d ~ ~

and the necessity of open ~ ~ ~ ~access i s to sf a~~ ~o ~ ~ t ~ t e

, a s~~~~ disc~ssionof e l e c ~ i market
c ~ ~ s ~ c t and ~ asso
~ e ~
c ~ ~ p has~ been ~ provided.
~ e ~ The ~ fiinc~ion~
s 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
T~nsmissionOpen Access 17

80.0 IO.OCI,L,, 20.0

Bilateral Transfer Delivery ~ i l ~ ~ n (w)

gne~
Contract MW Price $k $/MW 2h
T 100.0 4.WF .3 80.0

I 1.02 __
2 1-04 _-
3 1 .OS --
4 ** 20.0
4 ** 20.0
** Voltages are kept within the range of0.95-f.05.
-“ No data
21 Power System ~ e s ~ c ~andr Di enr e~~ I a ~ i o n
Transmission Open Access 239

.David and R.S.Pang, ‘ S e c u ~ ~ ” ~ ar~cheduling sed o € ~ r ~ ~ a c ~ini ao dn s~ r e ~ l pQwer

a~~d
system’, IEE Proceedings - Generstion, Transmission and Distribution, Vol. 146> No. 1,
January 1999, pp.13-18,
h L.P. Hajdu, ‘ Q t i i a l corrective re-scheduling for power system security’,
J.G. ~ a ~ t e n b a cand
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~
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
post-con~~n~ency co~ectivereschedu~ing~, IEEE T r Q ~ # c ~ i oon n sPower S y ~ ~ e mV01.2,
s , No, 1,
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 ~ ~resen~ed 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,
s 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 ~ande ~ ~t r ~ v e n t i control’,
ve ~ g ,@, Vol. 135,No.2, I
IEE P ~ o c e e ~ iPart
H.D, Chiang, F.F. Wu and P.P. Varaiya, ‘Foundations of direct methods of power $ y $ ~ ~
~ a ZEEE
~analysis’, ~ Transffctions
i ~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 ent
c o m ~ ~~ ~ e~ cv~ ~~ ~~ ri Proceedings €~ ~e ~ ’af ~the IEEE PES ZOO0 ~~~~e~ ~~~~~~~~

S~ngapore,January 2000,
, On-line A l g o ~ for ~ 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,
,
1998.
S. Sterling, &LA, Pai and P.W. Sauer, ‘A ~ e t h o d o l oof~secure and 0 ~ opera~on
~ ~ a ~
of
power system for dynamic contingencies’, Electric Machines and Power Systems, Vol. 19,
1991, p~.639”6~5.
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 ct for electric power ~ ~ ~ s s iJ oo i ~~of~’ ~~a ~ e
~ ~ oV01.4,~ 1992,~ p@f1-242,
~ ~ ~ s ,
.P. Chao aid S.G. Peck, ‘A market m ~ h a n i for s ~ electsic power ~ ~ ~ ~ ~ Ji os ~s ~oif of f~ ~~
La8~0ryECOPZOP~~CS, Vol. 10, 1996, pp.25-59.
 Dr Loi Lei Lai
XYan ~ i a o T o U
n ~~ ~ v e r s i ~ City Universi~Lon
China UK

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 ~ d and until r e ~ ~ te~l ye, c ~s ~h io ~~ ~ e s
e ~ ~ n e d~ e~ y~ in~check,
rion. Now that the market larg~lyd e t e ~ i n e ~e~~
s price
~ r ~has
~ e n planing ~ 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

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

. Power ~ ~c s~ , how ~ u p c ~
~ r a ~c r ~e e a~w~~~~i define
er plant, are not being ~ o ~ o u r~e ~ . ~ ~ c ~ c
 a ~ that is, old plants usually sell the most power sin
cording to ~ a r g i n cost;
ady paid off their c ~ casts
p and~need~to cover
~ only fuel,

a ’ ~ power i n ~ u has
ent of ~ h i ~electric 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
ectriciy sector i s cha~ginga great will have a great in~uence01p the f u ~ r e
~ v ~ ~ oofpChina’s
~ ~ nelectric
t
in effect and the e a v ~ o costs ~ ~of e ~ ~
energy use are not yet even p ~ i a l l y d for. These factors must
ricing s c ~ to~ promote
m ~ the ~ s ~ ~ $ ~ a ~ nuse l eenergy 13-61.
a bof
tran§pare~cy and legal r ~ ~ will ~ eu n s~~ ethat
e c ~ sh ~ n o ~ ~ ~ d
c o ~ ~ a are:
g is s ~ ~ a i ~ and ~ s the
e dde~i§~oa-mar~ing
~ a u ~ isoclear. ~ ~
i c of pollutio~needs to be con§i~eredso that true ‘kast 60
e c o ~ o ~cost
made. China’s e c a n ~ ~eifc~ ~ i e n andc y e~vironmentalquality ~ e p e n don
~ ~ ~ o ~ s .
The ~ l ~ ~ co w ~ ~~c r~ din ~ h ~~ has t ~ gone ~
n§ aalread~ h a t a ~~yc ~ ~ g
past ~ e ~ ~Atd ~e .r e ~its~~ ta n, s i t ~ o ~ a p l a ~~c o~n o~~ toyn
under way. On 16th ~~~~ 19 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 ~ %hat
~will e ~
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
(SP) e ~~ of ~
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,
c~s
s in ~~~~, and thea ~ a ~ i o by n 2005.
~ ~ eAn
and order1~~eneratm ~ g ~ ~will t full
e be
~ o ~h ~~d reopower
s plant will allow a wi
The reform of China’s e l e c powe
~~~
of r e f o and
~ a satooth

e ~ e c ~~ c Q i W
~ d ~u o§~ ~
economy presents problems that demand further exploration and confro~ta~ion;
many
s ~ e to ~ a ~
be sa~s~actorily ~reso~ved~
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 system
~ t of
s obstac
plan. The p r o b l e ~ and
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~poweru ~ network

o n service areas and their installed g e ~ ~ r a ~ ~
are shown in Table 7.1 and 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
ct~~ ~~~~~ uangxi, Gu~zhouand Y u ~ four ~ n
HNPG is just below ~~~~ and has not been shown in Figure 7.2.

~is€ribution
of power network sewice areas

Installed capacity Electricity ~ e n ~ r ~ ~ ~ o n

Network &c ~ e ~ i o n Total Hydro Total
(m) 4"w (TWh) (%)
North China Power Net. (NCPN) 34312.1 15.96 141.15 5.62
Northeast Power Net. ("JEPN) 37186.6 5.94 178.93 1.36
East China Power Net. (EC 46121.0 9.62 211.45 5.40
Central China Power Net. (CCPN) 40749.3 30.60 160.37 28.70
Northwest Power Net. (NWPN) 19275.1 36.28 69.60 28.33
~ ~ ~ n d Provincial
ong Grid (SDPC) 17380.1 0.27 84.06 0.09
Fujian Provincial Grid (PJPG) 8008.0 58.28 32.19 57.41
~ ~ a n g d Provincial
on~ G) 29027.7 18.99 103.85 0.09
Guangxi P r o ~ ~ n c i a i G ~ 5645.0 58.32 22.78 56.94
Chongqing Power Grid (CQPG) 315'7.0 9.93 12.64 9.37
S ~ ~ h u Power
a n Grid (SCPG) 11942.3 57.14 44.37 49.94
2

Year Society Share o f ~ n d u (%)

s ~ SIiare Share of Share of Share of
tot& Of ~ ~ ~ s ~ ~ ~ ~urban c~ k;C, nual
i pr ~ ~~
~ ~ etc. ~ c ~ ~~ ~ 1r ~ c ”e ~
~ tation s
~~~) ~ h Heavy
~ Light
l ~ ture @.$) <%I ~ o ~ s ~ ~
C%)
I987 49Q,27 8f.Q 64.5 16.5 7.1 1.6 4.8 5.5
1988 535.87 80.3 64.1 16.2 7.0 1.6 5.1 6.0
1989 576.20 79.8 64.0 15.8 7.0 1.7 5.1 6.4
1990 6 ~ ~ . 678.7
0 62.6 16.1 6.8 I .7 5.3 7.5
1991 669.63 77.8 61.8 16.0 63 I .7 5.6 7.9
1992 745.54 77.1 61.2 15.9 6.8 1.8 5.8 8.5
1993 820.11 76.7 61.2 15.5 6.3 1.8 6.3 8.9
1994 904.65 75.4 60.3 15.1 6.3 1.9 63 9.7
1995 988.64 74.8 59.8 15.0 6.2 1.8 6.9 10.2
1996 i0~7.03 74.1 59.3 14.8 6.1 1.9 7.2 10.7
1997 1103.91 73.0 58.3 14.6 62 1.9 7.6 113
1993 1134.73 72.0 58.0 14.0 4.0 2.0 10.0 12.0
Municipal and
Coinrnercial
10%

\Heavy ~~u~~~
58%
Others
Chemical Products 10% Coal
 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~hina’s
~ ~ o w e in
r
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 g 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~~~
~d Thus, the SP has made a strategic
§~~~~ for fhe fiime d~velo~ment of ~ h i n a electric
~s ~ o w e in
r

(1) The Erst step, from January 1997 to ~~~~ 1998

~ 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 a n ~a ~ o c i a l ~ s ~
w coo ~m ~k l ~ with
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 the genera~o~¶
rn
~ o ~ p l the
~ ~~ ~e n sg ~ in the
c SP ~ system;
~ n ~

) 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 ~ ~ e

ise ~ a ~ a g e m formerly
e~t ~ ~ d e ~ byk 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 ~ ~ directly from n

~ cis a~located
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 1

under the SPC. ese state~owne~ assets, held by the Armed Police Hy
C o ~ s t ~ c t i oTroops
n (also as Anneng Corp.), belong to the SP’s ~ ~ a g e m e n t .
Other c o m p ~under i ~ ~the ~ i of Electric
~ Power ~ are the~ SP’s swholly ow
~
s~bsidiari~s, holding or jointly shared companies according to their property n
s ~ c ~ r eTheses . cQrporatiQnsand ins~i~tions under the SP include the fol~Qwing:

China ~ u a d i a nPower Plant En~~neering General Corp.

8 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. ent
China Power Investment Co. Led
China Power Investment Holding Corp.
(I ~ n g Power Industry ~evelopmentCorp.
~ h o n g ~ Electric
National E1ectrh.i~ Power
China Extra High Voltage Trans, & ~ ~ b s t a t i oConstruction
n Corp.
lectric Power Fuel Corp.
Other e n t e ~ ~unders ~ sthe m a n a g e ~ of
e ~the
~ SP.

Engi~eerin~ Institute
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
n Institute
Wuhan High Voltage Research Institute
* North China Electric Power University
China Electric Power News
China Electric Power Press
22 Power System ~ e ~ ~ ~ c t uand
r i~fel~~~ ~ M l a t i o f l

a ~manager~alfunctions of the SPC niainly include:

The o p ~ r a ~ i o nand
~ u n n ~ nthe g e x ~ l u s ~ owrtedv 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 e d ~ ~ ~to state
~ s a f ~ l i a ~ units 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
~g 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,
a e~~ o n o m ~ c
and h ~ g ~ ~ ~ uo ~ a ie ~r at ~yoft n ~ o ~ w ~ ~in~the cormtry.
~ oalf ~ ~ r ~ s
~ x e r c ~ ~power
i n g n e ~ o dr~~s ~ a t c h ~m~nagemen~
ng on the na~iona~ power network and
the related generation, ~ a n s m ~ s s ~ and
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 ~The
~ r ~ ~ a t i o n ~
and its s ~ b ~ i isdan~ equal. ~ in law among ~ n ~ ~ p e npersons,
a ~ one d e n ~ and it
is a capital link ~ e ~ a ~ ~ o nins hproperty
ip between the investor and the e ~ i t e ~ r i invested.
se
The pilot project was ~ ~ i i ~ ~by d Northeast Power Group Company WPGC). The
a t ethe
NPGC was ~ e ~ r g a n ~8s d af~li8tedentity of the SE",being an agency of the SP in
s e an
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
~
~ ~r e o r ~ a ~ ~is~tos iset
p ~ n c i for 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 ~ rthene~t~~~~~~ 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.
r
The launch on the ~ ~ i l d ~power n g market was d ~ ~ in eDecember ~ ~ 1997. n For ~ ~
establishing a ~ o l ai step-by-step
~ ower~ market, ~ ~ 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
d pilot
projects in five ~ r o ~ ~ and n c ~one s city, Le, ~ h e j ~ a~ n~~e~n d ~o ~ ~a , o Jifin, n ~ ~ ~
~ 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 § SP, the follow in^ ~rinciplesshould bc ~ o m p l with:
n ~the ~~d
Electric Power Industry ~ e s t ~ cin~China
r ~ n ~

equaI competition
high ~ansparency
0 sharing benefit
lowest cost
e opera~ionby laws and reg~la~ions
subject to supe~ision.
The concre~epractice is to separate generation from t r ~ n s ~ ~ i s s first,
i o n reorganise several
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
~ to the local area, are temporarily not included. For the sake
mainly used for s u p p ~ y i nheat
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
l of resources. Owing to the distribution of energy ~ources
and loads in ~ h i n a ,implemen~ingthe nationwide power network interconnec~~~n and
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~edthat
inte~cannec~~on between the Northeast and North China power networks will be
acc~mplis~ed 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 i o n the Sichuan p r o v ~ n cpower
in 2003, the ~ n ~ e r c o ~ e c ~between ~~~
network and the N o ~ h w ~power st network will be accomplished in 2004. Three cross-
regional. 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
power
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 ~ Q ~ .
I ~ p i e ~ e n rural
~in~ ~ a n a ~ ~ m~enns tt i ~ ~ i oreform,
nal technically r e n ~ v ~ ~rural
~ng
power nc’nvorks 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 ~ to solve the chaos in rural e l e c ~ ~ c i ~
n ~ e ~ ~ and
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
inves~men~ is 180 bill~on art. The line loss rate will be reduced to below IS % from
 ,

Q~~anisation
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 ando ~~ 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 ~ised
the $16” has focused on bath international
omestic ~ n ~ c i sources.
ng
’s power i n d u s ~is still m ~ u o task. ~ s~~e r n ~ t i g a tin
i~~
d ~ ~ ~due ~ the
c to l t increase in electri
in 1997 in China was only 0.21 kW,
e i e c ~ i consu~ption
c~~ acco~te~
world average. It i s planned that the nation’s 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 wit

course of economic d e v e ~ o p ~ e inste
nt

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 r ~ , the facilities from
i o ~ e ~ oincluding
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
~
 .4
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
o ~ to~market e ~ C Q ~ Q but
~ Y they
, are not well i
about the ~ e c ~ and ~ s ~ tos realise the ~ ~ s ~7%t ~ o ~ .
~ approache$

cing reform lies at the heart of China’s response to

Electric Power Industry ~ ~ ~ ~ ~in cChina
~ r i n g 33

~ ~ w e v none ~ r , of these has been st~dardisedas ~ ~ t i o np ao~ ~ ~ c ~

inev~tab~e~ however9 there is a gr~wingrealisation that the establis
p ~ i c ~ n~g ~ has become
c ~ to the
vital e ~eve~opment of a s ~ ~ t a ~ ene ab~e
Since Ehe mid ~ ~ an ~ 0 s n u ~ b of
~ncreasin~ ~ enterprises,
r ~ ~ ~ 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 ~thei ~recovery of c o n § t ~ c t i ~capital
n 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 out- es which arc: managed by the ~ ~ o f Power
i $ ~
~ 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 nt, 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
al b ~ ~ a respec~~vely.
ux 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 oThen~ ~~~~c~~~
~ e
tariff 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 include:

electricity rates for ~ ~ g h ~ n g ;

md o r ~ ~ ~ n n d ~ ~ s ~ ~
~ t y for the larger ~ n d u $ ~ ;
e ~ e c ~ i crates
electricity rates for agriculture ~ r Q d u c ~ ~ o n ;

rirnarily becaus~nationalis~dand § ~ ~ d ~ d ielectricity sed pricing po~ic~es have not been

$ ~ e n t ethe
~ , c l a s s ~ ~ c a ~of
i oelectricity
n 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 ~ ~~e~ (e.g.
~ cin i s~~~
~ o ~ ~~~~~~~s e r and ~ s ~ to be subsidised~as are the p r e f ~ r e n t ~i ~
c ~~ o~t e ~ontinue ~
sent, tariffs fixed by the
.e. electricity prices are b
be r a ~ i o ~ a l ~and
~ e d~ner~ased
9 power
es have offset revenue s ~ e froni a ~the~~ m ~ ~ h
with s y s ~ e ~ - weffectsi ~ 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
ia~ in the power i n d u s ~Tt~is ~ x p ~ to
c ~sollve
~ d the

1. Power resource location problem

the s ~ ~ a t i oo nf an electric power shortage>the main issue the electric power
t ~ face is to speed up c o n s ~ c t ~ofo new
~ n d u s must ~ power plants. Divversi
~ e n ~md ownership of power p h t s will help to achieve the e
~ n v e ~ charnels
~ 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
ne~orks.
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.
n
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
r allocation will be more e f ~ c ~ ande n stable.
~

2. Low a ~ i n i s ~ a t i efficiency
on
~ u ~ the n gpast 20 years, r e f Q of ~ the Chinese economy has u ~ ~ ~ r ag rapi o ~ e
de~e~opment. Supplies o f c o ~ o d i t have
~ e ~become a b ~ d while ~ t prices
~
de~~eased. To compete in the market, manu no effort to i
a ~ ~ n ~ sand ~ ~a ~t oi ~ their
o~ t es e ~ ~ ~ e ever, Chi~a's
i n d ~ does s ~ not face such p~ssure.lt 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.
r
The gene ratio^ cost has been ~ ~ c ~ e a year s i ~ byg year. The g ~ e r a ~ oand n
~ r ~ ~ ~ i sindices
s i o nare very low: for ~ n s ~ n thec ~ na~~onal
, net ~ o n s u ~ rate~ ~ is~ o n
about 400 ~ W (standard h coal); the line loss rate is a b o 7%. e s fw
~ ~ These ~ n ~ i c are
b e h i n ~the world's average level.

3. ~ c i p r~~ bg~ e m
Under the ~ a d ~ t i omonopoli~s
~ ~ a ~ of the power i n ~ u tos gain ~ ~ more b e ~ e ~ t the
s,
o r s to ~ a i n t aaj higher
o p e ~ ~ ~strived ~ rate o f e ~ e ~ ~ At i ~ same
i c the . time, the cen
~ o v e ~ ~encourag~d
ent ~ ~ vin the e power
~ plant
~ by i ~ s~u ~t has~ ~
~ s ~~ o t ~ sgoiices
'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
h of .~ h ~ n epeop
se
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
~ needed.
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 ion
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
~~~~~ gc ,~the
~ n~ period
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 ~

2.

3.

4.

5.

In
to
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
~ a t ~ ational a ~ v a n e elevel,
will t~~~ a p p r ~ ~ i the ~ ~o~ing
~ a t i ~ topn alevel.
~
7.4.3 ~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
c ~must
~ b s ~ athat e ~ be r e ~ o v to ~ dachieve the ~~0~ goals are as foI~ows"
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 o~s
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* beca~ it ~ ~ e ~ ~ ~ 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
aIloc~t~ ando ~~ ~ 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 ad~inis~~t~ve
s basically u n c h ~ ~ e although
d, the SP was establish
wer was t e ~ ~ n a t e C d . ~ e ~ with
l y ~such
the s t ~ c of~ ~e ~ o rights, p e~ ~ ~ t o i ~m ~~ ~ ~ s a ~ ~
1also r e ~ unr~solv~d
~ n [I].
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
t 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
t,
hnts can be economicallycla
4. Small hydro power or thermal power p ~ a n constructed
~s s ~ are
by focal g o v e ~ m e n t They
y by local power ~ o m p ~and
u s u a ~ ~mn ~ esell
s electricity a c c o ~ d i ~to~the
g price audite
by local gove~ments.
5, n ~ to f o r e ~ ~e n~ ~ e ~ rTa~ get
a1 power p ~ a sold ~ . to ~ o ~ §n ~ c t
s efurads
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 y grid
~ tthe
each year at a 6 e ~ i price.
n

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 ~ly
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
ower Law ap~rovcdby the People’s Cong~essof ~ h j on n ~28
f date. It i s almost useless in r e s ~ c ~~h n~ n~~a ’ ~J power ~ ~
l~shmen~ 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,
r~. new ~ e ~ i s l almust
t~o~
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~

China’s 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
~ i~~ c
right of regional, p r o v ~ cpower
i n ~ ~ ~ ~e o ~w d~~~~§~ ~ ~ a n s ~ to~ a~ true
~ er ~ the s ~power
o ~ m ~ ~ e t

l a ~ i ~ nIns ~today’s SP lmanagement system, temp

a d m ~ ~ ~ s ~orders ~ still the main measures used to manage
a t i vare
~ ~ ~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 t
ing ~ i $ ~ b u t ~ofo social
n ben^^^ is an i
t of the ~ o ~market.
e r

In s ~ mChina’s ~ ,e l ~ power~ ~ industry

c 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 of 1 g originated from the r e ~ u ~ r e moef~a t1

ity ~ ~ 6 ~inxChina
~ r n ofo g ~e ~~ ~ ~~ a t g f ~ and n t . Ps used in the uf( are not
n ~~ ~ v e s ~ eThe
s u ~ t a ~for
le ~ h ~ n a do~og~es have beea $~ggestedto d e s ~~~c~~~~~
~ ~ price
23 Power System R e § t ~ c ~ and
u ~ ~~ e~ rg e ~ l ~ ~ i o

~ § t e ~~ s~ ~ ca two-pm ~ ~" section will discuss a one

l u p~r ~ c~~ ns g~y s ~~eThis
~ ~that cm§ cope~ with e the above
~ rob^^^.
~ o § t of
s e l ~ c t r ~include
c i ~ o ~ e ~ costs n inves
~ o md
~ ~ of e ~~ ~costs ~ involves
~ c i n~ a ~ ~
ause operation optimisation is the basis of
i ~ ~ of determining capacity i R v e s ~ e n t
r e ~ ~ a ibs ~the~ basis
p r o d ~ c ~ osimulation
n of the power system becomes one o
i ~ "71.
p r e ~ i e ~l e c ~ ccost

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~re§en~ed by

where e7ti., : ~ e ~ ee ar~ a c i~for ~ load

i ~~base ~ ofthe s y s ~ e ~
: ~ e n e ~ ~ci ao n~ a for
c ~ ~ load of the s y s ~ e ~
peak
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

u t ~ 8760 h, while, the ~
evenly d i s ~ ~ bamong u rateaof ~
~ h be o~ ~~ s~ ~ ~~ cb o tou~ ~~~ i n ~~€or e&ch ~ h o u~~~ h e (r e fthe~~G~ O~S ~~of)
$ ~ for hour~t is c ~ ~ ~ ~ ~ ~

where 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
8760

where P(2) is the system load at hour t.

The ~ a ~ cost ~ p(t)
~ ofn e a ~ ~e c for
~ hour
c ~t is~
Electric Power Industry ~ e s in China
~ c ~ ~ ~ ~ 39

~ u ~ s~ ~~u a ~t i (72) ~ equation, we have

o ~n tinto~thenabove

in equation (7.5) can be found by running a probabilistic production s i ~ ~ l a ~To

~on,
~ ( 0
find the second tern of equation (7.51, we can use the follow in^ two methQds.
~ o n ky, u ~ ~ h a and
I. ~ ~ i ~ tgae ~i ~n e r a ~capaciv ~ , I unit load for each hour,
~ gincrease
in this situation, ~
~ o b a ~ i ~ i ps triocd ~ ~ t i os~mulation
n ~ ~ ~

~ ~ c ~peak
~ aload i ~.
s e c a p a ~ kt/,
t the cost of loss load, the second way is ~ r e ~ e ~Ue d .
Because it is d i ~ ~ utol get
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
d~e in Fi ~~~~

~ ~ ( t )
LDC in the ~~~~e is the load ~ u r curve ~ t formed ~ ~ ~After~~ ) n. a n
~ ~ from

~ e year, LOLPA,i s determined by tbe abscissa W, i-

The risk level o f ~ whole
~ ~ 7.5 is ~ e curve formed by P(t) -E- hp ;here AP is an inc
g the ~load duration

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 ~ ~ i
~ ~ ~ ~ eAW i ~ Thus
e n we
I t can s ~ ~ s tthe~ f~ ~t e~ I equa~~on
o ~ ~ g
 a ~ ~ to e r~ a ~ the~ n e~ c ei s s n~c ~ a c reserve
i ~ an
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 ~ ~
~ s ~ e n e ~ cost
af c o n ~ ~ r n ethe, a ~ s~ ~o ~onot
~ inch
l ~
cost b e ~ ~ ~ e ,

~ o i n ~ u s er ~ a l ises have their own power units and

they do not GO respective reserve, their electricity
e q (7.8) ~ ~ so~ ~~ e ~~a q~(7.6).
~ ~ ~ ~ ~o n
Electric Power Industry Restructuring in China 11

I
0.9 1 *

0
1 2 3 4 5 6 7 B 9 10 11 12 13 14 15 16 I7 18 19 20 21 22 23 24 1
(a) September

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 ~ ~ eefor~raat~i n~ ~t ~e of
n c~ ~ ~~~ ai ~~casts ~~ one
~c ~

~ e ~time i s T, . The n u ~ b of
is 27, and the set of s h o u ~ load e ~h ~ are~ t , ,r t, ~an
r e ~ ~ e c tand
~~~~y,
1, -t- I,, -t t, = 8760
~ l ~~ 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 , calculated as follows:
e ~ yare
242
I_-I-- ._. I
Power System Restructuring
___- and Deregulation

in the peak, s ~ o ~ i and

If the cost of e ~ e c ~ igenera~~on
ci~ ~ d evalley ~ sCp, Cs
~ load p e r i ~ is
and C, ,res~ect~vely,
then they can be found from equation (7.2) as

(7.10)
Mp id, tETV
ence we can d ~ t ~ ~the
i naverage
e cost of electricity for the peak, s h ~ u l ~and
e r valley
load p e ~ ~ as
o~s

~ of
The ~ v e cost ~ ~~ le ~ isc thus~
e for ~the year ~

(4.13)
ra and is,, are average marginal costs €or the p
s respectively, and are c a l ~ ~from o n The a ~ e time
l a e~ q~~ a~ ~ ~(7.6). ~ used
~ e
costs u ~ ~ ~ eforca real i ~ system are s ~ ~ in
~ cpower w Table
n 7.3.

Peak load Shoulder load Valley load

0.402 1 0,2014 0,1133

7.5.3 ~ ~ e c ~~ ~ i~
~ ~ ~i i ~ ~ ~ ~ ~~w~~
i~ ~Q~~~~
e~ r ~ - ~ ~ ~
~ w ~ ~~~e~
7 the ~ ~ t i ~ electric d e shortage which last
As a c ~ ~ s e q ~many c e , plants suffered a 1
~ ~ power
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
~dispat~h, ~ p ~ e ~ flows
e ~r alon
lly died off. Owing cap the emph

This operation obviously

resource^.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 m a real ex^^^^ of the ~ o ~ hp w
~ ~~t reo b ~ eby ~ e ~r s sy ts ~ In
e~~
~ ~ ~ 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 ~ ~ s ~in China
~ c ~ r ~ n ~

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
~~~~~c
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 ~ ~
disp~~chiRg in the n ~ ~ power w esystem ~ make a significant profit.
~ can

i I

I 40%

(a) ~ e r ~power
a l

(b) Hydro power

re 7.7 Weight of we^ ~ ai n s ~ ~a in

~ ~four
~~dprovinces
~ i ~
 la 7,%Power source mix in the northwest power system (~~~

Province Thermal power Hydro power Total

~ ~ a a 4025
~ i 44.6% 988 17.5% 5013 34.2%
Gansu 2668 29.7% 2285 40.4% 4953 33.7%
In@& 400 4.4% 2080 3 ~ * ~ % 2480 I&9%
~ ~ n
1924 ~ 21.3%
x ~ 302 ~ 5.3% 2224 15.2%
Total 9017 100% 5455 100% 14671 100%

e 7.5 ~ o nbenefits
~ ~ i ~
o f interco~ection~

Separate Operation Interconnected Operation

Load ~~e~~ 63568 ~ 3 5 ~ 8
~ ~ 6 D O 8 ~ 4 5 ~
S ~ a a Exchange
~ ~ Energy 32 17890
cost
~~~~~~0~ 3,26887 4.34856

39318
Gamu ~ ~ ~ ~Energy i a n g ~ 0 -24821
~ ~ @OSc e ~3 . 4 ~~ ~ 7 ~ ~ ~1.78287 Q ~
Fixed Cost 9.71239 ~ ~ ~ ~ -5 8
Lmd E n e r ~ I8747 f 8747
~ e n ~ r a tEnergy
in~ x 8747 8~49
~ i ~~ x~Energy~ a~ 0 ~ ~ ~ e-10078
~ ~ e r ~ tCost
;on 1,04226 0.19944
Fixed Cost 3.37173 1,19632
Load Energy 30079 30079
G e ~ e ~Energya t ~ ~ 3095 I 47088
ia E x ~ h a ~ Energy
ge 872 17009
~ ~ e rCost ~ t ~ o ~ I. ~ ~ ~ ~~ ~ 36 D ~ ? ~
Fixed Cost 4.27124 ~ . ~ 9 8 ~ 4
Totat ~ ~ ~ ~Cost t i o 35,59297
n 33.294~4
Total
~ n ~ ~Benefits ~ ~ o ~0 e c ~ 2.29884- -
Electric Power Industry R e ~ t ~ incChina
~ ~ n ~ 2
 Effects of prices on interconnecting benefit d i s ~ i b ~ ~ i ~ n

of change shaanx~ Gansu Qinghai ~ingxia

~ ~ W h ~
0.35 1.82291 -1.47891 -0.005 17 1.96001
0.34 1.64401 -1.23070 0.09561 1,78992
0.33 3.46511 -0.98249 0.19639 1.61983
Q.32 1,28621 -0.73428 0.29717 1.44974
0.31 1.10731 -0.48607 0.39795 1.27965
0.30 0.92841 -0.23786 0.49873 1.10956
0.29 0.7495 1 0,01035 0.5995 1 0.93947
0.28 0.57061 0.25856 ~.70029 0.76938
0.27 0.39171 0.50677 0.80107 0.59929
0.2~ 0.21281 0.75498 0,90185 0.42~20
0.25 0.03391 1.00319 1.00263 0.25911
0. 1.25140 0.08902
0. 1.49961 -0.08 107
0. -0.502~9 1.74782 1.30497 -0.25 1 16
0. -0.68169 1.99603 1.40575 -0.42125
0.20 -0.86059 2.24424 1.50653 -0.59134

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
s~l electric ~ ~ k Ine the t ~past, the
i n a ~ p r o ~ ~endsa ~ e of ‘~rnphasisinggeneration, i ~ o ~ansmissjon~
~ n ~ in the el
power industry ~f China made adequacy ~ ~ s r n i s very ~ Since the basic business
s ~ o oor.
of the SP and its ~ubsidiariesis ~ansmissionthey hav a duty to prov~de~ ~ o u g h
~ a n s ~ ~ s s capacity
ion to satisfy the requirernen~of the power t ark et, This is a massive
~ n d e ~ that ~ ~will n gbillions of yuans. Where will the money come from?
~ cost
The r e f o ~of the power industry brings ~ ~ s ~ i s pricing s ~ o inton a new
n g to identify the costs of ~ a n s r n ~ s ssieQ~~i c e sIn
there is a g r o ~ ~ need , 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
gene~a~or (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
dist~~bution faGtor problem and loss allocation p ~ o b l eare ~ e s ~ b l i s h e ~To. solve these
p r o ~ l e ~we
s , i ~ ~ o d u ac series
e 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 ate
u § ~ ~ ~ l nofe the s e ~ and algorithrn [ 181.
s s ~ r o ~ otheory
Electric Power industry Restructuring in China

7.6.I Current Decomposition Axioms

~ a r ~ e t - d r i v etransactions
n 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 i o ~ econom~cefficiency. One essentia~ piece of
c ~ improve
~ 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 t e and cost of Iosses into
r ~level
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 s time, it is p o ~ s i b ~toe find for each ~ ~ ~ ~ ~ ~ e s
i o nwith
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 ~hayea ~been ~ ~ ~ ~ f 19-24].
o § e ~~~n
d ~ o n s ~ ~
the ~ r o ~ I o~f w ~ we need to identify the power (or c u ~ e n ct ~o ~ ~ o n of
r nh e~~ I i ncos< en~
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 Kirchhofl’s 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
. supplied by L generators,
1 ~ ~ ) , ( 1 l= ~ , ..,L)
L
(7.14)
/=I
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
branch,

(7.15)
i othen same at the two nodes of a ~ r ~ n c ~ .
u ~ are
~ ~ s ~ ~factors
is obvious when we define f C k j fby cments as shown In ~~~a~~~~~ ~ , 2
because both I(,)! and IWt ~ a ~ nthe~ same
a i values
~ at the two nodes o f ~ ~ k~, c h
~ o w e ~ine powerr ~ s ~ s ~ ea m~ a ~ ywe I y power instead of c u ~ Thas
s ~us~ u a ~ use e ~we~ ~
§ ~ i op~~l ~~this v es ~ ~ ~is also
~ ~true n t we use power to defme d i s ~ i ~ u tfactors.
e when i~n
~ s s u m the s the initial and terminal nodes of branch k are U, and U , . Thus
e v o l ~ g e at
the r ~ s ~ e c t i powers
ve are

47-16)
Tlie powers at the W O nodes supplied by source I are
 8 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
~s going ~ ~ n e s .
~ s s u that
~ ~total e ~ ~ at nodei i s Ii, this a x ~ so ~~ ~ that
n ~~ u n ~n~ected e swhen the
c ~ ~ 1 ~at node i is IiZ its ~ o ~ ~c o ~ e ~~in ~
current ~ n ~ bye generator t ~ ~ n~ ~ ~ o
h e k is

where "xi#) is called a ~ l ~ ~faclor

a ~ of ~ k,
i #line
Qi{k) = ~~k~~~~ ~7.~3
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 ~~~
corollary.
 The factor of n o ~ eloss a ~ l Q c atot ~an~ ou~goingline is equal to its ~ ~ ~ o c a t ~ o n
factor.
Assume that node i hasLi incoming lines all directly cQnnec~e~
w
~ ~ n ~then
~ the
~ loss
~ o f rn ~s i~~
i se
L

g of node i are not all c

i ~ lines ~ ~to the
~ g ecn e ~t t o~e~ $ ~~
the r ~ ~ s i rve aes o ~ n

As ~ c n ~ above,
~ ~ there ~ rkvo ~ ~ o b l e m
n e are re~ated
$ to load flow a n ~ ~ y ~ ~ s
, namely the ~ i s ~ i bfactor ~ n and the loss ~llocatio~
~ t ~problem probl
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 e o~ , ~the t
~ can ~ ~
Ihe or ~ ~ by a loa s ~ ~ ~
t i Q nof each g ~ ~ ~ r afor
e d i s ~ ~ ~ ~factors t o er
s N nodes, N , gene~at5rsand N, branc
ctars d e ~ n by~ de q ~ t i ~o7~. 1 $ ~ ,
&E the ~ ~o~erat~ng c ~ ~ o n ~~ i e ~ ~~ ~ ~
~ ~ e ~1afor~~Q r r k i s ~ ~ c ~
e~ ~ c o ~~~ o nee inn ~o~tgoing
ns ~ lines at
their c ~ ~ ~asnshown ~ s in , equa~~on (7.22).
vo~tageat node i yields

~ ~be c a l c ~ ~ ~ ~ e dation (7.21). To do

e n e r a 1~can
 Power System ~ e Dere ~
5 and ~ ~ n

(7.26)
where
= [PiG,P? >.
*. ,P,G f'

is the vector o f ~eneratQrpowers and

=E
S 9 Pz 9 *.*, P, I'
is the vector o f total node injee
elements of which are defined by
(~.27)
0 otherwise
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
e a simple p
have the f Q l ~ Q wrelationship:
~g

c a l is ~ ~ o r Q uand
ove ~ a t h e ~ a t ~model
l~sslessbranch as adopted in [25].
1
s , does need not to ~ ~ thev ase
(7.28)

m simple power systems

A circuit ~ ~ a g r afor
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 5 (~.2~)
Thus the con~ibutionfactors can be readily calculated by equation (7.25).
, can further allocate the loss of the transmission network to each
After getting f ( k ) iwe
generator by the f o l l o w i ~equation
~ according to equation (7.2 1):

(7.30)
k=l
where 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 ($ i j E l?- (9) . Tbe loss
balance equations are as follows:
(7.31)

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 . so equa%ion (7.31) for
( i = 1,2,... N) loss allocation to the load at node j is then
13 I.

(7.33~

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
section.
25 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
~~entioned 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
follo~vingrelations
dB(k, = 0 (7.~4~
keC
e ~two nodes of bran~hk, and can be
where AB(,, i s the phase angle ~fferenceb e ~ e the

i
equation (7.35) take the values at the terminal node of branc
(~.35)

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:
le one is that we ~ a v in
e
~ e a finite graph; the other is that there exist dire
~ m p o s s i ~for
the c ~ ~ d i tofi othe
~~eorem.
Electric Power Industry R e ~ t ~ c in~ China
~ n g 3

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.
~g

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

h

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 proc cessively e l ~ r n ~ ~
eiim~atingthe node with d+(i)= 0
m e s s can also be carried out by $uc~ess~ve~y
its ~ n c o lines e(i).
~ ~ ~ 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
r+
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 g In this case,

t ~ ~on e ~ i ~ i n a t i n~gn ~ o m i nlines.
cal~ulatedresults for PDF are the d i s ~ i b u t i ~factors
n 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 ~e~
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
the wheeling cost paid by Cansu province as n in T ~ ~7.7
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.

.7

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
~n.
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 .

s
§uppo~edby the ey Project of ~ a t i o n a~cience
~ ~oundationof
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 2

%e7.7 Wheeling cost for Shaanxi and Qinghai power exchange

Exchange Loss of Line Using m e l i n g Cost ( p a n I kWh)
Hour Power Wheeling Cost
Energy Capacity Line Sum
CMW) WW> (Pan>
1 273 10.29 4410 0.01 1 0.006 0.016 0.033
2 339 13.29 4510 0.012 0,005 0.013 0.030
3 279 7.68 2410 0.008 0.004 0.009 0,021
4 33 1 11.63 3630 0.01 I 0.004 0.011 0.026
5 325 11.83 4200 0.01 1 0.005 0.013 0.029
6 335 14.80 5640 0.013 0.006 0.0 I7 0.036
7 268 7.52 2920 0.008 0.004 0.011 0.023
8 101 0.1 1 1080 0.001 0.001 0.0 17 0,019
9 “122 3.37 2160 0.008 0.004 0.018 0.830
10 -226 5.58 2170 0.007 0.003 0.010 0.020
11 -172 5.25 1870 0.009 0,004 0.01I 0.024
12 -260 5.84 3760 0.007 0.003 0.014 0.024
13 -165 1.71 2370 0.003 0.002 0.0 14 0.019
14 -189 3.34 2660 0.005 0.003 0.014 ~ . ~ 2 2
15 -143 2.15 2400 0.00s 0.001 0.017 0.023
16 -197 2.66 3280 0.004 0.002 0.017 0.023
17 -293 7.46 4090 0,008 0.003 0.014 0.025
18 -305 8.29 3130 0.008 0.004 0.010 0.022
19 - 30 0.83 420 0.008 0.004 0.014 0.026
20 0 0.00 0 0.000 0.000 0.000 0.000
21 -116 1.88 I220 0.005 0.002 0.01 1 0.018
22 -210 3.00 2700 0.004 0.002 0.013 0.019
23 0 0.00 0 0.000 0.000 0.000 0.000
24 154 0.75 1100 0.001 0.001 0.007 0.009

[I] S.Q. Gao and P.L. Chi, Several Issws Arising During the Retracking of the Chinese Economy,
Foreign Language Press, 1997,
[2] J.P. Sun, Electric Power Industry in China 1999, China Electric Power Information Center.
[3] W. Sweet and M. Hood, ‘Can China consume less coal?’, IEEE Spectrum, Vol.36, No.11,
November 1999, pp.39-47.
[4] M Hood and W Sweet, ‘Energy policy and politics in China’, IEEE Spectrum, “J01.36, No. 1 1,
November 1999, pp.34-38.
. .-

0.04

0.03

0.0

0.01

0
~
9 10 11 12- 13 14 15- 16 17 1
- -..

g for $ ~ a ~ and
~ e e l ~ ncost xi

the Electric P o w e ~ I ~ d ~1998,

s t ~p ,p . ~ ~ 6 " 1 4 1 ~
[S] Shi Yubo, 'Take vigorous action to promote power industry's reform and ~ ~ v e ~ o p ~
~ f fE ~ ~ e~ ~Q ~ ~ ~ Qs No.1,
~ ~ i Power ge e 1999,
~ e pp.7-8.
~ ~ ~
Electric Power I n d u s ~ e $ ~ ~ c ~in rChina
ing 7

[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
Enferpp~~e ~ a n a ~ e ~N0.2,
e n ~1998,
, pp.4-5.
[12] Lu Yanchan~,‘A ~ e ~ ~ d e ~ tabout a n ~then simulated
g 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.

pp.~405-1413.
[21] CXgiRE Task Force 38.04.03, ‘ ethods and tools for transmission costs’, Elech, No. 174,
~ c t o b e 1997.
r
n p r o ~ d i~ngt e r c o ~ e c t eopera~ions
~ services by the end user Case
tioopral Science ~ o u n ~ a t ~ Workshop,
on Nove~ber1996.
aliana and Mark Phelan, ‘Al~oca~ion of transmission losses to
in a ~mpetitiveenviro~ent’,IEEE Transac~ionson Power stem^, Vol. 15, No. 1, ~ ~ b
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

i o naccess’, IEEE ~ r a n s a ~ t ~ on
a l l ~ a t i o nin ~ ~ s ~ i s sopen o n Power
s S y s t ~ ~Vol.
s , 12, No.3,
1997, pp.l189-1193.
L.L. Lai, J.T. Ma, N.~ a j ~A.~~ a~ ~dand ,a , to
~ompu~~tional efficient a l g o ~ ~ h mfor
s ~ a ~ s m i s s i o10s
n s’,
~ n ~ ~ r n a t i ,Iournal
o n a ~ afElectric Power and Enerm Systems, Elsevier Science Ltd, Novem~er
Prof. Vijay K. Sood

Canada

In recent years, major changes have been introduced into the s ~ c ~ofr electric e power
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
ed
in other industries, i.e. in the teleco~unicationsand air~ine~ ~ s p o r t a ~indus~ies.
ion The
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 .
trans~~ssion 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 l ~ made upon u t ~ ~t i ~ ~ e
§ c o n t ~ u a lbeing
supply increased loads, improve reliability, delivery energy at
with ~ ~ ~ power ~ ~ quality.
v The e dpower industry has respon
the ~ e c ~ o l oof~ flexible
y AC ~ansmission systems or
e n c o ~ ~ ~ sas whole
e$ 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

s 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
n
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:
~

e Greater control of power, so that it flows on the prescribed ~ ~ ~ s m i s sroutes.

ion
Secure loading (but not overloading) of transmission lines to levels nearer their
thermal limits.
f e r between controlled areas, so that the
Greater ability to ~ r ~ ~power
-
reserve margin typically 18% may be reduced to 15% or less.
~

6p Preve~t~on 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
tra~smiss~on ~aci~itiesprovide compelling reasons to develop FACTS c o n t r o ~ ~The ~~s~
~ p r o v e m e n tof a deteriorating power quality will be an additional focus for FACTS
controllers of the future,

8.1.1 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 networks, and
~ tr~smission
~~~
260 Power System Restmcturing and ~ ~ r ~ ~ l a

ravide direct control of power flow over des~gnated~ r ~ s m i s s routes,

~on

ible AC system owes its tighter transmiss~oncontrol to its ability to m

ated parameters that constrain today’s 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
es the
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,
vol~agelimits,
1 limits of either lines or terminal equi
hart circuit level limits.

itations on power transfer are primarily

inter re~atede ~ e c ~ parameters
ca~ including vo
reactive and ~ t i v power.
e ~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 iimi~tionsis
provide^ next.

This r e q u ~ e sthe power system to retain a margin o

~ystemand still main~ains ~ c ~ o n iSin s~.
nd are able to eontrol the
for avoiding the addition ofne
traints [4] could be hrther spli

er system to ~ a i n t asi y~n c ~ o ~ i sfor

m
i ~ i t ~ few
a l seconds after a major p ion. A n u ~ b e rof e~ample§
rove the performance by the use of, s lled series capacitors, high
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

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
n, to^ or sync nous ~ o n d e n s ~and
rs
Flexible AC T~ansmissionSystems (FACTS)

-sync~onousresonance (SSR) is due to interactions b e ~ e e nthe series-

compensat~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
c o ~ ~ ~ n sp ae t~ ~i ~ to e~ disafe limits; usually this level is that desired for
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 ~ anye ~u n e ~ p ~ c t contin~enci~s.
ed

8.2.2 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. Ohm’s 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
e r sbe justified onIy if .frequent a d j u s ~ e n are
problem, c o n ~ o ~ ~will ~ s require

V o ~ t a c~ eo ~ is~accomplis~ed
o ~ by a c o ~ b i n a t ~ oofn genera~orreactive ent,
fixed or mechanica~ly s w ~ ~ c ~reac~o~s~ca~acitors
ed and m e c ~ a ~ ~ c a ~ On
r s . reactive equipment is used for coarse control while the ~ e n e ~ ~ ~ o r
~ a n s f ~ ~ e~~~t
prov~dev e ~ i con~ol.
e~

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
s, and series capacitors). Trans~issionlines
ope~atedbelow these limits to provide s e c u in ~ the
~ event of a
e r sbe to use this inherent thermal capacity in a more e f ~ c ~ $ n t
role of FACTS c o n ~ o ~ ~will
and secure manne~.

8.2.5 i ~ Limits
High ~ ~ o r t - ~Level c ~ ~ t
~ ~ can be quite difficult and expen§ive to c o ~ e c ~
The p r o ~ ~ eofmexce$sive s h o ~ - c i r c ulevel
dition is made to the ~ a n s m i s s i ~system.
n This can result in
sho~-ci~cuit levefs c r ~ e ~ i up
n g in sub-~ansmiss~on equipment.
262 Power System Restructuring and

Y
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.

8.3.I 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
1 ~ e d WCT) devices. A ~ m p a ~ s of
~ ~ S ” c o n ~ othyristor o nthe various ~ o w e r - s w ~ ~ h i n g
devices is presented in Table 8.1.
wever, owing to the higher switching losses in G devices, the ~ a x ~
ng frequency operation is limited to less than about 1 z. F u ~ e ~ o rowing e , to
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) 3

Th~~~st~r ThyristQ~
Max. voltage 8000 6000 1700 2500 3000 1000
rating (V)
Max. current 4000 6000 800 800 400 100
rating (A)
Voltage Sym./ Sym./ Asym. Asym. Sym./ Asym.
blocking Asym. Asym. Asym.
Gating pulse Current Voltage Current Voltage Vo~~ge
Conduction 1.2 2.5 3 4 1 .a Resistive
drop 0')
Switching 1 5 20 20 20 100
frequency
(kw
~evelopment 10000 10000 3500 5000 5000 2000
target max.
voltage rating
(V)
Development 8000 8000 2000 2000 2000 200
target max.
current rating

4 GTO : Gate Turn-off thyristor

IGBT : Insulated Gale Bipolar Transistor
SI : Static Induction thyristor
MCT : MOS-controlled Transistor
MOSFET : 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.
264 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
Cons~antcurrent
Fast accurate control
Higher losses
Larger and more expensive
More fault tolerant and more reliable
Simpler controls
Not easily expandable in series
Voltage source converters
Use capacitor C for DC-side energy storage
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 ,

or
e six-pulse CSC or VSC unit, employing multi-level operation (with or without multi-
hase ~ ~ 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
essor
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
us 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
n~ made in Table 8-3.

Comparison of time domain versus frequency domain comp~nsation

Fast response
Easy to implement
Computa~ionalburden is low
Ignores past periodic characteristics
~ r e q u e ~ dc ~y m a i n
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 ional
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 g~,
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.

8.3.3 F ~ e s ~e ~ ~t on ~ACT^~ Activities

u ~
EPRI of the USA has been promoting a program (EPH Project 3022) on FACTS for some
e dE
years [ 11. A number of special conferences on this topic have been o r g ~ i ~ by
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
pub~~cations 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
a s ~ ~ of FACTS controllers o f the power system.
classified under the b ~ ~ a d - bheading
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
used.

8.4.P ~ ~ n Concepts
~ ofa~~ansmission
~ e ~ ~ ~ ~
A simplified example of power flow in a loss-less transmission line, with inductive
i n gac systems with voltages V , and V, is shown in F i g ~ r e8.1.
impedance X,, c o ~ n e ~ ~two
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,) (8.1)

n
~ l spower transmission
.1 F u ~ ~ d ~ r n eonf AC
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.
66 Power System Restructuring and Deregulatbn

.4 Control of system parametersby FACTS controllers

Voltages V, and V, Shunt SVC, STATCOM

~mpedanc~ X, Series TCSC, IPC
Angles 6 , and 6, Phase angle regulator TCPAR

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.

on
Controllers which act in series to the tra~smiss~on system.
Controllers which act in a s e ~ e § / s ~ ucombination.
nt
Controllers which alter the phase angle between voltage an
A special category which encompasses HVDC controllers and any remaining
controllers.

Details of these various c a ~ g g o are

~ ~provided
s in the following sections.

8.4.2 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]:
t~

voltage support,
and
transient s ~ b ~ lim~rovement,
~ty
power system oscillation damping.

A l ~ ~ o u gmany
h versions of SVCs exist [9] (i.e. variants are TSR, TG
common one (Figure 8.2a) usually employs (either thyristor or mec~a~ically) switch
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
continuo~sl~ 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) 267

%“=Capacitive Ratlng Conanuous Inductive R%ng

(a) (b)
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
, the point of connection. This injected current is almost in quadrarure with the
m a ~ i t u d eat
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 ~ is
verified by regulating the reactive current flow through it. This is useh1 for r e g u l a ~ ~the n~
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 ndrawnt 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.
a~

Tran smmion 1ine

pu Voltage Tram ive Rating
Couptiiig *amformer

DC storage capacitor

(a)

Figure 8.3 (a) STATCOM application and (b) its I/-I characteristic
2 Power System ~ e 5 ~ and
c ~ e~ r ~n ~ ~l a ~ i o n

The ~ ~ 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
e 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).
er
Reduced need for AC filters.

ve r e f ~ e dto the ~ ~ O - ~ systema s ~ as

d
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 h o ~8.3b.Tlie
~ ~STATC
~ i ~ ~

re effective than the SVC in providing voltage support

FIexibIe AC ~ ~ s m i s s i Systems
on (FACTS) 269

Acts as a voltage source behind a reactance Acts as a variable susceptance

Insensitive to transmission system harmonic Sensitive to transmission system harmonic
resonance resonance
Was a larger dynamic range Was a smaller dynamic range
Lower generation of harmonics Higher generation of harmonics
Faster response (within ms) and better Somewhat slower response
performance during transients
Both inductive and capacitive regions of Mostly capacitive region of operation
operation possible
Can maintain a stable voltage even with a Has difficulty operating with a very weak
very weak AC system AC system
Can be used for small amounts o f energy
storage
Temporary overload capability translates
into i m u ~ o ~ evoltaae
d stabilih,

,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
container with a of 10x20 rn. The outdoor equipment i s limited to heat
exchangers, air-c utation reactors and the power transformer. A rating o f rl: 100
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
e , possibility of active filtering of h a ~ o n i c salready
heref fore negligible. ~ u r t h e ~ o rthe
p~esei~t 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
done by i n t r o d u c ~either
~ ~ a series or shunt braking resistor. Shunt resistors are p r ~ ~ e r a b ~ e
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 ofback-
to-back ~ y ~(Figure ~ s8.4)~ doeso 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
70 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 ~ fors ~many years. These mechanically operated load-tap hanging transfo
now have t h ~ § ~ o r - o p e r a ~switches
ed (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
9 d flexibility to meet peak utility system loads. A multi-temi
P to act as a power flow control device also [6,7]. A fairly rec
Flexible AC Transmission Systems (FACTS) 71

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
Coil

r e SMES operating principles

~ i ~ M 8.6

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,

8.4.3 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
~ a n s ~ i s s i oAn .TCSC can vary the ission line impedance continuously
below and up to the line’s 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
d
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 conducting). In this manner, a stepwise ~ o n ~ iso l
s ethe ~ y r i § t o ~fully
27 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
possibil~~y of SSR oscillations. A phase-locked loop (PLL) is used for synchron~s~ng the
thyristor firing with the line current rather than capacitor voltage for a more stable
operation.
~~~~~ ~ ~ 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
s . basic IPG consists of a series-connected device c o ~ ~ r i s itwo
s y s ~ e ~The t ~ gs u s c e ~ ~ n c e s ,
one inductive and the other capacitive, subjected to properly ~ h a s e - s h ~ ~voltages.
ed Thus,
whatever the angle 6 at the TPC terminals, some of the cQmponentsare always subjected to
voltage. By adju§ting 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
are energised, the ampIi~deand phase angle of the c u ~ e nare t set in one o f
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~
nt In one
type cai~edthe IPC 120 (Figure 8 . Q the voltage phase shifts are achieve^ with a cross-
connection 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 ~ion
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~ systemi ~ 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
subjected to a certain voltage. adjusting the value of these components, it is always
po§s~b~e 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) 73

VCS

.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
sinusoidal voltage, o f variable m a g n ~ ~ din
e ,series with a transmission line. This injected
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
ler in use is the ~ ~ ampe~ ~ [22] to ~~ o ~ n t eS r S
was first o b s ~ ~ ate 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
g are to lower the line’s i m p ~ ~~ ~~ cc ~r ~e, oa w~ ~~ r

sists of baclc-to-~a~kthyristors 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 capacitor’s 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
274 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.

Transm

-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].
arrestor

r e1 Solid-state breaker and current limiter

F i ~ ~ 8.1
Flexible AC Transmission Systems (FACTS) 275

It is possible to consider the switching capability of thyristors to use as c u ~ e n limiters

t
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.

8.4.4 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.

P
I V’
Parallel lransformer V’ I
h
V’

.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~,
276 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 o~
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. ~n This
l ~ ~ it possible to equalise both real and reactive power fl
~ a p a b i makes
lines, ~ a n s f e power
r 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
e (IPFC)

fS
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 h ~ ~ or subtracting a variable vol
~ ~adding
o ~ e isn o~tained
~ fkom a

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
p e ~ ~of the p e ~ e ~ d i ~ uvoltage
var~ableh i g h ~ ~ control l a r co~ponen~.
Flexible AC Transmission Systems (FACTS) 77

VB
4 - -
V'
V'

V - Input voltage

i - Linecurrent

The principles of a pliase-shifting transformer (Figure 8.14a) with a thyristor tap-

changer are discussed in [31]. Similar to a conventional phase~shifterwith a mechai~~cal
switch, a c o n ~ ~ n u o ~ svariable,
ly quadra~revoltage is injected in series with the
transmiss~online v o ~ ~ (F'I ge 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 c
a n s ~ o ~must
~ e rbe locatea close to a ~eneration
to reactive power transfer.
~innesotaBower has deve~opeda novel and
econom~cversion o P single core/single tank &bang-
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
n~ 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
on 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 )
Il28l.

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
rs be overlooked. With the latest developments in PE t e c ~ o l H
oV~ ~C
sys~emswill play an even greater role embedded in AC systems. Trad~tiona~ly, HV
~ r ~ s m i s s i oisnused only for special situations and applications:
~ong-distancebulk power ~an§missionwhere it was cheaper than the AC a l ~ e ~ a t i v e ~
back~~o-backasynchronous interconnections, and
in~~rconnect~onsusing a submarine (or underground) cabie,
ace ~ a f i s ~ ~ ~ s i ~ ~
iona transmission, power is electronically controlled, and hence an
~~~C line can be used to its fill thermal c e converters are adequate~yrated.
F u ~ h ~ ~ oowing r e , to its high-speed control, line can help a p ~ a l ~AC e l line to
maintain stability (as long as the E'NDC con not sustain ~ ~ u ~ failures). a ~ o n
~ o w e v e r owing
, to its expensive impleme C ~ n s m i s s i o nis used only for
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
~d 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.
e h e DC link can be used to increase the power
~ hetc.),
Intertie, C h ~ d r ~ p u r - P ~ dtie,
~ a n s ~ i over ~ e the
d AC system and provide additional d ~ p i n wheng 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
~s 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.
d This means th
consider multi~term~al C systems more sympathetica~~y.
G systems can materialise, however, one additional device
opmen~will be the HVDC breaker; the ects for this are excellent.
The practical d ~ f ~ c ouf l impleme~tin~
~ ~ T ~ - ~ a conve~ers
sed for high
a p p l ~ c ~ ~ has s the problem of operating GTQ devices in series. Some tec
~ o nbeen
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
rs [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
.
vi~bi$i~y of such t~chniquesfor h i g h " v o ~ ~ app~ications
ge is far from clear at present.
Flexible AC Transmission Systems (FACTS) 79

ac~-~o- ~ ~ ~ v ~ ~ e ~ s
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.

I J
AC systm1 I AC system 2
Active and reactive power can
flow in either direction
.I5 Force-commutafed BB link
In this respect, two recent deve~opi~ents
that will have significant reper~uss~ons
for
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
al 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.
al
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
reliability.

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

f-wnot~be
y ava~labIe.

q u a i i ~control by iso~a~ing dis~rbingIoads such as smelters.

of appl~cat~ons y ~ ~ p with
have a ~ r e a ~been Q this
~ ~c od~ c e p(T~
future pr~spectsare excellent.

2 Gotland 50 i80

65 Async~~~ou§
~terco~~6~ion

active and reacti

Flexible AC Transmission Systems (FACTS)

8.4.7 Other Controllers

These can comprise
(a) T~zyr~stor
-co~~ro
In this application a ected in series with a part o f 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 e r with a
t a p - c h a ~ ~ or
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.

s
8.5.1 svc

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 Trans~issi
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 osystem’s
n 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
~ansrn~ssion ~ a ~ a ofc thei ~ ~S~ n e ~ o r kwould be §evere~y1
excessive voltage ~ u c ~ a t ~ following
ons certain fault situations
system, or to severe overvoi~a~es at loss o f feeding power from
~a~~ito~a.
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
d ( T ~ ~ands ) three ~yris~or-switch~d ca~acitors(TSCs).
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 e
short periods (< 200 ms).
 Power System ~ ~ s and Deregulation
~ ~ ~ ~

essee Valley Authority teamed up with ~ e s t i n ~ ~ otou sinstall

e a 100
at TVA’s 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
n~ a p p ~ ~ c aon
~ ithe
o ~C Q ~ O ~ W ~
d Electric Co. Some cost evaluations have been reported at
3 ~onference[ 121.

8.5.3 TCS

s resently being tested in North

i ~ a n u f a c ~ r e rare

In 6991, AEP of Columbus, Ohio, with the ~ ~ u f a c ~ ~ e ~

~ r o t o switch
~ e of a single-~hase series capacitor b ~ atk
er sub§~tionin W. Virginia. Fo~~owing s ~ ~ a 788
s ~ c c e s tests,
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
section.
ith n ~ a n u f a ~ ~GB
~ r esuccessfully
r managed the install
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
e by firing angle control.
Flexible AC Transmission Systems (FACTS) Z$~

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
transformer. The rating of the i n t e ~ e ~ atransformer
te is 50 % of the main Iran
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

d
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
addressed:
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
s, 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 ~
on ~ l e c ~ o m a ~ etransient
tic pro ) and the red-time power
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 ~morel 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 ~ ,
value may be % ~ d if~ fde a ~ r e ssuch
ondition~ng(I.e. h a ~ i ~ n cancellation)
ic can also be provided along with
ower.

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

nal on
wer Transmission, 1991, pp.1-7.
n ~ i n- ~Concepts and Techno
mgorani and L. Gyugyi, ~ n ~ e ~ s t aFACTS
AG T r a n s m ~ s Systems,
~o~ IEEE Press, 2000
L.Gyugyi, ‘Solid-state control of electric power in AC ~ m i s s i systems’,
o ~ Interiiational
i u ~ Energy Converters in Power Systems, Invited Paper No. T-IP. 4, Capsi,
~ ~ m p ~ons Electric
Italy, 1989,
PACTS Overview, XEEE PES Working Group Report and CIGRE ~ n f ~ r n a t iConference
on~ on
Large High voltage Electric Systems, Chairmen: E.Lassen and T. Weaver, April 1995 T
V.K. Sood, Position Paper on FACTS T e c l ~ o l o ~Canadian
y, Electrical A§§ociation~C o n ~ c t
CEA ST-460, March 1995.
A. Erinmez, Ed, ‘Static Var Compensators’, Working Croup 38-01, Task Force N o 2 on SVC,

undamentals of thyristor controlled static var compensators in electric power

system app~i~ations’, EEE Special pub~ication~ 7 ~ 0 1 $ 7 -p ~ e- ~~n in ~~ 1987.
e~ d,
A. ~ a ~ a ‘ A d ~, l y s of
i ~power system s ~ a ~e ~i ~l n~c ~e m by e n static
~ var compen§a~o~s’~
IEEE Transactions on Power Systems, Vol.PwRs-1, No.4, November 1986.
. Machur, S u p p l e ~ ~ton ta b ~ b l i o ~ a pforh ~static VAR co~pensa~ors (SVC)
and r e ~ a ~ flexible
ed ac transmission system (FACTS~devices [ 1988-19941.
C.Schauder et al., ‘ ~ e ~ e l o p m of ~a~100
t MVAr static condenser for voltage control of
~ a n s ~ ~ s s~~i toen~ s IEEE
’, ~~ansactjons on Power Delivery, Vol. 10, No.3, July 1995,
pp. 1486- 1496.
. Mehta, et al., ‘Static condenser for flexible ac transmission aystems’3 EPRi FACTS
~ ~ n ~ e 2:~TnR 101784,
c e ~ e e t i n gin May 1992, Procee
Flexible AC Transmission Systems (FACTS) 5

1121 A. Ekstrom et al., ‘Studies of the performance of an advanced static Var compensator,
STATCON, as compared with the conventional SVC - EPFU Project ~ - 3 0 2 3 EPRI ~ ’ ~
FACTS3 Confere~ce, Baltimore, ~ a ~ l a nOctober
d. 1994.
ittlestadt, ‘Four methods of power system damping‘, B E E T r a n s ~ t on
~ o Power
~
Apparatus and Systems, Vol.PAS-89,NOS, May 1968.
[141 P. woo^, ‘Study of impro~edIoad-tap-changing for ~ r ~ ~ f o ~ e r s

damping improvement

[l4] C. Wu and U. Lee, ‘Applica~ionof simultaneous active and reactive power modula~ionof
super~condiictingmagnetic energy storage unit to damp turbine-gene~torsu~”sync~onous
IEEE Transactions on Emrgy Conversion, Vo1.8, No. 1, March 1993,
osci~lat~ons’,
ava and G. Dishaw, ‘A~plicationof an energy source power system stabilizer on the
battery energy storage system at Chino substation’, IEEE Trunsact~o~s on Power
Vo1.13, No.1, February 1998
[ 181 L. Angquist, 6. Ingesbrorn, and H. Othman, ‘Synchronous voltage reversal “A
new control method for thyristor controlled series capacitors’, E P FA ~ ore,
aryland. October 1994.
[ 191 M. Gavrilovic, 6. Robcrge, P. Pelletier, J-C. Soumagne, ‘Reactive and acti nl by
means of variable reactances’, 11th Pan-Amerjean Congress (COP1 treal,
Nove~ber1987,
P, Pelletier, F. Beauregard and 6. MO&, ‘hterphase power controller
r m ~ a g i n power
g flow w~thinac networks’, IEEE Transuc~ionson Power
Vo1.9,N0.2, Apfil 1994, ~ ~ . 8 3 3 - ~ 4 1 .
[a I] K.R. Sen, ‘ S T A T C -~Static
~ synchronous compensator: Theory, modeling aid applica~j~ns’,
IEEE PES Winter Meeting, 1999, pp.1177-1183.
E221 N.G. ~ ~ n g o r‘A~ new
i , scheme of sub-synchronous ~ s o n a n c edamping of ~orsiona~
oscilla-
tions and transient torque - Parts I and U’, IEEE Transmtions on PO
$yst@ms,Vo~.PAS-~ 00, N0.4, April 1981, and IEEE PE$ Summer ~ e e t ~ n g

/23] J.W. Ballance and S. Goldberg, ‘~ubsynchro~ousresonance in series c ~ m p ~ i s ~ ~ e d

transmission lines’, IEEE Trunsu~tionson Power ~ p p a r a and
t ~ Systems, Vol.

rolled series compensstion to avoid

[25] T. Ueda et al., ‘Solid state current limiter for power d i s ~ b u t ~ system’,
on l E E ~ransactions
~ an
Power Delivery, Vol.$, No.4, 1993, pp.1994-1801
t261 . Saarkwzi, E.J. Stacey, J.J. Bank and N.
dis~ribu~ion current limiter and circuit breaker: Application requiremen~s
lE## Transactionson Power &divery, ”IIo1.8, No.3, July 1993, pp.1155-1
~ 7 3 arady, ‘Co~ceptof a ~ m b i ~ eshort d circuit limiter and series c o ~ p e ~ s a t ofEEE
~’,
a nPawer
~ r a n s a ~ ~ i on s Delivery, Vol.6, No.3, July 1991, pp.103~-1037.
[28] L. Gyugyi et al., ‘The unified power flow control controller for i n ~ e p e n d eP~and ~
control in. transm~ssionsystems’, FACTS3, Baltimore, M ~ l a n d~, c t o b e 1994.
r
286 Power System Restructufing and Deregulation

.K. Sen and E. Stacey, ‘UPFC - Unified power flow controller: Theory, odel ling and
applications’, IEEE Transactions on Power Delivery, Vol. 13, No.4, October 1998, pp.1453-
1460.
[30] L. Gyugyi, K. Sen and C. Schauder, ‘Thc interline power flow controller concept: A new
approach to power flow management in transmission systems’, IEEE Transactions on Power
Delivery, Vol.14, No.3, July 1999, pp.1115-1123
asati, ‘A thyristor controlled static phase shifter for ac power transmission’,
E E I i Transactions on Power Apparatus and Systems, Vol.PAS-~OO, No.5, May 1981,
pp.2~50-265~.
[32] R. Baker, 6. Guth, W. Egli and P. Elgin, ‘Control algorithm far a static phase shifting
transformer to enhance transient and dynamic stability o f large power systems’, IEEE
Transactions on Power Apparatus and System, Vol.PAS-101, No.9, S e p ~ e ~ b1982. er
[33] 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.
1361 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.
[37] K. Sadek, M. Pereira, D. Brandt. A. Gole and A. Daneshpooy, ‘Capacitor c o ~ u ~ a t econ- d
s DC transmission’, IEEE Transactions on Power DeZivery,
verter circuit c o n ~ ~ r a t i o nfor
Vo1.13, No.4, October 1998, pp.1259-1264.
[38] J. Vithaya~hil,P. Bjorklund and W. Mittlestadt, ‘DC systems with t ~ n s f o ~ e r l econverters’,
ss
IEEE Transactions on Power Delivery, Vol.10, No.3, July 1995, p~.1499-15~4.
E391 A. Keri, A. Mehrbahn and P. Halvarsson, ‘AEP expenence with the 788 Mvas series capac-
itors and the controlled thyristor switch’, EPRI FACTS3, ~ a I t i ~ o r~e ,a ~ ~ aOctober
n d . 1994.
[40] 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
3022,
[41] 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.

Sen, ‘SSSC ~ Static Synchronous Series Compensator: Theory, modeling and
applications’,IEEE Transactions on Power Delivery, Vol. 13, No. 1, January 1998.
[44] 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 Cliff Walton
London Electricity Group London Electricity Group
UK UK

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
business.

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
~ were
2 lation

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 inter 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

ab~~
at the same time free industries from the cons
~e¶uiremen~s. 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~~lywith service level a g r e e ~ e n
relatively small asset ~ ~ a g group e ~and~ i nn~ e~~semial provider conb-actors, some
a ~ i moved
~ ~ s to adopt ~ o ~ c ao n1~ a c b~ se ~ e the e ~p ies and ou~ourcenon~core
a c ~ ~ v ito~ei x~ ts e ~ c~mpanies.
a~ b e n e ~ t were
s seen to be:

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.
l
The asset manager/servi~eprovider model has met with mixed su
become ~onfron~ationa~ drivers o f the service provider not neces
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
~s towards a three-layer model as they begin to s e ~ a ~ ~
a ~ e r s h i pfrom o~erationa~ m~ag~men~:
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.
~~e
~ ~ a t e g asset
i c ~ a n a g e m ~ approacl~
nt 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 ~ e s ~ andc ~ ~ n ~

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.
abi~i~-cen~ design,
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~.
ed
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
c e were published with 50% of the savings from mergers clawed back.
~ e r f o ~ a ntargets
The im~ediatereaction by PESs to the regulator’s 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
t and in the asset replacement con~acts

h limited rewards for excellent p e r f o ~ a n c eand p ~ d ~ capital

nt i n v e ~ ~ e nthe
t,
switched fixed resources onto those targets they saw as ~ a v ~ na ggood
ieving without additional investment, whilst ~ o ~ - p e ~on l ~those
~ng
that require^ investment and additional resources.

prices cut by 20-35% per-unit from

r 3% per-unit price reductions for 4 PESs from April 2001
ency savings of 19%-29%.
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
t more).
A metering ~ ~ ~ p efrom t ~2000.
t ~April 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.

It is a major cha$~engeto deliver the DPC ce savings whilst ~mprovingcustomer

service: with an uncertain incentive mechanis suggestion from the regulator is that
companies will be placed within an incentive ~ ~ e wintended
o r ~to mimic a competitive
Asset ~ a n a g e ~ ~ n t 91

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 Ofgem’s 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
i~g p ~ r f o ~ ~Somec e . companies may choose to ~ e f e ~
major new ~ n v e s ~ ~ commitments
ent 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 ~
high~i~hts 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
business and is therefore set to do so again.
r e s t r ~ c ~ r i nofgthe d~stributio~
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 LE’S and TXU’s innovative response
~ e r f o ~ challenge.
~ ~ c e Creating an outsourcing a ~ a n g e ~ withe 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 assetn 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 iC
objectives with Erontier ef~ciencyand effectiveness.

ASS nc
~ 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.
 92 ower System ~ e § ~ ~ c ~and
r ~i Ie ir ~~ ~ l a t i o ~

The asset ~ o v e r n ~ concept

ce provides for even a n o n ~ t e c ~ i corgan~sat~on
al to
from the ownership of a world class set of distribution assets and services with l~mi~ed
d with a minimal stafX
~ t y but s ~ m ioppo
s new to the e ~ e c ~ cindustry l~ ities exist in other
i n d u s ~ e ssuch as rail md a i ~ o where ~ s the own~rssee the need to
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

~ompeti~ive
cons~aints.

allows economies of
d maxim~s~ngthe returns from
sibly unique arke et p~sition
ent and operations to be ~ o n ~ a cout
t e to
~ the mo
a l of the asset governor is ~ e ~ e f oas
r ~ c i ~role r ean
e ~ ~ e ~ tand
i v eefficient
r require ntier u ~ d e r s t ~ ~of:
the g o v e ~ owill ing

vol~mesof servic

lity of work done and the value add^^

s and s ~ n d a r neces
~s
to evel lop and renew con~act

also discharge a ran

of the owner that cann
2 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
n -
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:
ct ~nstallation,
operations & maintenance and d e c o ~ i s s i o n i n gHowever,
~ one o f the major factors in
d e ~ ~ i n i nthe g overall lifecycle cost is the actual of the asset. ~ n s ~ l and ~ a ~ ~
d e c o ~ ~ i s s i o n i ncost
g ave adi it ion ally been evalu at the concep~alstage of a
project, with operating intenmce costs being considered over a fixed
p a ~ i c ~ asset.
~ a r Asset gers today are faced with d ~ i s i o on
~ s whe
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
nt 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,
t i n ~to our customers, or becoming expensive to m a ~ n ~ a ~ ,
d i s ~ ~ ~service
Life just isn’t 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.
o~ 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 ~ nthant its age. The present conditi
of how well the asset has aged over time.

Co~~dition ~ o n i ~has r ~comeg 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
ar of an asset’s 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.
Taken to its other e x ~ r e ~ite ,could mean a fully auto~ated~ o n i t ~ r i nand g re~o~in~
system complete with e ~ ~ y - w ~ ai lnmgs for an indication of wear or %heneed for
ma~ntenance.
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 the
t r a n s f o ~ e ron a re r basis, via expensi~eanalytical e ~ u i p
i ~ e x p e ~ ~ analysis
s~ve oil sample will provide a more reliable i
wear or ~otentialfailure. If neither of these t e c ~ i ~ u eenable s accurate pred
fai~ure,or reduc~ionin main~enance,then we must question their u s e ~ ~ n e in ss
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
2 Power System ~ e s ~ u c t and
~ng

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
~ble are unavai~able,collati
pu~ationenables ‘Qut~iers’to 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 ~ ~ d
point in con~~nuousl
or of wear is the time it take

ring equipmen%and techni~uesare ~ ~ e n availab~et ~ 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

mon~tori s the level of moisture in the insul form this is ach~eved
vis~ialiyinspect~ngthe colour of the silica
r e f ~ g e ~ b~ ~e ed ~ ~ ~which
e r s actively
, redu
s if the ~ o i s t u r level
e should rapidly increase.
eing’ process can effectively be slowed ~o~
r. London Electricity has effectively employed
level of m o ~ s t ~within
re 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 ~n,
carbon ~ n o n o ~ i dmonitor.
e 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 7

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
~ othen oil and contacts at various i n t ~ ~ ~
within these trials s enable us to c o ~ our i initial
~ ~ asse~ionand d e ~ ~
e t e ~ ~ n i ma~ntenance
ng intervals for diffe~entlyloaded ~ a n § f o ~ ~ r ~ "

9.13.3
Apart from the routine oil condition tests mentioned ~ r e v i o u s l ~
circuit
, breaker t~mers
e arnoun~of wear on the o ~ e r a ~ imec~anism
n 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

9.13.

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 rs

Ith check nion~torsare used to check for exce§sive vi~rationmd h ~ n c e

mon~tor~ e c h a n ~ c aear
l on th ~ a n s f o ~cooling
er syste~ s.
The i ~ i ~ ~is~nott oar vibration truest sense since it is basi ic
evice, w ~ i assi~iilates
~ h noise with wear.
in~er~ereiice detectors are
ta monitor d ~ s c h a activi
c r~~
b l ~ earth ~ o l (TEV)
~ o ~ a transient ~ ~ 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.

Understand~~g
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 ereflectl y Its
n, m a i n ~ e n ~requirements
ce 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
d a ~ consists of 8500
The s ~ ~ o n network V and 17500 km of LV under
t which it exists makes it difficult to mon~tor,~ l n e r a b to
cable. The e n v i r o ~ e nin ~ e~hird-
ularly 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 mea§ure
~ 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
~y. 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
s, 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
s of curves with v a ~ i n grates of fai~ure
their life span. The ideal situation would enable us to ntifj small increases
as the b e g i ~ ~ nofga steep increase in the failure dicted by the latter
 e s the slope on many of the small va~ationsis s
~ ~ d i c a tthat ~ ~ i

10 ;13 3 40 50 txl
How long?

ath tub curve p r e d ~ ~failure

t ~ v ~mode

entify some other means of r e are to a v o i ~

edicting ~ a ~ lif~ we
in^ §tanda~dsof network

9.13.7 bles
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:
3

t ~ g e t e dcon~itionmonitoring t e c ~ i q u e scan i tify i n ~ i ~ i d ucirc~its

al with
of failure, Some of the condition m o n i t o ~ techniques
~g includ~:
Tan 8 and delta tan 6
Zero sequence impedance
P a ~ i adl i s c ~ ~ mapping
ge
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
d~ the insu~a~on. Manufac~~n
e l y in the UK. Condit
c o m ~ a r a ~ i ~rare

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
~e
~ r e using fiber optics
uted ~ e m ~ e r asensing

series of tests have

pressure test as an indi

i v eh
re ~ x ~ ~ n stests
e ~ e a s u r e ~ ~Then t . Q ~ j e c ~ of
v e these 0th
p e ~ f o ~ a n of
c e the re~ainderof the circuit,

contin~i~y.

9.13.
.3 Partial discharge map of 1i kV circuit

es have been lo eloped at

the circuits in ~ o ~ ~ i s s ~ o n ~
302 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 303
-
~ 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
extremes,
For example, while it is clear that cable failures do not occur on a purely r ~ ~ o
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 ofe 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 t causation,
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 ted
effectiveness in changing overall performance (though it i s vital in terms ing
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
perspective
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
and e the factors that promote fault ~ v o ~ ~ aItn would
~e,
ink a i ~ at ~ encoura~ing
d such factors. A n ~ t ~ §ensi~le
er
shift the focus af ~ n t e ~ e ~towards
~ o n s the ~sitivebenefits of av
ative ~ f f e of'faults.
c~

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 30

~ r ~ d u c t iLevel
vi~

~~~~~e9.5 ~ e n c ~ m a r kperformance
in~ matrix for subsration m a i n t ~ n a n c ~

9.14.2 Asset Lijecycle

~ a n a g ~ of ~ ea nlarge
~ portfolio of assets also necessitates tbe ~ a f l a g ~ of ~ ~risk.
e~r
~ y , in usage of electricity has not been linear and we should not be
a lgrowth
~ ~ i s ~ o ~ cthe
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.
us
9.6 details the a ~ ~ r o x i age ~ a profile
~e of London Electricity’s major assets, i n d i ~ ~
peaks of i n v ~ s ~ ~~ f ~l t rthei 1960s.
~ g
30 Power System R e s ~ c ~ and
~ nDeregulation
g

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
n t of the 1960s would be a 4x 15 MVA transformer site with 16 1 1
the peak i ~ v e s ~ eperiod
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,
g
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§
a~
(average age at ~ecQrnis~iQ~ing -
36 years)

F ~ 9.7 Actual
~ ~ life in e - secondary transfomler
~ service
 07

Actual life in service. secondary switchgear

(average age a t decomissioning . 34 years)
10.0%

8.0%

6.0%

40%

2.~94

0.0%
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 teclini¶ues 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
e d life. This is ~ n t e ~ d etod rep~esenta more r e a ~ ~ sview
around the ~ s i ~ n service 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.
T T

Ex
31 Power System ~ ~ s ~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
t~~ 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

~nfluen~ediagram 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
it 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
~t 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 11

Each of these individual projects can similarly be evaluated against a variety of

such as: do more or ~ u ~ ~ kdo ’ or slower, do nothing, etc. This enables ev
e rless
rep~ace~en~re 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
eh~
it. The use of a f Q ~ amethodotogy,
1 which evaluates costs against bene~ts,
useful risk management tool for all the staff associated with and affected by the ~ecisiQns
taken.
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.
t
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
~ have
been built into these units to facilitate the transfer of data from the LV s y s t e ~when
s u ~ ~ bdev~ces
ie have been ~ a n u f a c ~ r toe dobtain the required ~ n f o ~ a t i o This
n . kin
specification would nob be possible without such a cohesive strategy.
Much o f the monitoring experirnen~l’but it is already possible to install power
outage d i s ~ ~ a n csensors
e ) 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 ~ dmoree 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
inval~bl~ 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
t~y
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 ~majorh e r task has been the development o f a more proactive version of the partial
harge mapping ~ e c ~ i q mentioned
ue 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
core cables to remove mo re and fill voids is esrablis
w ~ e r ed ~ e c t - l a ~ d les can be re~rbishedfor ~ i c a l ~less y than a
r e p l a c e ~ ~ cost.
~nt ently most HV cables in the UM have generally be
paper insulate^ with lead or c o ~ g a t e da l ~ n i u msheaths which are u ~ for this§
e . prese~there are no v~abler e ~ r b i s ~t e c~~ti q u e sfor
t e c h ~ i q ~At
cables but p r e ~ ~ research a ~ is under way to establish the
~ ~ n work

i s h ~ e not f oil and gas press~rec

f these circuits where t h e ~ a expansi
l
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
conditions.

.16
~ ~ ewill n tinclu assessment of the rel
c relati~nscQnse~uencesto the who1
iate risk control n~easures.
For power s y s t ~ ~risk
s may be consi~e
variables:

e its o w mix
~ of the co~ponentsof ris

nt.

f~~1tS . ~ ~ e c t i asset
ve m
risks o

ts with higher that 1.1

witchgear reduces the risks o f failure.

with timely r ~ ~ e ~action.
ial
31 Power System Restructuring and

A u ~ o ~ a t esecurement
d 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
g ~ the
s e c o n d a ~failure which if sustained may cause far more exte~sived a ~ a than
erhaps simple, failure.

mising the number of customers affected through active risk m ~ a g e m e n desi

t
systems and the use of appropriate protection zones,
owing the s t a ~ofs the network and keeping cust~mer§advised.
viding restorat~onin seconds or minutes, not hours.
t e of spares and skilled resources.
g ~ e q ~supplies
hing c o n ~ ~ n g e plans
n ~ y and r e ~ l a r l yexerci~~ng
them,
Laying off some of the financial risks, contract exclusions and i n s ~ ~ c e .

Some events that may ~nitiallybe cons~deredi ~ p r o ~ a bsuch ~ e , as the c o ~ n c i d e nloss

~ ~o f
~ u ~ t i pindependen~
le 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,
s,
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
nt 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
them.

r ~ncid~nts are f o ~ n a t e l comparative

y rare
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 o
~nderlyingp a ~ e ~ strends. Such analysi
for e ~ ~ ~ pthatl e perhaps
, a h proportion o f sue
s and that even these are most often as
~ n § ~ l l eord ~ a ~ n ~ ~orn that
e d a9 cerlai

ons can result in 1 u~tomers~ e i n ga ~ e c t e dfor

times w h i ~repairs
~t are e ~ e ~ ~ e d , # ~ ~ g fore si ~ s ~ e c t ~an
ons
lar e ~ u i p m e ncan
~ r
romised for prolonged p e ~ o with ~ s a § i ~ n i ~ c aloss
n t of r e s o ~ c e
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
ied out on both p ~ dmsec on^^ ~ ~
system^ from con^^^ ~ e n ~and es
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:

ro~ec~iQn o~eratio~o~e~ after

t i vmodi~cations
e and circuit out
Primary system and bwbar ~ o d ~ ~ c a t ipost-commissioning
ons ins
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.

9.163 Type ~ ~ i ~ u ~ ~ s
The economics of purchasing often meam that large ~uantitiesof the Same ty
sw~~chgear, ~ 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
identi~edcons~derab~y 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
con~~tiQns. This is icularly the case with wholly ~ d e r ~ Q u n d
where the oppo~uni u n d e ~ k live e line overhead work does not e
repeated outages CO Is0 be necessary to effect the necessary re

e failure can be managed by:

~ e l e c ~ enqgu i ~ m ~with
nt 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 ~ o ~
networks so that a type failure of one e does not result in widesprea
ne~orks.
For new types of equipment and changes to existing desi
m ~ u f a c ~ r toe 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
are:
age to overhead lines.
e c h a n ~ ~excavatQr
al damage to several cables in the same ~ e n c h .
 Power §ystem ~ e ~ t and~ c ~ n ~

e from frre in a $ w i t c ~ ~
 tive regimes that are increas
r e d of se
liver r ~ ~ u ~levels
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 ~ ~ rhowe , often how to store it an then how to use it e f f ~ c ~ i ~ e
or w i ~ ~ cost.
o~t
too much data in
sy$te~ r ~ s ~ o nto
s ea st appropriate^^ large costs in
m a ~ ~ t ~ n ~ ~ ~ .
There is a real cost to collect~~gand ~ i ~ ~ i n ~ ~

~ ~ m ~ time,
t e d in order to
r factors can be a simpl
 Power System ~ e s ~ c and
~ m g

e s a n u ~ e r o u asset
cally dis~ibutionc Q r n ~ ~ ihave s 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:
~ng

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 n ~to the lack of a strategic ‘integration architecture’ enabling the
e rdue
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
n 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
d a~~lica~on
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 .

~ n t with IEC-61968-com~liantim~erfacea r c h i t ~ c ~ r ~
Distribution ~ a n a g ~ msystem
Asset ~ a n a g e ~ e n t

9.17. I Asset ~ ~ ~ a~ ygs t e~ ~ s~ e ~ t

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~.
a t ~ d are mparatively new in many companies and
~ n ~ e ~ r systems scale of the data
collection va~idationcan be immense, SO many systems have not yet a chance to prove
their full worth in monitoring lifecycle costs etc. Proven uses at th ment are as plant
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
and defects recorded from mainten r inspection visits,
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
pr~cesses.
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
o ~ i s a~ailableabout each and every type are very jar
i n f o ~ a t i that
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

geo~ra~hical and circuit location of the faults which have t
network over at least the last three years an
customers.
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
i ~ to indiv~dualckcuits and phases at LV with~nthe d ~ s ~ i b u tsystems
c ~ n n e c t i vdown io~
ividual blocks of fiats and offices. The costs of such systems and their ma~~tenance
not easily be j u s ~ ~ ~ when
e d the consistent applica~onof simple e ~ t ~ ~ a t i o
could well s u f ~ c e .
 Power System ~ ~ ~and t ~ c

at the most reliable data comes when it is c o i ~ in~the c field

~ ~ by ~
the data co~~ection s s of faiIure ~~d who
ce of accurate data collection and to the c o ~ ~ a ~ y .
a collection t e ~ ~ n aand
l s radio te e n ~ ~nleea r - r e ~ ~ - t i ~ e
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
y
ngly s e c o n d a ~sub
able to provid~CO

once^^^^ the ~ ~ in, t hor o ~ ~or

~hov e ~
This will ~ s u a l ~inc
y

the ~ n v i ~ o n ~ e f l t
~u~ circuits and
 21

~ubte~ai~ idity, water table, s ~ n ~ s w e l l

po~e~tial,
resistivity, stability
uilt e n v ~ r o ~ e n ~ 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
the
material.
patia~i n f Q ~ a ~ icoonn c e ~ i n gc Q n s ~ a ~such
~ t sas:

e 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
r ana~ysis,
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 ~ c~r end ~ ~ - w o ~ hof
a t the ~ esuppliers.
ss

Asset ~ a ~ a gwill s to ensure that only those having a p p r o p ~ a rights

e ~need 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
n ever more essential for the eff~ctive

o ~well as asset m ~ a g e m e npurposes

For r e ~ l a t as t it is essentia~

~ 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
sequenc~sof data audits that run s ~ c ~ e d
studies, ~ o ~ ~ results a ~ withn gthose p~viouslyobt
for ~nvestiga~ion, can also be used to s ~ ~ i ~ cadv
ant

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
n , matches the point on the e v o ~ u t ~ o cn au~~ which
s o l ~ t i ~which e L
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
i y b e n e ~ t sof in&
is to eva~uatec Q n t i ~ ~ a l the
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
en~~allyhigh cost associated with both the co~~ection and an
~eaTingin mind that the most effect~veway of i ~ e n t i ~ i when ng
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
c~
ask tbe last p~rsonwho o ~ e r a ~ it. ed
Asset Management 23

sis t

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 ~
c l e c ~ c anetwo
~ in-service ~ a n s f o ~ ise rsubject to electrical and the
which can bre n the insulating materials and release gaseous
products. Qverheat~g,partial d i s e h ~ g eand arcing are three primary causes of fault-
related gases. There are many i n t e ~ r e ~ a ~methods
ive 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
ic
based on the ratio es generated from a single fault or from ~ u l t ~ faultsp~e
one of dominant nature in a transformer. When gases from more than one fault in a
e r collected, the relation between different gases becomes too comp~ieated
t r a ~ § f o ~ are
and may not match the pre-de~nedcodes. For instance, the IEC codes are d ~ ~ from ~ e d
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
o d been developed to employ fuzzy boundaries between differen~IEC codes.
m e ~ ~ has

9.19.1 The~~CD
, 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
d 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,

.19.2 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 2

Thermal fault of low t ~ ~ p ~ ~ a ~ ~ r e

1
 1~0-330kV power ~ a n s f o ~ ewere
rs

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,
r s

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 ~ ~ ~ .
326 Power System Restructuring and Deremlation

____
F(0)=0.525 Normal ageing IEC cannot diagnose
F( 1)=0.053 PD of low energy but FIK indicates a
F~2)=0.231
I00 No match F(3)=0.045 Discharge of low energy which could be at an
F(4)=0.050 Discharge of high energy early stage.
F(5)=0.000 Thermal fault (450°C)
F(6)=0.047 Thermal fault (150-300°C)
F(7)=0.000 Thermal fault (30O-70O0C)
F( S)=O .050 Thermal fault (>700"C) Actual fault will be
checked during the
next overhaul.
F(0)=0.005 Normal ageing IEC cannot diagnose
F( 1)=0.052 PD of low energy probably due to the
F(2)=0.052 PD of high energy e x ~ s ~ ~ n of
c e more
121 No match F(3)=0.000 Discharge of low energy than one fault. The
Discharge of high energy fuzzy compo~ent of
Thermal fault (<150°C) the early thermal
Thermal fault (150-300'C) fault indicated by
F(7)=0.161 Thermal fault (300-700°C) FIK is useful for
Thermal fault (~700°C) future trend analysis.

Actual fault was an

arc damage to the
core.
F(O)=0.007 Normal IEC diagnoses
F(1)=0.026 PD of low energy ~ e ~ ~ ~
F(2)=0.026 PI3 of high energy fault but actually
Thermal F(3)=0.000 Discharge of low energy both medium- and
fault (300- F(44)=0.030 hi~-tempera~re
700'C) F(s)=o.ooo Thermal fault (cl50'C) faults existed as
.003 Thermal fault ( 150-3OOOC) indicated by FIK.
,477 Thermal fault (300-700°C)
.431 Thermal fault (>7OO0C) Two locations o)
overheating damages
were Jound due lo
eddy currents and a
bad cantact.

P -
F(0)=0.479 Normal Although the gas
F( 1)=0.005 PD of low energy level is below the
PD of high energy guide value, an early
Low No Discharge of low energy indication of low.
values diagnosis F(4)=0.0 13 Discharge of high energy energy discharge by
F(5)=0.000 Thermal fault (450°C) FIK should be useful
F(q=o.ooo Thermal fault (I 50-300°C) for trend analysis in
F(7)=0.000 Thermal fault (300-700'C) the future.
F(S)=0.005 Thermal fault (>700"C)

Actual fault will bc

checked during the
next overhaul.
Asset Mana~ement 7

9.19.4 ~~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
(300-700°C 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 c
period.
It must be noted that if a transformer has no fault, th mponent F(0) always
gives a large value in th anga of 0.6-1. For example, results for a hea~thy
e r (in ppm}
t r a n ~ f o ~ are - 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.
 0.6

+.=.
0.5

0.4

0.3

0.2

0.1

0
1 114 147 178 191 218 406 413 453 469 471

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
methad

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
.
~ e ~such ~a5 the~ FIK~method,
~ the ~ § ,
c e could be achieved.
longer s c ~ ~ life
 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.
123 Ceorge Anders, Robert Entriken and Puica Nib, Risk Assessment and Financial ~ a ~ a g e ~ e n ~
rial, IEEE Catalog Number 99TP137-0,1999.
131 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 ~ ,
i~atiza~ion,and com~etition:~ansmissionplanning under ~ c e K ~~ ~E ~ ~~ E’
Transactions on Power Systems, May 1999, pp.469-465.
[SJ J.C. Hull9Options, Futures and Other Derivatives, Prentice Hall, New Jersey, 1998.
[6] J. Schwager, A Complete Guide to the Futures: ~ ~ n d a ~ e nAnalysis,
tal ~echnicalAnalysis~
~ , Wiley & Sons, New York, 19%.
Trading, Spreads, and O p t i ~ l lJohn
[7] Price W~t~rhouse LLP, The CorporateRisk Management Handbook, Risk ~ublications* London,
1996,
[S] P. Jorion, Vdue at Risk: The New Benchmarkfor Controlling Market Bisk, Irwin Professional
Pub., Chicago, 1997.
n , ~iemcyer, . Goldberg, and C. Claxk, ‘ ~ a ~ i g a t ~the
ouglas, A. A ~ ~ i aV. 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
u, of Financia~Risk Management, Swiss Bank Corporation, New York,
1992.
[I31 Eilron Capital Trade Resources, an aging Energy Price Risk, Risk ~ b l i c a t i o n sLon~
1995.
E141 R.L. Nersesim, Computer Simulation in Financial Risk Manugernemt: A Guide for Bwiness
P l ~ n ~and
~ r Stra~~gists,
s 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 University of Canterb
New ~ealand 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
t~ansmi~s~on and distribution systems and there will be power quality (PQ) i
1 location where owner€hipis 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,
ed 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
e s fuel cells), the latter in the k i l o ~ rather
~ i c r Q ~ r b i nand a~
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
s as wind and gas"~e11ed ~ i c r o t ~ r ~ i n ewith s ) p~Qrlyc
Power Quality 1

sy~ic~onisation will make PQ more difEcult to control. The increase in embedded

~enerationwill cause ~ r t h e voltager ~ a g n i ~ variations
de 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 i o n the need for ~ y s t e ~
, the ~ a n s ~ ~ i s slevel,
to transmit power according to contracts between the requested locations is
~ d ~ ~ a for
a ~ c e l e r a tthe 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
~ ~also likely to increase with dere~lation. The control1
i n t e ~ a t i o n is
asynchronous ~ ~ e r c o ~ e c t is o rcurrently
s 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
that w h e ~ e r in the of two~quadra~tor f o u r - q u ~ ~ a n t
;lijynchronous link is be an important player in modern ~ a n s m ~ s s ~systems on
~ 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
a~ voltage distortion, especially in the form of higher order

n a c o ~ p e t i t ~ environ
ve 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 nt 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
n ya continuous basis, This requires dynamic evaluation of the
s c ~ ~ i on
and current waveforms, either by local ~ ~ a s ~ eexclusively ~ e n ~ or s by a combina~onof
~ s sys~ems i ~ u l a ~ using
~ e a s u r e i ~ e nand i o ~ h a ~ o n i cstate estima~io~tec~iques.The
latter should provide more intelligent an economical solutions for the control of the
di§to~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

une~pec~edb e n e ~ t sfrom moiiitori

ta with ~ndividual~ at those custo
In the con~exto a d i $ ~ b a n c ei s a temporary deviation from the steady-
w a v e f o ~caused Its of brief durat~onor by sudden changes in
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),
oscillato~ ~ s . are illus~atedin Figures 10.1 and 10.2.
~ a n s i ~ nThese

Voltage d ~ s ~ r b a n ~ e s

.2 Voltage transients

k . main cau$e
supply ~ e ~ o rThe

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
i o ~ in line commutated inve~ers.The effect of a v o ~ ~ g e
system crash; or c o ~ ~ u t a tfail~re
 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
~ . a given system design and fault location, a certain number of c u s t o ~ ~wili
s h u ~ d oFor rs
be ~ ~ e cand ~ i s no way to prevent this process without major system s ~ c ~ r a
t ethere
changes.
n s to over~oadare somewhat more ~redictab~e.
I-lowever, i n t e ~ p t ~ o due 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
i~ n s this will obviously change if the congestion in the
of the ~ n t e ~ p t i o but
system increases,
Voltage swells are brief increases in r.m,s. voltage that sometimes a c ~ o m p voltage ~y
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
cw.
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
microseconds), Surges are high-energy pulses sing from power s y s t e ~switchin
s , directly or as a result o f resonating circ
d i s ~ r b ~ c eeither ssociated with swit
devices. They also occur during step load changes. In parti capacitor s w ~ ~ h i n
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 ~motorsa ~ are pa~icularly suscep~ibleto these ~ansients.
Impulses result from direct or indirect lightning strikes, arcing, insulation b r e ~ ~ detc.
o~,

10.I . 3 Volta~e
Sags

In Ehe present stage of deKegulation, no serious cons~derationis @ven to

n distribution levels and, therefore, there i s little incenti
~ a n s ~ i s s i oand
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 d in their
nu~~eK.
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
e, or
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
~y, 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,
n which
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].
ns
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 equipment.
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 cs the
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.
33 Power System ~ e s t ~ c and
~ n g

Percentage of nominal voltage

(ms.of peak ~ q u i v ~ ~ e n t ~

110
90

Y
Ims 3ms 2Oms 0.5s 1OS State

Fi ETIG curve

elet ~ a n s f (WT)
o~ ides a fast way of an
c u ~ ~ wav
nt the ~~~~~r ~ r a ~ ~
f r ~ q u ~ re
n~y

arly in the ~ r e s e n cof~ a

(10.1)
Power Quality 9

A sample mother wavelet

(10.2)

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 ~ e ~ and ~~ e ~ ~
c ~ l ~a t i o~ n

and the discrete wavelet coefficients are given by

(10.6)

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
n 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).

10.2.2 W a v Analysis
~ ~ ~ ~

lysis is normally implemented using ~ult~-resolut~on s

h- and low-pass equivalent filters, h and g respectively,
ana~ys~ng 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)
represe~~s 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
frequency) to o n e - ~ u ~ the e r sampling frequency, scale ains i n f o ~ a t i o n
-quarter to one-eighth the sampliing frequency and so on.
at any scale, with the final smoothed
s, i.e. scales 8,16,32, if it is is is one of the sirab able
. 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^^
s l~near
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
e ~ , and Daub10 are the mo
~ a ~ s id ei s~ ~t r b ~ cDaub8
of a mother wavelet without knowledge of the types
simpler solution is the use of one type of mother wavelet in the wh
de~ect~on and localisation for all types of d i s ~ ~ ~ c e s .
Power Quality

xi31 scale 2

scale

. I .

M u I ~ i ~ ~ ~ s osignal
l u ~ odne ~ o m p o s i ~implementation
~o~ 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
time and oscillate 1 owing to the dilation nature of the WT analysis. As a result of
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
scales.

10.2.3
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 o~ (SWTCs) are used at scales rn = I 2 3
and 4, ~ ~ s p e c t ~ (v se ~h yo in
~F 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
l 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
ing

200

0 10 20 30 40 50 60 70 80 90 100
e Voltage disturbance signal (0 1996, iEEQ

0 10 20 30 40 50 60 70 80 90 100
The SWTCs at scale I (0 1996,Z E ~ ~

0 10 20 30 40 50 60 70 80 90 100
The S~~~~ at scale 2 (0 1 9 ~ 6IEEQ
,
0 10 20 30 40 50 40 70 80 90 100
42 Power System Restructuring and ~ e r e ~ ~ a t i o n

.3 istor
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 ~e¶uenciesof
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~t

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
ed
by local and immediately adjacent conditions rather than wider zonal effects.
The main de~imenta~ s [30]:
effects of h a ~ o n i c are

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 t~on
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
~ ~ ccan cause flicker. To keep the harmonic voltage content within the
h a ~ o levels
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 ~&e¶uencies
~
active filters and conditioners.

I U,3. I ~ a ~ ~ o Sources
nic
Lower order odd h ~ o n i c ares 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,
ge 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 3

-n

m 1.0
-7
r4
2 0.8
X
I

8 0.6
@) -g
.-a
0.4
5.
0.2

01 11 13 23 25
Frequency (x fundamental frequency)

igure 10.9 12-pulse converter current: (a) waveform, (b) harmonic spectrum
 ‘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%-
~ othe~ ~a ~a ~ o ~ i c
d ei ns v ~ r § ~ pl yr o ~ o ~ to
a ~ ~ l i ~ are
s ~ e c of m 10.9b which c o ~ e s p o n dto~the time wavvefo
~ ~Figure
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.
~cs
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

h e ~ ex amp^^ of u n c ~ a r a c ~
~ o ~ common
 3

els with v ~ ~ o levelsu s of c o ~ p l e x are

i ~ app~aring
1 n o ~ - l i ~ e cQ~ponents,
ar such as AC/DC converte
harmonic Norton equivalents. They involve iterative harmonic analy
in~e~action
b e ~ thee conve~er
~ and the linear system. Further work is
1 ~ ~ e Q u sthel y effect of multiple ~tercQnnectednon-li
The system s ~ a state
~ y is $ub~ta~tially, but not completely, desmib
ark. In many eases, it is a s s ~ e dthat there
the ~ n d a ~ ~ e nfrequenc~
tal and its ~armQnic$.

he

cedwe used to solve the non-li~earequation set.

a set o f accurate non-linear e

 6 Power System ~ e § ~ andc Dere
~ ~ n ~

10.3.3 ~ ~ 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 ~ ori c~ o n ~ h a ~ o~equency
nic injec~~ons 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,
ic depending on the available info
s , be current sources or Norton or Thevenin harmonic ~ ~ u ~ v a l eAn t ~ ,
linear c ~ ~ p o n e n tcan
c o ~ r n ~experience
n derived from harmonic field tests i s the asyrnme~ica1n a ~ r eof the
readin~s.
,being the mle rather than tbe exc justifies the need for three
s. The basic compon~n~ of a t h e
~ ~ s m i s s line,
~ o nwhich can be accurate~yrepresented
model, including mutual effects a as earth return, skin
~ s then combi~edw
n line m o d ~ are other n e ~ opassive
r ~
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

n c ex of order equal to (
is a reduced system a d ~ ~ ~ a rn
n u ~ b of
e~ inject~onbusbar§,

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~
nj~

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~ P
account the ~ p e r i o ~co~ponents.
ic
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(andy there
I, component), and then using the ~ e m a i n i nportion
~ of the s
nu~eratorof a ~ ~ - 1 i indexk 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. Of 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
~ l e c ~ r o ~ e cCommission
~ica~ C). Generally, flicker i s limited to
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,
should the flicker energy (i.e. sideband energy in the vicinity of power frequency) be
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
physiologic~~ weigh~~ng factor as specified by the IEC stand
tran§form, 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
indices.
For examp~e~ consid 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 ~ andn 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
n, 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
definition, the simple a p p ~ ~ c a t oi of ~the indices (and the simplified of the
~ ~ c e sHowever,
). in some cases, indices should not be used at all. Instead, it ~ ~ gbeh t
the time waveshape of voltages and currents directly. ~ o m e ng
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 ~ made en
u has
U ~ ~ l ~ ~ - o PQ ~ esn~ ~~ ed da r are
ds
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^
WO&,~ ~ w e ~still e rneeds
, to be done to set acc le levels for events li
and ~ ~ ~ ~ ~ pThe t i voltage
o n ~ characteristic
. themselves are not
e q ~ ~ p ~i e n t ~re ~ r ~ ~ eand n ta~smaxi i m i~s s i b ~umber
~ 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 ~ ~ n ~
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
35 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,
~ o t ~ e n b u rSweden,
g, 1997.
port on distribution and transmission system perfo~ance’,pub~ishedannually by Office of
Electricity Regulation, Birmingham, UK.
[ 151 IEEE Project Group 1159.2: Power quality event characterization.
llen, J. Svensson and L.D. Zhang, ‘Testing of ~d-connectedpower”e~ec~onics
for the effects of short circuits in the European Power Electronics
Confer~nce, Lausatme, Switzerland, 1999.
. Bollen, ‘A method for characterizing unbalanced voltage dips (sags)
onents’, IEEE Power Engineering Letters, July 1998.
[l8] L.D. Zhang and M.H.J. Bollen, ‘Characteristics of voltage dips (sags) in power systems’,
I n t e ~ a ~ ~ Conference
onu~ on Harmonics and Quality of Power, Athens, Greece, October 1998.
[19] 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.
[20] 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 EneW
Conference ~ ~ T E ~ ECopenhagen,
C), Denmark, June 1999.
221) m a ~ o ~ Industry Council, formerly known as the Co~puter& siness ss
ITIC ( ~ ~ ~ o r Technology
Equipment. Manufacturer’s Association), ITIC Curve Application Note, available at

[221 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 ~ ,
L231 An Introduction 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
ns
and A ~ ~ ~ ~ e d ~ u ~ h @ m a t i1988,
Vo1.41, c s , pp.909-996.
[as] S . Santoso, E.J. Bowers, W.M. Grady and P. H o f ~ ‘Power ~ , quality assessment via wavelet
~ Transactionson Power elivery, Vol.11, No.2, 1996, ~ p . 9 2 4 - ~ ~ 0 .
~ f o IEEE
t ~ a ~mlysis’
egnevi~sky,‘Automated disturbance recognition in power systems’,
Power ~ n g ~ ~ e e Conference
r~ng (AUPEC 98), Hobart, 1998, pp.593-
597.
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 ,
1994.
[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~ Sp~nger,1997.
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,
o~*
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.859-
865.
Power Quality 1

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 er ‘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, 1999.
IEEE 141:1986, Recommended Br ctric Power Distribution for Industrial Plants.
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
~ic (E~C), Part 2: E n v ~ o ~ e n$ectiont, 5:
Classifications o f ElectromagneticEnvironments.
IEC 61000-2-1: 1990, Electroma~eticCompatibili~(EMC), Part 2: E n v i r o ~ e n t Section , 1:
D e s c ~ p ~ i oofnthe E n v ~ o ~ e-nElectroma~etic
t Environment for Low-~requen~y Con~ucted
Disturbances and Signalling in Public Power Supply Systems.
IEC 61000-2-2: 1990, E l e c ~ m a ~ e tCompa~ibifity
ic (EMC), Part 2: E n v i r o ~ e n t Sect~on
, 2:
Compa~~bility Levels for ~ow-~requency Conducted Disturbances md S i ~ a l I i n gin Public
Power Supply Systems.
IEEE c62.41: 1991, IEEE R e c o ~ e n d e dPractice on Surge Voltages in Low-Vo~~age AC
Power Circuits.
IEG 816: 1984, Guide on Methods of Measurement of Short Duration Transients on Low

to Measurements of Voltage Dips and Short ~ n t e ~ p ~ i o n s

Occurring in Industrial Installations.
Federal ~ n f o ~ a Processing
~ ~ o n Standards Publication 94: Guideiin~on E ~ e c ~ cPower al for
ADP ~n~tallation~,National Technical Information Service, 1983.
D.L. Brooh, R.C. Dngan, M. Waclawiak and S. Sundaram, ‘Indices for assessing utility
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 ~
Compatibility
ic (EMC), Part 4: Limits, Section 7:
General pi& on harmonics and inter-harmonics measurements and ~ ~ ~ ~ ~ u m efor n power
~a~~on,
supply systems and equipment c o ~ e ~ t thereto.
ed
 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

i c Power
Group, ~ n t e r - h a ~ Q n in s 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
i~ by Public

1651 IBC 61000-3-2: 1994, E

for ~ ~ o ncurrent
i c em
~: E
[66] IEC ~ 1 0 0 0 - 3 1994,
armonic current emission
6~000-~-3: 1994, Elect
~ ~ i ~ tofi Voltage n s Flicker in LQw-volta~e~~~~1~ ~ y $ t for
o n ~ l u c ~ t i oand e ~~ ~ u i ~ ~
Rated Current 1 16 A.
C), Part 3: Limits, SectiQn 5:
~ ~ ~ iof ~Voltage i o ~ and Flicker in ~Qw~VoltagG
a ~ Fluc~a~ions $upp~y ystem for ~ q u i p m e ~ i ~
d Current gncata than 16

G analysis in real-time’,
 r Loi Lei Lai
Iowa State Univer§~ty University of'~ e § t Australia
e ~ City ~ n ~ v e ~ § ~i t oy .n d ~ n
USA A~§t~lia UK
3 Power System ~ e ~ and D~ ~ r ~c~ l a t~i o n ~

S o ~ a r agents
e 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
t
potential benefits. For example, s o h a r e agents inherit
~ , (due to parallelism) and reliability (due to redundancy). It also i ~ ~ r i t s
m o d u ~ a r i speed
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.
o~~ 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 collaborat~v~ agents includes intera~tionand c o ~ ~ n i c a t i o n
be agents9 d~compositionand dis~butionof ta coordina~ionand cooperation,
conflict resolution via negotiation. These resulted in work such as I planning and game
~ht:Qr~es [17]. ‘ s m a ~ e s s ’derives from the fact that the ‘value’ gained from
~nd~vidual stan 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 ion [ 1x1 in which
agent solutions are being applied to or investigated include work~owmanagement,
network management, a i r - ~ a f ~control, c 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 ~
s~heduIing/dia~ m a n a ~ e ~ e netc.
t,
It is important to note that most agent-based s are still ~ ~ m o n s ~ ronly: ~t~rs
c Q n ~ e ~ ithemn g into real usable appiications would e even greater cliallenges, some
of wh~chhave been ant~cipatedbut, currently, many reseen. The essential ~ e s s ~ g e
of this section is that agents are here to stay, not least because of thei ity9their wide
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
. yields the classes of static or bile a~ents.
some n e ~ o r kThis
~ y , may be classed m either ~ e ~ i b e r a or
~ e c o n ~they ~ ~reactive.
ve
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 355

Thirdly, agents may be classified along several ideals and pfimary attributes that agents
should exhibit. At T Labs, three main attributes, namely autonomy, le
cooperat~oi~, 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 sQmetime§be
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 ~
smart \ / Collabo~at~ve

agent^ Agents

1.1 A part view of an agent typology

It must be emphasised that these distinctions are not definitive. For ~ x ~ p l with
e,
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 areas’ is not con
d e ‘~ntersecti~g
most expert syste~nsare largely ‘autonomous’ but,

may s ~ ~ e t i mbe e dtheir roles ~ r e f e r a b ~ y ,

e sc l ~ s i ~ by
odd Wide Web ( ~i n ~ Q) ~ a t i agents.
on 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
g

~esearc~ers are also a ~ b u t ~ en~go ~ i o nattitudes

al 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
in~ agents [NI? In essence, agen in a truly ~ u l t i - d i ~ e ~ ~ i ~ n a
n one another, or per
space. It is quite possible that agents may be in c o ~ p ~ t i t i owith
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 , applicat~onsop 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
. le
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 ~ v e systems may include one or several of
~ n c o ~ ~ a b o r a ~agent
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
dis~buted
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 ~
t ~ n ~other agents, as is the case with c o ~ ~ a ~ o r~gents.
c o ~ ~ a b o r awith a t ~ v ~~ o ~ ~ a b o r awith
ti~g
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
lar app~icationsuch as 1 system. The user’s agent
itors the actions taken erface, learns new ‘short-
better ways of doing the task. Thus, the user’s acts as an assistant,
erates with the user in ac~o~plishing the task. As for
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 7

other agents for advice (i.e. learni~gfrom peers).

n other agents, if any, is limited ically to asking for a d ~ ~ can
Their c o o ~ e r ~ t i owith e,
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 ~
ith one or or^ computer appbica where boring and laborious tasks could
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
e d~~ ~t ifor
s neither a necessary nor , ~ u ~ cc ia ~ 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 ~ ~ :

o ~ thow ~ an
~ does ~ ~ : ~move ~ place
e .From t to place? How does it
move?
3 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 user’s behalf?
rmance issues: what would be the effect of having hundreds, thou$ands or millions
f such agents on a WAN?
Inte~operabi~i~/com~unication~rokeri~~g services: how does the user provide
e ~ n g / d i r e c t o r y ” ~services
e for locating engines andor s p e c i ~services?
~ How
the user publish QT subscribe to services, or support broadcasti~gnecessary for
some other coordina~~on approaches?
The ~ ~ for developing
~ iin f o ~ a t ivo ~ i n t e r~nagents
et ~ simply ~a n e e ~~ d e for
is ~~ ~ 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, the

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 i
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
The key ~ y p ~ ~ ~fore having s i s h y b agents
~ ~ or ~ c ~ ~ t e c ~
applica~~ons, 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
e , is
term goa~-orientedissues. For ~ x ~ p lthere
agent by comb in in^ the interface agent and MO
mobi~eagents to harness fea
other co~b~nations.

etero~eneou~ agent sy r a ~of~ at~ least two or more

fer to an ~ n ~ e g setup
which belong to two or more different agent classes.
I n ~ o ~ a ~Technology
ion Application 35

also contain one or more hybrid agents. ~eneserethand Ketchpel 1291 a~iculatec ~ e the ~ ~ y
~otivat~ori for heterogeneous agent systems. The essential argument is that the wosl
abounds with a rich divessity of s o ~ ~ a~rreo ~ u cproviding
ts a wide range of services for a
r ~ y range of d o ~ a i n s .hough these psograms work in ~sola~ion,
s i ~ ~ l a wide there i s an
increasing demand to have them i n t e ~ o p e ~ ~ hopefully,
~ te in such a manner that they
provide ‘added value’ as an ensemble than they do individually. A new domain called
b a ~ ee ~
a ~ ~ ~ t -software 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
ion (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~
them in order to pa~icipateand intero in cooperative hetesogeneo~ss
The legacy software problem may b orated because it could obv
costly s o ~ a r rewrites
e as agents ‘new leases of life’ by
~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
~es§age-ba§edinterface 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,
e agents use a common language with
They h~ghligh~ three ~ m p o ~ questions
nt raised by the new agen~-osi~nted
so~wae
e n ~ ~ n e e n n~ ga r a d i gThey
~ . inciude:

priate agent co~mun~cation language?

n gthis c o n ~ ~ c t 1e d
apable of c o ~ u n i c a t ~ in
at commun~cationa s c h ~ t e ~ ~are
r econducive
s 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
e~ to achieve coordina~on.The d i s a ~ v ~ ~ of
a gthe
e
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 ~ ~ e‘co~versatio~’
ct amongst agents~
3 Power System R e s ~ c ~ rand
in~

Agent Agent

I I
1-2 A federated system (adapted from 1293)

General Issues and the Future of Agerzts

from t e c ~ i c issues,
a~ as mentioned earlier, there is also a
~robl~m s ~ are looming. They include the following:
which

rivacy: how does the user ensure that a g ~ n ~ sa ~ n much ~ i nn e e ~ e ~

acting on the user’s behalt?
Legal issues: ~maginean agent offers some bad advice to other peer a ~ e n t rs e s ~ ~ in
~~ng
~ ~ a ~ i l i to s people; who is r~sponsible?
t i eother
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,
~rn~len~~ntation, ~ ~ g i o commodity
na~ exchanges will play a key r
ele~trici~.
This section assumes a ~ ~ e w o which r k has been described in
13 1,321. ~ o m p ~ ipresently
~es having both generat~onand d ~ s ~ i b u t ~facilities
on would be
d separa~eprofit and loss c ~ ~ ~Power
d i v ~ ~ einto 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
li~ (N
r e l i a ~ i l and
i~ s e c u ~ ~ antile associations ( E M S ) will e m e r ~ ein
this co~petitiveelectri ill promote liquidity and as an i n t e ~ e ~ i a t e
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
n , 30 minutes) in the next 30 days. Forward contracts
other d ~ ~ a t i o e.g.
traders to buy or sell firm e l e ~ ~contracts c i ~ as specified in the contract from 1 to 18
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 o~ligationto buy or sell.
t buy or sell w i ~ h o the
holder must pay an u ~ - ~ o nremium.
t 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.
362 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 succe§s~lideas of the better
agents.

As mentioned previously, it is quite likely that regional c o ~ m o d exchanges

i~ 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),or who
. CENCOs and ESCOs cooperate with the IC
that the energy transactions resulting from the matched bids do not overload or ren
e l ~ ~ ~transmission
ica~ 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 minimise risk. A ~ t h o ~ provisions
d e s i ~ e to gh 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
~nd
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 3

figure shows how the ‘put’ works. The long trader pays a premium to lock-in a maxi^^^
price (exercise price) that he/§he will have . The short trader
prem~~im in return for promising to sell the

9 Terminal
Price Price

Using put and call options

value of the option has been the subject of some a e ~ a tA

~ .c
and SchQie§put together their formula which has been
other commodity markets. Marshal1 [33] states tha
r e ~ ~ ithat:
re~
The ~ ~ Q interest
~ - t rate e is~ and constant.
The una~rlyingasset pays no as.
The u n d ~ ~ ~ yasset
i n g is e ~ ~ c i ~priced.
nt~y
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 )

where:
2’ = strike price

r = risk free rate

~ (= cumula~ive
~ ~ normal
) ais~bu~ion
T = ~ x p i r a ~ date
on
t = c u ~ e ntime
t
344 Power System Restructuring and

11.3.2 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
t using control theory, it is g

t~ 5 with~ usin~ s

is relatively smooth
s are another search
~ n f o ~ t i Technology
on Applica~on

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

s Agents
~ p t i o n with

A simple electricity market with four generators that provide

is modelled. ~ e n e r a ~ are
o ~ d~spatched
s to meet demand and a
from the aggregate ~ ~ g i cn a curves
~ o f the dispatc~edgene~tors
prices of $15, $20, and $34) are offered with valuatio
les and the ~ a r ~ e t data. ~A-basedagents then buy and sell the o ~ ~ ~ato n s
3~6 Power System ~ e 5 and ~ ~ ~ n

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
on.

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 ~ ~ kpricee t in an iterative procedure re~iini§centof wit-
the 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
rod~cespower as long as the market price does not fall below §upplier’s m ~ n i m ~
itial cost (which is determined by their minim^ product~onlevel).

1800

1700

1600

1500

1400

3350
0 20 40 60 Bo 100 120 140
Demand

ernand on vertical axis ( M W ) versus time (hours)

Generator parameters

Generator a b c pm pm, LU, hmex

1 100 6 0.005 100 600 7.0 12.0
2 150 7 0.004 120 700 8.0 12.6
3 200 9 0.006 150 750 10.8 18.0
4 250 8 0.007 200 800 10.8 19.2
jl___

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 11r e‘7. 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 7

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
for whom it is p r o ~ ~ to b produce
~e at the discovered price. If price d ~ 5 c o does
v ~ not
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 thei 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
i~ 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
used when calculating the B1 oles formula. For a given hour, sigma is ca~cula~ed
using a window of the last period hours prices. The s ~ n d a r ddev~ationof the
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.
PEP
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
y buy and sell signals. These signals are ~eneratedu s ~ ag
GA to vary the coe~cientsin a mQdified ~ ~ a c k - ~ c h ocalculation.
les ~ 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.
les 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 ) is
greater than the Market Price. Similarly, if a new d l and d2 are calculate
gene^).^ and the Market Price is 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.
3 Power System Restructuring and ~ e r e ~ l a ~ o n

IQ

~ a l on vertical axes ( $ / ~ W vs.

1.7 M a ~ ~ icosts )

__ 1
29
0 20 40 60 Bo 100 120 140

Spot price on vertical axis ($/MWh) versus time (hours)

~ n f o ~ a t i oT ne c ~ n o l Application
o~

0.
20

Standard deviation of spot price on vertical axis versus time

37 Power System ~ e and Deregulation
~ ~

Valuation for Put 0 (strike=$l5) Valuation for Put 1 (strike=$aO)

6 10
$ $
4
5
2

0 0
0 28 40 60 80 100 0 20 40 60 80 100
V ~ l u a t i ofar
~ Put 2 (strike=$25)
$
$

0 0
Hours
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 child’s genes can be mutated in four different ways (bearing in mind that the
genes are real-valued):
1, 2% of the time the gene is r e ~ ~ a c erandomly.
d
2. 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..
n 11.(Gen
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
disc~dingwh has collectively learned about the ‘re~sonable’ran
a coefficien~, because the space for real numbers is infinite.)
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.
2

1.5

0.5
0 20 40 60 80 100
Maximum Fitness

-15 .

-20 .

3
Minimum Fitness
5r----- ' 1

1
0 20 40 60 a0 100
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.

na wer
m
Solving the optimal power flow (0 m is ~ n d a to~ the~ ~ n b u~n d~l i nof~
associated with n open access and is of increasing
dereguiated environment of the electricity
ension n o n - l i ~ ~optimisation
r
which is difficult to solve. The ~ o ~ p u t a ~ ~difficulties
onal in solving the OPF prob
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

~nt

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 ~
resented.

11.4.1

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
a§

minf(x, U) (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 ~
generator reactive po ) is the ob~~ctive to be optimi
power ~ o n s ~ a i ~ t s ; are the ~ ~ i e q u acloi n~ s ~ a ~ on
n~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~onsor 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
a~ 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
ed 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
g

ased on the EP me~hodology, an a l g o r i t ~for solving the PF ~roblemcan be

. basic f l o w c ~of~the algo~thmis shown in ~
e s ~ b l i s ~ e dThe 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
v ~ ~ a b S~ ~e e~ c. ~ ~the c ac ~o l~~~ o ~ v~aa~ ba b~~eeare
s ~ p e c i ~ epower
d on at all
o r nodes other than the slack node, the specified voltage m
g e ~ ~ r a t (PV) 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 ~

Zis~~iuon:
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
Pmw, we have

(1 1.2)

where U{Pm,, 1
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
e
ect to the objective being optimised. In the case of active and reactive
tness of individua~i will be,
M
f i = (11.3)

K , ( v ~- 1 . 0 ) ~if Vj > v,- or V, <' V

VP, =
otherwise

otherwise
~ n ~ o ~ aTechnology
~ i o n ~pplicat~oi~

I initialise Population
I

Make a gradient step

Evaluate loadflow and assign fitness to

altered candidates

~ ~ 11.13 u ~of EP-OPF

g Flowchart ~

In tile above ~ ~ u a t ~ o nis, the ~ a x i ~ u ossible

m cost of g e n e r ~ t i oand
~ C, is the
eneration cost of indiv~~ual i. The term V?, denotes a penalty term on PQ or swi
~ ~ g voltage limits Y,~’”,
node j for v ~ o l a preset 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
population : 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
calc~~~ated
as
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 me^ of zero and a s
deviation of oJ,The e x ~ r e s s i ~esigned
I o~ 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
loc
~~~~~~~: 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 ~l
e slack unit is unit 1, the total available capacity o f uni

-N (1 1.6)
i=2
~xce$sivegeneration of the slack node is

2
(11.7)

is the SUM of the active power demand an the tran~rnissionloss the value of
e ~ y load flow s ~ ~ u t i oofn
which is set to that found in the i ~ e d ~ a t prev~ous
The loading of unit 2 is then modified according to

(11.8)

exceeds the maximum loading o f unit 2, it is

cessive gener~tionof the slack node left to be sh
Information Technology Application 377

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
~ ~ ~ h a n iiss ruse
n on from the two
I so~utionss h o u l ~
selection*The selection t e ~ ~ n i used q u ~is a ~ ~ ~ ~ n aschemern~nt
their co~espondi
series of N, t o ~ ~ n ~ m
~ ~ p o nEach ~ ~j ~ d§i v. i d i~isa a~s s i ~ ~ ae wore
d s, according to

j=1
(I 3 * 10)

where J; is the fitness ofindi ual i. The opponent r, is c

tes the ~reatestinteger less th
1 [0,l]. The k highe
are t the ~~ ~ d~ i vini the
a as ~ d next
~ ~ ~~e ~ ~ ~ r a t i o n .
- 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.

11.4.5 ~ r ~ ~ iAccelerat~o~
ent
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 le 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,
led. To achieve this acceleration, a ~ r o p o ~ of o nthe popu~ationis moved in
the dir~ct~on of the negative gradient. This is achi
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.

n,
ation. Reactive power penalty terms are not includ
SD f o ~ ~ u l a t i oexcept
n for the slack node, which cannot be switch
process. The effect of generator node sw~tchin in the load flow routine creates
e sthe solution rocess. These disturb
d i s ~ r b ~ c in
metho~$such as SD diverge or converge to local optima. However
o p t ~ ~ i ~ ascheme
~ i o n ese ~ r o b ~ e mare
s avoided.
o reflect any penalties in the fitness function (
not inc~udedwithin SD will often discard solutions produced
will usual^^ incur gre p ~ ~ a I t i in
e s(11.3).

hrn p e r f o ~ swell on convex ~ r o b l e ~whe s

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
s a pr
and discontinuities in fie gradient.
As the step is bas this gradient, it is possible for the solution to cross the
d i s c o R t i ~ uwhere
i~ 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
. bound~ies,while
Iobal EIP ~ ~ e ~~~~h w omutat ~ ~
Information Technology Application

11.4.6 A ~ p l ~ c ~ tSfu
ion
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
pro~ramwas execu ~entiL~mFro computer. The speci
~ system data are s u ~ a ~ i s in
a l g o ~ t hand e dthe Append~x, In all cases, the standard
IEEE 30-bus loading is used.

as^
In thi are represented by quadratic functions from [
s ~ m a ~ s ine dTable 11.2. The program was run 100 times with the se
i ~ .average cost of solution obtained was $803.51 with the mi
A p ~ e n ~The
$802.62 and ~ a x ~ m $805.61.
u ~ The average execution time was 51.4
i o ~ for the ~ i n i m u mcost are provided in Table 11.2.
s o ~ ~ tdetails
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)

Bus P,"'" r,mm ,"" K=- Cost Coe~icients

No. MW MW MVAr MVA a b C

1 50 200 -20 250 0.00 2.00 0.00~~~

2 20 80 -20 100 0.00 11.75 0.01750
5 15 50 -I5 80 0.00 1.00 0.062~0
8 10 35 -15 60 0.00 3.25 0.00834
11 10 30 -10 50 0.00 3.00 0.02500
I3 12 40 -15 60 0.00 3.00 0.02500
Generation inpu?/outputfunction c,= a, +b,e + C , e 2
6
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 being 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
3 Power System R ~ s ~ c and
~ ~ere~ulaEion
~ n g

d ~ ~ o n s ~that
a t ethe~ D has d~~ficultieswith 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

I -

- -

5 10 15 20 25 30
Node

Voltage Profile Solution in Case (b)

Generator cost coefficients in case (b)

Bus From To Cost Coefficients
No. MW R4w a b c
50 140 55.0 0.70 0.0050
1
140 200 82.5 1.05 0.0075
20 55 40.0 0.30 0.0100
2
55 80 80.0 0.60 0.0200
~ ~ n e r a t i oinput/output
n c,?*
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
x c ~ ~ ethe
of n Q ~ - c o ~ v eeost s , a b i ~ of
i ~the
e l mechan~smsof
sol~tiQnis great~yreduced. The ~ ~ a l lsearch
method for a dirccted local search, ~ ~ o w eperform
v ~ ~ , well in these cases.

Generator cost coefficients in case (c)

ax Cost cQefficien~$
US No,
MW MW a
b C d e

1 50 200 150.00 2.00 0.0016 50.00 ~.0630

2 20 80 25.00 2.50 0.0100 40.00 0.0980
Gen~ra~ion
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 ble
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

h4 (11.11)
fi E

/ k

KJ(vk
-1.0)~ if V, $1.0, k aP
VFk=
othe~ise

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
e 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
r 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)

P, 173.848 140.000 199.600 140.000
p2 9.998 55.000 20.000 55.000
Ps 21.386 24.165 22.204 24.458
P8 22.630 35.000 24.122 33.849
PI, 12.928 18.773 14.420 14.518
PI, 12.000 17.53 I 13.001 23.322
Vi 1.050 1.019 1.050 1.045
V2 1.034 1.048 1.061 0.952
V5 1.005 1.038 1.043 1.004
V8 1.016 1.055 1.036 1.027
V,, 1.069 1.OS5 1.100 1.044
V13 1.055 0.980 1.038 0.990
t,, 1.020 1.010 I .030 1.030
I,, 0.900 0.930 1.MO 0.940
t55 0.950 0.930 1.010 0.910
t3h 0.940 0.970 0.980 0.940

een widely used in the power in

e s ~ forecasti
relaying s c ~ ~ r n load
 Power System Restructuring and ~ e r e ~ ~ a

~rocess~ng 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 e§ti~ateisba bar voltages in a load flow problem.

Figure 11,17 shows a cal A” for real e are n n~mbero

nodes, rn number of hi nodes and I nurn tota~lingthree lay
is ~ e ~ is ofreely
~ extensib
k All the x and the w in
rs within an i n ~ e ~[O,
a l I].
erscript of each w that w belong^. A set o f
uts, dk,for b l ,...,2, ~ o ~ ~ s p oton adset s , ...,a, is used as ia
i ~of~i n ~ ~ txj,j=19
ard sigmoid function is e loyed and the ~ollowinge ~ u a t ~ ohol ns
1st 1st
hidden node OULPUL node

7 A typical ANN for real numbers

 - 1
k - ni
=1, ... 1
)

i=l
(1 1.12)

- 1
i n
i = l , ..., rn

J=I

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 ~~' ~so that
o at~ ~ t ~
,the ~ o l ~ ~ w holds:
~ng

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
3 e s t ~ c ~ and
~ n~ ge r e ~ l a t i o n

~ o ~ p nl ~~ ~xb exir sand is clearly show^ in the ~ o w ~ r

~ x2, the opera~i~n
11.18.

(1 1.15)

where j =

ask e l of the newly

~ designed
~ 'complex'
~
Information Technology Appli~a~on

(11.116)

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:

(11.17)
In order to test the p e r f o ~ ~ of c e the newly deve~Qped‘co~plex’ versus the
co~ventiona~ ‘real’ 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.

0 = x+-1
x
(11.18)

For the i ~ p ~ e m e n on ~ athe

~ oconventional
~ ‘real’ there are ~ W O~nput
hidden nodes and ~ W Qoutput nodes. For the imp on on the new ‘comp
there are one input ~omplexnode, three h~ddenc o m p ~ ~nodes x and one
node. All values of w for both the mnve are set to one ~nitially
before ~aining,i.e. a fair initial guess, and itrarily set to 1.5. The
h i s ~ of
o ~s ~ u ~ errore d of the nine training two ANNs d ~ n ~g ~ is ~
shQwn in ~ ~ g u 11 r e-20. It can be seen th ite~ationsfor the ‘ c ~ m ~ l e x ’
ANN to arrive at a total squared error o f ile the ‘real’ ANN can only
~ c h ~ e av etotal square error of 3 . 8 ~ 1 0after
- ~ 23 000 i t ~ ~ ~ i oAfter
n s . the two
) a value of x = 0 . 2 5 ~ ~ . 2is5 two networks while the c
should be 2.25-jJ.75. The ‘real gwes an output of 1.85-jl.4, i.e.
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

0 x
5.1 - j4.9 0.1 -+ j0.l
2.1 -j3.8 0.1 +j0.2
1.1 -j2.7 0.1 +j0.3
4.2 j1.9
~
0.2 +j O . l
-
2.7 j2.3 0.2 +j0.2
I .74 - j Z 0.2 +j0.3
3.3 j0.9 0.3 +j0.l
2.61 - j1.34 0.3 +j0.2
1.97 -.j1.37 0.3 Cj0.3
Info~at~~
o n~ c ~ nApp~icat~on
o i o ~ 3

0 0

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,t 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
io~ of one
complex hidden node and one ~omplex
bjective of this simulation is for detailed
reduced by 10 times CO e
Figure 1 1.21. It can be seen e
b e h a v i ~ ~ofr two separate NNs ery poor, as expected came there is no cross-
i n ~ Q ~ a t ib~tween
on 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 are
widely used in electric power systems and, thus, the ‘complex9 design shod ted
3 9 ~ Power System R ~ s ~ andc ~ e~ r ~~~ lna t ~
ion
P

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 ................................................................................................................................
7 ....................
\ ...........................................................................................................

.....................................................................................................

..................................

~ i 11.21gError~history~of three
~ N s for comparison

11.5.4 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
n 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.
n 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
pa~~meters are shown in Tables 11.7(a) and 11.7(b) below:
~ n f o ~ a t i oTechnology
n Applica~~on 391

bu

~ g The ~six-bus~ network

i 11.22 ~ for load flow computation

.7(a) Busbar power for load flow study

Bus PI,, Qio, pgen Vsp,

bus-1 0 0 _-- 1.05

bus-2 0 0 0.5 1.05
bus-3 0 0 0.6 1.07
bus-4 P4 Q4 _-- ".._
bus-5 Ps Q5 -*- -__
bus-6 P6 Q6 --_ _--

Network parameters for load flow study

From To R (P.U.) X@.u.) B (P.U.)
bus- 1 bus-2 0.1 0.2 0.02
bus-1 bus-4 0.05 0.2 0.02
bus- 1 bus-5 0.08 0.3 0.03
bus-2 bus3 0.05 0.25 0.03
bus-2 bus4 0.05 0.1 0.0 1
bus-2 bus-5 0.1 0.3 0.02
bus-% b~s-6 0.07 0.2 0.025
bus3 bus-5 0.12 0.26 0.025
 Power §ys~emR e ~ ~ ~ ~ i n

b~s-3 bus-6 0.02 0.1 0.01

bus-4 bus-5 0.2 0.4 0.04
bus-5 bus4 0.1 0.3 0.03

14 training examples, shown in Table 11.8, have been generated by the sofhvare
g the two ANNs. In this case, the voltage at bus-
for l e ~ i n by
e three gener~torsmaintain constant voltages at the c o ~ e s ~ o n d i

3.8 Training examples for the neural networks

0.7ij0.7 0.7J-jO.7 0.7+j0.7 0.97$-j0.089

0.9+j0.9 0.9+j0.9 0.9+j0.9 0.864-jO.137
0.9+j0.7 0.7-tj0.7 0.7+jO.7 0.969-jO.101
0.7+j0.9 0.7+j0.7 0.71-j0.7 0.960-jO.088
0.7t-j0.7 0.9-tj0.7 0,7+j0.7 Q.962-jO.l15
0.790.7 0.7+j0.9 0.7+j0.7 ~.944-j0.084
0.790.7 0.71-j0.7 0.9+j0.7 0.964-jO. 108
0.7Cj0.7 0.71-j0.7 0.7-i-jO.9 0.95 190.086
0.9-kj0.7 0.9+j0.9 0.9+j0.9 0.883-jQ.137
0.7+j0.9 0,9+j0,9 0.9-tj0.9 0.872-jO.125
0.9+j0.9 0.9Cj0.7 0.9+j0.9 0.903-jO.142
0.9+j0.9 0.7+j0.9 0.9+j0.9 0.882-jO. 108
0.9+j0.9 0.9+j0.9 0,9+j0.7 0.894-j0.~40
0.9+i0.9 0.9+j0.9 0.7+j0.9 0.880-jO.116

here fore, inputs to each

‘real9 and three inputs to the ‘complex*
two o u ~ u nodes
t 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.
B
load flow network is learned by the ‘real9 and ‘CO
~ o m b ~ n ~ tof ~ oP4,n sP,, P6, Q4 and V5.The ‘real’
4
. The initial v a ~ ~ eofs all wei
S 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
ion Application 39~

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.

0.08

0.07
b

U
2 0.05 ~

(B

0.04 -

0.03 - C~nventionalNN

0.02 - Gomplex PlN

0.01

0
1 21 41 61 81 101 121 141 161 181 201 221

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
to test the ability of ge~e~alisation of the two ANNs. The P, and QIunder test are shown in
Table 11.9 while the results are shown in Table 11.10.

TaMs 11.9 Test cases €or the neural networks

Case P4+jQ4 Ps+jQ5 P6+jQ6

I 0.77i-j0.82 0.75+j0.79 0.84+j0.73
2 0.72+j0.76 0.88+jO.S1 0.77-tj0.80
3 0.83-tj0.87 0.72+j0.79 0.82+j0.89
4 0.75+j0.77 0.82-tj0.89 0.80+j0.76
5 0.841-jO.81 0.71+j0.77 0.79tj0.82
G 0.88+j0.81 0.83+j0.87 0.751-j0.82
7 0.80+j0.80 0.80ij0.80 0.80+j0.80
I
394 Power System Restructuring and Deregulation

8 0.61-1-j0.69 0.92+j0.95 0.781-jO.67

9 0.58-tj0.69 0.76+j0.94 0.97-tj0.8~
10 0.791-jO.87 0.61+j0.57 0.94+j0.68
I1 0.60-tj0.60 0.6O+jQ.60 0.60ij0.60
12 l.OO+jl.OO l.OO+jl.OO l.OO+jl,OO

Comparison of the neural networks

Case V, /Correct V, Meal NN Ys/Complex NN

1 0.935-jO.109 0.920-jO.1I I 0.932-jO.108
2 0.924-jO.1 15 0.921-jO.108 0.922-jO.
1 16
3 0.912-jO.103 0.923-jO.115 0.919-jQ.102
4 0.91790.110 0.922-jO.109 0,919-jO.114
5 0.932-jO.101 0.923-jO.2 14 0.931-jO.101
6 0.907-jO.113 0.923-jO.118 0,910-jO.113
7 0.924-jO.112 0.92290.113 0.921-jO.112
8 0.923-jO.113 0.919-jO.101 ~.922~0.114
9 0.897-jO.105 0.920-jO.105 0.920-j0,120
10 0.974-jO.108 0.923-jO.112 0.970-jO.106
11 0.993-jO.064 0.914-jO.077 0.960-j0,062
12 0.785-jO.169 0.928-j0.141 0.889-jO.160

o Figure 11.23, although there are on t r a ~ ~ nexamples,

g it can be seen
that, initially, the total squared error of the ‘real’ is smaller than that of the newly
~ e v e ~ o p e~comp~ex9
d ANN. Actually, after 500 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 r 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.
y 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 ewhenr , 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
o~ Application 95

.4
Since the 1980s’ formation process in^ has exploded. Process power has doubled
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, interactio 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
(VDU) to receive output m the system. With the development of virtual re
syst~ms7 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 io~
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
the user to i ~ ~ t ~ rin a crte a ~ - ~ ~with
m e a computer-generated e~vi~onment in a s i ~ p l ~ ,
‘natural’ m ~ n e rw7 ~ t ~ othe u t need for extensive mining. Pres
av~i~able 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 intan~ib~e concepts [54].

11.6.1’ 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
3 Power stem ~ e ~ ~andcDere
~ i n ~

the user is focused on the tas in hand. ~ ~ e presen~e

~ i is o ~
to be the pr~ductof several param
ity, s t e r ~ s c o p ~vic field of regard and the of the display. For
VE will incr~asethe

in i s ~ ~ and~ ~theo level

n of imersi
factors ~ v o i v e ~ .
 terns are not re

T systems (adapted from [SS])

Main ~ e ~ t u r e s

Scale LOW ~e~i~i-High High

Sense o f ~ i ~ Low
~ t ~ o ~~ e~ ~ ~i ~ m High
aw~cn~ss
Field of regard Low Medium High
La Low Low
Sense of immersion ~ o n ~ L ~ w Mediu~-High

Vision i s the m a i ~sense th d e ~ i ~ e rhave

s co~cen~ate
ed such as 3-D graphics, vwi
shade, etc. V s c~o ~ p ~l e xand~ concen~ateson ~ n t e ~ r e t a tof
~ i s very 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
betow.

II.~.6 Cave
Gave is a small room where a computer"generated world is
ro~ect~on 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
ce
the same time. It seems that this t ~ c ~ o l o g i c solution
al i s p ~ i c u I ~ appropriate
ly for
cockpit simu~a~ions as it allows views from differ~ntsides of an i ~ a ~vehicle. i n ~

~~lepre§ence systems immerse a viewer in a real world that is ~ a p by~video ~ cameras

~ d at
a d ~ ~ location
~ a n and
~ allow for the remote m ~ i ~ u l a t i o n
~ ~ a ~ o Telepresence
r§. is used for remote
exp1orai;ionlmanipulation of hazardous e n ~ ~ r o ~such
e n as ~ sspace and u n d e ~ ~ ~ ~ ~ e r .

logies of ' ~ u g ~ e n t ereality'

d allow for the view of real e n v i r o n ~ e ~with
ts
o s e dobjects. As a matter of fact the
s ~ p e ~ ~ ~ virtaaI 's view of the world is
sup~lementedwith virtual objects and items whose mean in^ is aimed at e ~ c h i the n~
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
1~ and theoretica~~hysicists
into its domain. Simply speaking, the t e c ~ o l por ~ o v i ~ hei
e~
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 of
~ 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
~ns
i s assumed that VR will reshape the interface b e ~ e e n p
by ~ ~ f e new~ nways
g for the c o ~ u n ~ c a t i o
ofninformat
Information Technology Application 399

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
e s ~ scene recons~ctions,solar systems, and so on. Of special jnteres~are the
s c u ~ p ~ rcrime
visual and sensual representation of abstract systems like magnetic fields, turbulent flow
s t r ~ ~ t ~molecular
es, 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
~nctiQnality.
"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 risky
cedures before these procedures are actually p e ~ o ~ on e d
il e ~ ~ i n e e ~architects
ng, 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
create h ~ r i ~ a mn e o ~ wh~ch
~ ~ can
s accu~atelyd where a storm will make 1
and when. In the world of higher education, s astronomy students tour
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 romising
de~~elopment 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, there
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
o~ for their specific tasks. Unless
their expertise includes ~ ~ o w l e of ~ gthee 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,
 n t a l remain about how people interact wi the SYs~ems,b v h e y may
~ u n d ~ ~ ~questions
ce and a u g ~ e n cognitive
t c esuch e n v ~ o
p ~ r f o ~ a n in
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,

QISS are o ~ f e r ~tod

402 Power System RestruchJring and Deregulation

DMK with pannin~tiltinghnctions can give the absolute c o o r d ~ ~ tof e seach grid point on
e n ~ the thermal system can give the rea~-times u ~ a c tee ~ p e r a ~ r e
the power e ~ u i p ~ while
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^
~ g on the thermal image.
point sensed by the DMK lo a c o ~ e s p o n d i point

2 6 Laser-based ~ s t a n c e - m e a kit
s~~~

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.
ic Let
in the ~ n ~ v e r 3-D
s a ~world coordin
coord~~ates of the image point on the thermal i
to I(Xp 5)is modelled a standard approach i
prQ~ecti~e 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 .
 (11.28)

with known, (xwj9ywi,

n = 6 are e ~ o u ~
toh 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

where

( 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 ~ ~ ~
 i ~ calibration
From ~ ~ ~ e reight n ~ ~ , points are

( I 1.24)
Y w j

Xwj
Information T ~ c h ~ o A
~ ~ g~ y~ ~ c a t i ~ n

xwj
Ywj
z wj
1
4 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 s
8, ~ i ~ h another
in 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

L
I

(11.28)

~ rany
The ~ e ~ p e r a of e point on the three sides of the tri
~ n t e ~ ~ of~ the
~ t two~ overtices,
n i.e. the two end points
a ~ ~ ~ t i omatrix
n a l ~~nsist~ ofnnine
g r must be s
o ~1.29).
the e q ~ a t i (1 ~

(1 1.29)
~ f o r m a ~ i oTechnology
n Application 7

11-7.4 I ~ p ~ e ~ e~ ~ ~~ ~
a t ~i op ~ ~ e
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 n hot ots, i.e. potential faults, could provide benefits inclu
~ oany
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 e r shown in Figure 1 1 2 8 , housing three 1500
s , t r ~ s f o ~room,
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
~n
There is not enough. inates and surface t e m p ~ r a ~of r e each
of points belonging to a con
91. 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
the a b s o ~ u ~ a ~image
es 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, ~ 3 surface of the ~ a n s f o i ~s as
~ ~ athe 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

m e3~under i ~ a g i ~ g
9 T r a ~ ~ ~ o rNo.
The c a ~ i ecover has a ower t e m p e r a ~ e , All these fe

rdinates versus surface temperature

4m) Y m z(m) TC)

2.5 1.7 0.1 43.8
2.5 1.8 0.1 37.0
2.5 1.9 0.1 31.4
2.5 2.0 0.1 41.2
2.8 2.3 0.1 27.2
2.8 2.4 0.1 2-72
2.8 2.5 0.1 27.2
2.8 2.6 0.1 27.5

0
c_

E -0.2
cc
N
-0.4

3.5

surface ~~~~e~ a ~ ~in the

f geometrical
~ ~ e rmode
410 ower System Restructuring and ~ ~ ~ e ~ l a t i o n

e ~ user can h e l y adjwt the viewing angle to concentrate on m y

~ u ~ h e r m o rthe
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 suppli
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~~igentagents, evo~ution ~ r o g r a ~ m i n gvi,
n ~ n e ~ ~ r rk s , ~ ~
se of ~ e r i v a t ~financial
v~ instrum
I: and useful tool for manag~ngrisk in
~~ e
l ~ c a btoi ~valuing
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,
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
that the newly de d ‘complex’ ANN is superior to the col~ventiona~ ‘real’
simple app~ication novel t ~ c ~ ~isqcarried
u e out for load flow
power network consisting of six buses. It conc~udedthat the ‘complex
the conventional ‘real in two aspects. Firstly, the ‘complex’ will not
~~

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
.
?%“hevalue 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
~ t case are K , = ~ 0 0 0K, q = 10,000 where QS,&is in
r ~ ~ e vtoa the
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
ngs of 30 and 10 ~esp~ctively. For case (d) 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
~ ; case (d) the step sizes are 0.00~
0.001 for v o ~ t a gfor for active po
er tap and 0.001 for voltage. Q-limit treatment for all nodes other
the slack node is ~ ~ d l by e switching
d within the load Row routine.

[I] ~ i a and
M.P. Wong, ‘ ~ ~ ~int~lligence l neural network applications in power system^', Invited
Paper, Proceedings of the International Conference on Advances in Power system Control,
e n 1943,
Operation & ~ ~ n a g e ~IEE, ~ , pp.37-46.
41 Power System Restructiiriiig and Deregulation

[2] S.B. Lau and K.P. Wong, ‘An artificial neural network approach to transient stability
assessment’, Australian Jourrral o f Intelligent Information Processing Systems, Vo1.3, No. 1,
1996, pp.75-85.
[3] R.P. Wong and S.U. Lau, ‘An artilicial neural network approach to modelling generator fuel
cost characteristics’, Journal of Institution of engineer^, Singaporc, Vo1.36, No.6, November
1996, pp 7 1-77.
141 W.L. Chan, A.T.P. So and L.L. Lai, ‘Initial applications of complex artificial neural networks
to load-flow analysis’, IEE Proceedings - Chzerufron, Transmission arid Distribution,
Vol.147, No.6, November 2000, pp.361-366.
[S] K.P. Wong arid E. Tsoi, ‘Genetic algorithms approach for the evaluation of trade-off between
economic and environmental costs in power dispatch with multiple fuels and pollt~hnt~’,
Proceeditzgs ofthe International (hference on Advances in Power System Control, Opemtron
& Mmagement, IEE, 1995, pp.553-558.
[6] K.P. Wong and S Y .W Wong, ‘Combined genetic algoritl~mls~niulatedannealing/fUzLy set
approach to short-term generation scheduling with take-or-pay fuel contract’, IEEE
Transactions on Power Sys%ms,Vol.1 I, No.1, 1996, pp.112-118.
[71 K.P. Wong and S.Y.W. Wong, ‘Hybrid genetic/simulatetl annealing approach to short-tcrm
multiple-fuel-consta~ed gencration scheduling’, iEEE Trmsacfiom on Power Systems,
Vo1.12, No.2, 1997, pp.776- 784.
181 L.L. Lai and J.T. Ma, ‘Genetic algorithms and UPFC for power flow control’, Interntrtional
Journal on Engineering intelligent Syrlenw, vo1.4, No.4, CRL Publlshing Ltd, UK, December
1996, pp.239-242.
[9] J. Yuiyevich and K.P. Wong, ‘Evolutionary programming based optimal power flow algonthni
dispatch’, IEEE Transacfion,son Power system.^, Vo1.14, No.4, 1999, pp.1245-1250.
[IO] K.P. Wong. A. Li and T.M.Y. Law, ‘Advanced constrained genetic algorithm load flow
method’, IEE Proceedings - Generafron, Transmission and Distribution, Vol. 146, No.6,
November 1999, pp.609-616
[I 11 Derek W. Lane, Charles W. Richter, Jr. and Gerald B. Sheble, ‘Modcling and evaluating
electncity options markets with intelligent agents’, Proceedings of the International
Conference on Power Utiiity Deregulation, Restructuring and Power Techriologiec 2000, City
University, London, IEEE, Apiil2000, pp.203-208.
[I21 L.L. La], H. Subasinghe, N. Rajkurnar, b. Vaseekar, B.J. Gwyn and V.K. Sood, ‘Object-
oriented genetic algorithm based artificial neural network for load forecasting’, Lecture Notes
in Computer Sciencc, LNCS, Springer-Verlag, Xin Yao et al. (Editors), May 1999.
1131 K.P. Wong and C.C. Fung, ‘Development of a fuzzy-logic-based control algoi-ithm for the
commitment o€ energy sources in an integratcd energy system’, IEEE Conference Prvce~dings
First Australian and New Zedand Crinference on Intelligent Information Sj)stetris (ANZIIS-
93), Decembcr 1993. pp.432-436.
1141 P.C.K. Luk, L.L. Lai, T.L. Tong, ‘GA optimisation of rule base in a fuz7,y logic conirol of a
solar power plant’, Proceedings of the internufional Covference on Power Utility
Deregzilatzun, Restructuring mid Power Technologies 2000, City University, London, E E E ,
April 2000,221-225.
[lSl L.L. Lm, ‘An expert sysrem used in power system protection’, IFAC Symposici Ser~es,1990,
Mo.8, Pergamon Press, Oxford, pp.489-494.
[16] J Bradshaw, eci., Sojware agents, MIT Press, Cambndge, Mass., 1997.
61
Information Techiiology Application I3

J,S. Rosenschein and C. Zlotkin, Rules of Encounter: Designing Conventions for Au~omated
Negotiation among Computers, bridge: MIT Press, 1994.
Barbara ~aye§-Roth,Robert van Cent, Rembert Reynold, M. V a u ~ a n
Wescourt, ‘Agents application’, IEEE Intelligent Systems & their Applical
99, pp.23-27.
A. Brooks, ‘A Robust Layered Control System for a Mobile Robot’, ~ E E EJ a ~ r n ~of l
Robotics and Automa~ion,V01.2, 1986, pp.14-23.
J. Ferber, ‘Simulating with Reactive Agents’, in E. Nillebrand and J. §tender (Eds.), Many
Agent ~ ~ ~ u ~ aand
t i Artificial
on Lqe, ~ s t e r d a m10s
: Press, 1994, pp.8-28.
R,A. Brooks, ‘Intelligence without representation’, Artscial Intelligence, Vo1.47, 1991,
pp.139-159.
M. Wooldridge and N.Jennings, ‘Intelligent agents: Theory and practice’, The ~ n o w ~ ~ d g e
eering Review, Vol.10, 1995, pp.i 15-152.
Nwana and M. Wool~idge,‘Sohare agent technologies’, British Teleco~m~n~cations
ology Journal, Vol.14, October 1996.
J. Bates, ‘The Role of Emotion in Believable Characters’, Com~i~njcations of the A
V01.37, 1994, pp.122-125,
A. Newell, A. (1982), T h e Knowledge Level’, A r t ~ c ~ Intelligence,
al Vol.18, 1982, pp.87-
127.
P. Maes, (ed), Designing A ~ ~ o n ~Agents: m o ~ Theory and Practice from
~ngineeringand Back, MIT press, 1991 I

A. Chavez and P. Maes, ‘Kasbah: An agent marketplace for buying and selling goods’,
~roceedingsof the First ~nternationalConference on the Practical A p p l i ~ a t ~of~tn~ ~ ~ i ~ i g e
Agents and ~ u l t i ~ A g eTechnology
nt ~~~ 1996), London, April 1996, pp.75-90.
P. Waynes, ‘Free Agents’, Byte, March 199.5, pp.105-114.
M.R. Genesereth aid S.P. ~etchpel,’ S o ~ w aagents’,r~ Communications of the ACM, Vo1.37,
1994, pp.48-53.
G. Wiederhold, ‘Mediators in the architecture of future information systems’, IEEE Computer,
V01.25, 1992, pp.38-49.
C. ShebIC, energy in a fully evolved marketplace’, ~ o r t hAmerican Power
S)imyosium, te University, KS, 1994.
C. SheblC, ‘ d operation in an auction market structure’, Paper p~es~nted at the 1996
I E E E ~ E SWinter Meeting. Baltimore, ND, 1996.
J. Marshall, Futures and Option Contracting: Themy and Practice, South Western P u b l ~ ~ ~ n ~
USA, 1989,
lives, Prentice Hall, USA, 1997.
Genetic Algorithms in Search, ~ p ~ i m i z a t & i o ~Machine Learning, A

ccessive linear p r o g r a ~ i n gbased OFF solution’, O ~ t ~ m a ~

~ e q u i r e ~ and
~ n ~Challenges,
s IEEE Power Engineering

nlinear p r o ~ a m m i nal~ rithtns and d~coinposit~on

strategies for OPF’, Optimal Power Flow: Solution Techniques, Requirements and C h ~ ~ l e n ~ e s ,
IEEE Power ~ n g Society,
~ 1996,
~ ~pp. 10-24.
g
 Power System R e s ~ c ~ r i and
n g Deregulation

[38] J.A. Momoh, S.X. GMO,E.C. Ogbuobiri and R. Adapa, ‘The quadratic interior point method
solving power system optimisation problems’, IEEE Transact~onson Power Systems, Vo1.9,
AUSS~ 1994, pp.1327-1336.
.P. Wong, and Y.W. Wong, ‘Genetic and genetic/simulated-~ealingapproaches to
economic dispatch’, IEE Proceedings - Generation, Transmission and Djstribution, Vol. 14I ,
No.5, 1994, pp.507-513.
E401 IEEE Committee Report: ‘Present practices in the economic operation of power systems’,
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, ce
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 salgorithmed for
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
nt genetic algorithm load flow
method’, IEE Proceedings - Generation, Transmission and Distribution, Vol. 144, No.2, 1997,
pp.91-99.
[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 c~~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~
Conjerence on Advances in Power System Control, Operation cft ~anagement~ IEE, Pub No
450,November, 1997, pp.266-271.
[5 I] T.T. Nguyen, ‘Neural network load-flow’, IEE Proceedings - Generation, Transm~ssionand
~ i s ~ r i b u ~ jVo1.142,
on, No.12, January 1995, pp.51-58.
[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,
~cs 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
n g Control of Non-linear Systems, Kluwer Academic Publishers, Boston, 1996.
~ o d e l l ~ and
[54] Virtual reality: personal, mobile and practical applications, IEE Cfflloquju~, Digest No.

in the design of an immersive system’, IEEE ~ o ~ p u Graphics

~er
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,
pp.27-35.
[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.
[60] Niancang Wou, ‘The infrared t h e ~ o g ~ p hdiagnostic
y technique of high-voltage electrical
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. , No.6,
o n147,
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.
[63] D.B. Gennery, ‘Stereo-camera calibration’, Proceedings of Image Und~rs~and~ng ~ o r ~ h o ~ ,
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,
P R
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 ~Mellin~
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
i~~
UK UK

Utility c o ~ p ~ n i~e~s e s e n t te hd e ~ ~ e l on ~ I ~ t e ~be t

v ethe
~us i ~c s s es~ ~ w the a ~ n~ ~ se as ~ e~ ut i c k ~as
y possible.
~ e c ~ available ~ l ~ for ~ Intenlet
y 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

12.2.1 at Is fheI ~ t @ ~ n e ~ ?
A p ~ ~ ~ofthe ~ n to Power ~ y s t e onitoring
c a ~Internet ~ and Tradi~g 7

catego~cs:c o n ~ e r c ~and a l n o n - c o ~ e r c ~ a~xamples

l. of commercial use are p u b ~ ~ c
, financial data, roduct a d v e ~ i s e ~ e n tand
s information.
s are publication of papers, references, on-line ~ t o ~ a and ls
.The ~ ~ ~ risnnote only b u ~in
t able to d ~ s ~ i static
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.
t
gages are pages in which changing data is constantly received. Such pages can contain on-
line 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,
ion 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 accessibl
vided in a f o ~ a that t can be displayed success~llyan
veloped to allow data to be received in a
presen~bIelayout [2,3]. d o c ~ e n t are
s plain text d o c u ~ e n t sCO
allow software to display the text in a ~ o r m a ~ elayout. d For active pages,
languages such as J cript or Java allow software to be included in a
added interactivi~. s o ~ a r products
e 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.

12.2.3 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 ~ efromd 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
r
ional costs when compared providing i n f o ~ a ~ and on s
over the Internet.
The I n t ~ ~pro~ides
et ~ 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
ava~lablc.
 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 ~ arec ~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
n market
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
ised supply chain by cing supply chain costs
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
e) ~nowle~~ 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
~pp~ication i ~ Trading
g 19

w Can I in^ the I n f o r ~ ~ t I~Need?

on
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
ds
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 t
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 .

12.3.I ~ ~ 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
y
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
e d an countable number of c Q n ~ i b u tand
system, It has been ~ e v e ~ o p by 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 ~ .
4120 Power System Restrur;turing and

The ~nternetis the ideal medium for publish~ngi n f o ~ a ~ i owithout

n h a ~ n to
g pay high
rates to commercial publishers. Everybody with I n t e ~ eaccess
t 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.
nt 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
n available on remote machines across the I n t e ~ e t .
i n f o ~ ~ a t i omade

12.3.2 ~ ~ u c u t ~Use
~nal
The Internet can be used to access information on schools, universities, scho~ars~ip9
fellows~ips9 and others. It is able to improve inte~ctionsb e ~ e insti~tions
~ n by sharin
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 e,
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
~e 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.

12.3.3 Inte~net
Prior to ~ ~ i a ndecision
g 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
sp~cialise~ 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
pot~n~iali n v ~ s ~ and
o r ~shareholders, ~usines€escan 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
Ap~li~ation

~ u l t i m ~ dmeans
ia the simui~neoususe of more than one medium. A single medium can
be text, image, video and sound. ~ ~ i ~ t i m edevices
dia 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 nvideot , 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

Category Extension (MIME type)
Audio, Sound, Music AIF AV1 M3U MID MP3 SND WAV
Movie, Video AV1 DV DVD MIV MOV MP2 WE MPEG MPG
Images, Photos BMP GIF P E G JPG TIF PGX WMF

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.
 2 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
n
business without verbal c o ~ u n i c a t i o nor travelling.

12.3.7 for Professionals

S~pport
~ 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
ly
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 ~t a
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 twithouti 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.
~nternet~based 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.
Internet forums have been successfully used as an ~ n f o ~ t i osource n for the power
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 et
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
research.
~ 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.

12.3.8 The Power Industry and the Infernet

Can the Internet really stand up to its promise to increase productivity and p r o ~ ~ ~ i and
lity
ost for the power industry?
is not much evidence to support this s ~ ~ m e nbutt 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
~pp~ieation nitoring and Trading 23

n t page desi should start from the need of the clients (the c o r n
~ f ~ c i eWeb
find the ~ f o ~ a t i or
o nproducts they require ( i n ~ e ~ e d i acontent)
te 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
professiona~~ to satisfy a need, or to solve a problem. For example, low
optimis~ngthe c o ~ b u s t ~ oprocess n 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 pagesb will increase its p o ~ u and ~ at h ~ e ~f o r eits value. To
increase the rate of rec t visitors, the Web page should contain added conte
erspec~ive.~ o w e rin Web sites should provide easy access to e ~ e c ~ i cia l
r e s ~ ~ c for
e s mmu ~ i s ~ b u t Qcon~ac~ors,
rs~ engineers~purcha$~n
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
orga~~~sations and use these biddoffers to sched
resources locally, A d ~ i t i o ~~anl c t i o n provided
§ to the ark et inch
data, s e ~ l e ~ e nbilling
t, 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
wiring.
ing l n t e ~ etechno~ogy
t adv
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 cane s be lea
I" of people a ~ e n ~ This ~ g is. one
12.3.9 Recent ~ ~ p r o v e m eon
n t the
~ Internet
Since the computer ~ a n u f a c ~ r i nindustry
g 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 n§ometimes. i n f o ~ a ~ i oisn
duplica~e~ 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
i~
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 . the latest 128 bit en
~ n f o ~ a t i oWith
rotocol, hackers will have at least
ion, ifit is within their ab~~ity.
the Int~rnetwhile on the move is one o f th
e~ ~~ o ~ra bhand-~eld
l~
e ~ ~ as
. d e v ~ such s
w r i s ~ ~ ~are c ~c ue ~s e n t ~available
y 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
t at any location.
~ b l e ~ are cu ntly being pushed as a
WAP or ~ ~ ~ e r r i e t - e n~elephone$
far, there is still a lot of convincing and iiii~roveme~~ts to be done until WAP phones will
~ p ~ l i c ~ toE n Internet to Power System
i othe onitoring and Trading

take a s e ~ om~asr ~ eshare.

t They suffer from b ~ d w i d t hres~ictionsand small dis
Pal~topsin c o n ~ a slook
t quite promis~n~, since thek display is reasonabIy
idth restrictions. C ~ ~ e n t l~y , A phones
P and palmto
Ie to mobile phone text ~ e s s a g i n ~ ~
omising technologies for accessing the ~ n t e ~ine thet ~~e are
as Internet display units, if connected to the ~ n t e ~viae 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
. some
et connection from game consoles for
offer full Internet browsing.
already have a display, ted to a ~ e l e ~ line ~ o and
~ e
ady. They also have keyboards and the abWy to
~pm
far the costs of o ~ e r s h arid l o ~ a t of
~~n
lds (e.g. in fridge doors) have se to some
respect.

12.4.I 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
~ e d

Pi -8. The Internet as a three-tier connection

426 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 client’s

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 client’s 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 ~l 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 icrosoft’s Windows, Linux
and Apple ~ a c ~ n t o s hMacOs.
’s 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 se~
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
g
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
er
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.
issue for Web servers is s e c u ~ i ~ , ile ~ e servers
b allow access
ody, access res~ctionsapply to all other areas on the serv~r’shard
disk.

12.4.3 Web Clients

o ndis
client is a piece of software that is able to receive ~ f o ~ a t i for
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
i o ~ They are part of the clie~t-serverMO 1, ~ h i c is
server for i ~ f o ~ a tretrieval. hs h in ~
12.2. The Internet utilised the clien~-servermodel because of
nature.

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 oWebr , cl~entsfor
Application ofthe Internet to Power System Monitoring and Trading 427

info~a~~ o n can be found in Internet search engines. A Web client must be able to
storage
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 ly.
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
e order to access new Internet tecIino~ogies.
always try to update client s o f ~ a r in

12.4.4 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.

12.4.5 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
m of 199.171.201.14. 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.

12.4.6 E-~~il
The Internet owes parts of its pop~~arityto 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
s, ~ 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, L ¶
) the ~ n ~ o ~ isa so~ that ~ othen browser can play it correctly. Free ~ I i t e ~ e ~ - b ae-
sed
mail sewices are available, e. g. from HotMail o

62.4.7 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
¶ se~isitive
rese~ch ation. Tilerefore, security issues were not part of the i n i t ~ a~~ ~design.t e
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
us

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
commun~catio~ 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 ~ ~ ~
systems.
ng
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
43 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
1 across the
I Internet

Data ~ nusing a private

~ key ~ t ~ ~ ~
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 t e This allows
~ d the ~ ~ i v a key.
~ public key to many people, who are able to send ~ e s s a g e sback to the
p u ~ l i s h i nthe
e the publisher of the public key is the
hing the public key, the ~ e s s a g can
~sb
blic key, only the p ~ v a t ekey can dec
lic key generators always pro public and private key
where A i s used for encryption and B for

I Secret readable data

I
I ~rans~ission
I across the
f Internet

I ~ 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 33

Server 1 Server 2 Server 3

Network load balancing with three servers

ua
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.

12.5.3 at Is ~ a v a S c r ~ ~ ?
a p r o ~ ~ i n i ~n ga n ~ a which
g e is exe in the Web ~rowser.It is one of
ages that provide a means of adding
As shown in Figure 12.9, JavaScrip

age from a Web server, the browser inte~retsthe

JavaSc~~ptcode for page i n t e r a c t ~ v If,
~ ~for
.
$elect~b~e
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
i~ 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

Computer
1

nment for JavaScript applications

~ tvery similar to writ in^ code for a Java
de in J a v a S c ~ is
is how events for executing code sections are trigg
objects, e.g. a button, to trigger code, which might ~ ~ l ~ u laasubtot
te
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~~ preventing
access to system reso~rces,e.g. the hard disk. ~ h e o r e ~ ~ cita lshould
~ y be just as safe to
 i o 1n ; i t ~ ~toe Power
~ p ~ ~ i c aof~ the t System 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
JavaScript or an a ~ p ~ within
et the Internet browser can be turned off when brows in^
u n ~ s t e Web
d sites.

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.

Execution of byte-
ptain text Java instructions code in Java Virtual
Machine (JVM)
“Prograrn,class”

2.10 Java code com~iiat~oii

and execution
Java c Q ~ p i lcane ~ ~ o ~ l o a d frome 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 i a l Since Java
n g n o n - c ~ ~ ~ e r cones.
in~oducedby 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
g ~ c. o ~ p u t e rwhich has a Java
ing ~ a n ~ a Any
le to execute java byte-code. This means that softwar
~ s i ~ n ewritten
d, and compil~donce. This is a real advantage
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 .

~ n ~ ~for ar Java
~ applet
~ ~ n t

shows the e n v i r o ~ n
 n Internet to Power System Monitoring and Trading
A p ~ l i c a ~ ~ofo the 7

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.
438 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 o n The dynamic part can be a table where data is q u e ~ e
~ i logos.
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
the data is stored and ~ e r e ~ othis
r e e f f ~ ~how
t s the
~ 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 ~~ ~ ~ , in a tr
a ~is stored
data
data can be found near the root

~ b j ~ c t - o ~ i e n(00)
t e d ~ ~ t a b a scombine
es t
e ~the table. For ex
of i n f o ~ a t i o ns ~ o r in
ction could be the calculation of moving averages.

‘g l ~ n g u a gGalled
~ ~ ~ c ~ r e d
‘seque~’~. SQL is imple~ented
s t a n ~ ~saidd 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
ion
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 JDBC’s pred~ce§§or,
ODBC, and are available for almost every database. JDBC comes in different levels of
se For examp~e,Level 1 JDBC drivers a
d a t ~ b ~ ac~essibili~. 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).
~erver-s~de 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 ............................ ...............................
~ f

SQL queries sent to

servlet driver via WAN
.....
/

Figure $2.16 Threetier JDBG driver connection

12.6.4 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
~nc~ionality of a scripting language with Web page interactivity.
 n Internet to Power System ~ o ~ ~ i t o rmd
i othe
~ p p l i ~ ~ tof i n gTrading 1

12.6.5 Web Pages with Integrated A ~ ~ ~ i ~ a ~ i ~ ~ ~

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

.7
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
wit 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
d 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,

12.7.1

The s h o ~ c o m in i ~H~ ~ haw accelerated the introduction of X L. One ofthe major

if~erencesb e ~ e e nTITML and X is that XML does not contain tags which relate to
the f o r r n a ~ i ~ofg the data. The forrnatt OCUmentS is assign
data elements, represent~gspecific e a constant format
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
in~o~at~ will
o nbe given later. Stylesheets can change the way X
browser, If the ~ o ~ a t tneeds i n ~ to be changed, only the stylesheet requires ~odificat~on,
separat~ngthe maintenance between data and f o ~ a t t i n gor content and layout.

12.7.2 Reasons for

document i s accessed, a plain text editor can be used to access the data,
a d v a n ~ gis~that in years to come e v e ~ b ~ will
d y be able to readlwrite the files. Plain
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 is
document file created in the 2980s word^^ or rd
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 problems,
42 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.
r ~ ~ ~f~ Q t~ ~a~a g : ~ ~ a ~
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.
~ ~ r i ~ i ~ ~ ~ ~ ~ ~ ~ ~
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.
s~i}~pi~~
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
XML, it can be
represen~ingelements. Once the data has been generated in we~i-forma~ed
reused by different industries.

12.7.3 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 3

Classic HTML pages contain both content and layout in the same file, causing
dif~cu~tiessince 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 e*
o ~ for the
problem can be avoided if content and layout are separated. The t e c ~ o l used
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
3
SQL query objects SQL query objects

.I7 Rendering of XML data with an XSL stylesheet for NTML display
~ gthe XSL stylesheet ou ut formats such as WebTV, WAP, PDF or others
~ e p e n d on
d . XSL stylesheets are in principle XML documents, they can be
could be c o n § ~ c t ~Since
converted by another XSL stylesheet into a new XSL stylesheet as shown in Figwe 12.18.

Change management system based on XSL stylesheets

44 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
data
structure.

~ a y Voa l~i ~ ~ ~ DTD

a t i owith
e definition (DTD) file c o n t a ~ ~layout
s ru
validate XML to avoid invalid or inc
XML files require to be well formed so
d o c ~ e n contains
t rules, with w ~ c anh
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.

12.7.5 ~~lesheet~
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 di€ferentways. Since a data view
is d ~ p e n d e ~ont which information about the data is requ~ed,s t y l ~ s h e eoffer ~ an
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,
ph and many more. CSS stylesheets were introduc
means o f extending the style properties of
L has a set of pre-defined eleme headings. If a CS§
t contains the same element n
will result which might not result in the
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
n~
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~ document for publi~hing
on the Inkernet.

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~ 1
the links allow running in more than one direction. They allow every element to become a
link not just pre-defined elements.
r s links to arbitrary positions in an XML document, a
~ P o ~ t e allow
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 c e a reliable supply of power. ~ o n d i t ~ o ~ - b a smain
n ~ensure e d ten^
d ~ § ~ b u t on-line
ed 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 system,
which is based on one-to-one ~ o ~ u n i c a ~wasi 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.
446 Power System Restructuring and Deregulation

12.8.I 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 client-server
concept.

MC - Micro Controller
PC - Personal Computer
Cap. - Capacitor

I
I

FigMr@12.19 The whole Internet-based monitoring system

Application of the Internet to Power System ~ o n i ~ o and
~ nTrading
g

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
off-the-sh 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 r
on a time-~ultiplex~ng e , PC is c a ~ u n i c a t i ~with
basis. F u ~ e ~ o r the 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
n
the PC and the CLP m a i ~ t e ~ centre
~ c e is accomplished by a modem.
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 on-
site PG s e q ~ ~ e n ~grabs
i a ~ ~images
y from the eight cameras at a ~ ~ e ~ u e o€ n c5yseconds per
frame.
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. The
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 om
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
su~$~ation, the ~ansrnissionrate wilf be su~stan~ia~ly improved.
This remote vision system requires neither spare contacts nor a d d ~ t ~ o n~ as~d u c e r sIt.
can be used to prevent theft as well, General ins~ectionof the s
such as c ~ e c k i ncleanliness
~ and quality of ~aintenancework.
Is can be grabbed as images so that the user at
ce centre can confirm. whether the are false or genuin~
re~evan~ camera to see the existence of smoke in the aetivat~$zone.
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
s 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 isr able to visualise the equipment status through the ~ i s ~ mon ~ay
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

 i o n lnternet to Power System ~ o ~ i t o and
A p p ~ i ~ a ~ ofthe ~ nTrading
g

smission of energy requires constant monitor

n t supply. ~ o n i t o r ~ nofg such
~ e ~ a n epower
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
damage.
tice, it is imposs~b~e to monitor every unit since they are geograph~cal~~
$is ~ u r t h e ~ o rite would
, be too expensive to keep qualified personnel in remote
locations for 24 hours a day, 7 days a week. Therefore, remote monitoring of
e q u ~ ~ ~with e n the
t help of c o ~ ~ u t ehas r s been practised for some time. Com~uter$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~ device 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.
g
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 t
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
connection.
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 n 640
conve~ers.Such AIL) converters can be found on standard PC I/ s. The
50 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 converter’s 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.
ns
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.
ce 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 :

<TRFWSFORMER>
<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

$a
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 thel 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 oni 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
c 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
t to be changed r n ~ u a ~ erefo
~ y . fore, fast data
ented by static Web documents.
D ~ a ~Webi c pages we one way of publishing changing data over the
a new static Web page is generated and ~ran§mi~ed to
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~~ed
request by the
CGI clfthe
server.

~ ~ 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
way to ~ ~ I ~ pro ~ aams~ but d e ore flexible and re~iab~e
e are in terms of r o b u s ~ e s
security.
If a Web page is generated d y n ~ i c a l l yon a server with ~ e q u e n data
t chan
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~~ableon the server. ~rowsershave no
452 Powcr System Restructuring and Deregulation

if new data has become available on the server. ~ h e r e ~ ~the , is r e ~ u i ~ etod~ ~ l the
r euser o a ~
con~inuouslyby selecting the refresh or reload option in the rowser.
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 ~ J) a v a ~ c ~ and
e ~ i n c ~ ~ (d e~ S or pt

tic Web pages can contain a

e a ~ " data ~ e request via repea~~d

~ ~update r e ~ u e to ~ server ~
s ~the d d ~
Application of the Intemet to Power System Monitoring and Trading §3

~ ~ 12.24
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
t~~~communication 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
its
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 transmis§ions 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
454 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,

12.8.3 ~ 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
J a n 1996, d a circuit breaker (C
~ ~ 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

c4”
U, 3.7.

3.6.

3.5

3.4
IS

Time Is

re 12.29 Current waveform for closing of reactor CB

 Power ~ystem~ e s ~ andc ~ e~r ~n~ ~~a t i o n

Time is

C u ~ e nwaveform
t 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 ~ very quickly
e limit

storage tank. As a result, prec

Air compressor odoff timing

Application of the Internet to Power System ~onitoringand Trading ~
57

St er
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
~o~, and easily accessible for each compet~tor.
ng is not confined within a country’s 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. Tl-tesefore
the Internet, with its ~ l a t and ~ olanguage
~ independence, is the choice for h o s ~ on-line
~g

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 ireal-
re
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,
on. anonymity during negotiations and tools for t
analysis of marke~~ o n d i t i ~re the relevant ~e~uircments.
The complexity of the er exchange with its large nuinbers of v ~ ~ a b l rn es
predi~~ion 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 ~ ~ enough
e 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 l e ~ on auctions. The dispa~ched
o n reserve in ~ a ~ a lbased
regula~i~n is the capacity to maintain real-time
g r e s e ~ ei s the prov~sionthat can res

the market situation and follows

have to ensure high p r o ~ t a b i l i ~
t pa~~cipants
between the value of a
nd a clear re~at~onship
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
~ o n intelligent s
enefit the ~ ~ i t e r a c ~between
ng of electricity. ln~eiligent agents per
s in an on-line auction [ 131.
As mentioned previously, agents for buying or selling electric^^
~ g generators or consumers. In order to use agents to
r e ~ r e 5 e n t ~either
458 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,
t i ~ s o ~ a r must
oserver e be pure
ing Web services, Currently, the most common Web servers are IIS
~ i ~ r o s o fApache
t, 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 e-
commerce 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).
rela~ive~y 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
e d format if possible [ 151.
should match the d i s ~ b u ~ data
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
ed
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
~ of great i r n ~ o ~ for
c o n t i n u ~are ~ c~ e e applica~ions.
b ~ 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
aded and
parallel process~ngarchitec~res.

Client Computer
I

time data via an

~ommunicationsaechitectuee

application of ~ ~ t e ~ e t ysaem ~onitoringand is a very e area,

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 open-
access 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~,
1998.
Dynamics ~ T O’Reilly
~ L ~
s Teach Y o u ~ s e ~ 4~inT ~ L

1899, ~ e a c ~Press.
pi~

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
r 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 ~andr iEconomics
ng
fl2] ~ ~ Song, nSacques Law
~ Liu, Naili ~ C ~ n,~ ‘New ~ e t h for
o ~ ~

access fees, 162, 165, 167
active reserves, 25
198,199,218
autononiy, 355,356,359
a u ~ ~ " r ~ ~ l127,
o s 128
~~s,
back-to-back thyristors, 269,273
ba~ancin~~ ~ k eG8,78,85,
t ,
battery charging, 28
bench~ark,116,125,128,X57,163
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
s,
central utility model 52
148,259
o n ,1,2,4,5,8,9, 11, 15,
c o ~ p ~ ~ i t ixii,
113
62 Index

304,329,330,332,334,347,356, dissolved gas analysis, 296,323,329

360,373,377,420,457 distrib~tedgen~ration,13, 16, 17,20,21,
competitive ~idding,1,65 22,23,25,26,46,48,99, 108, 144,
competitive framework, xi, 110,353 I64
co~petitive~eneration,2,3,4, 107 d i s ~ b ~ t gene~ation
ed tec~ologies,13
competitive metering, 114 distribution auto~atiQn,127, 128, 147,
competitive trading, 24 148,151,418
compu~tionalintelli~ence,xxi, 353 distrib~tiQn co~panies,4,63,64, 110,
condition mQnitoring,129, 132,295, 111, 113, 115, 116, 117, 119, 154,
300,304,312,313,320,322,328, 175,302,316,318,353,361
445 distribution loss, 63
congestion manage men^, xiii, xxi, 58, district heating, 21
69,70,71,75,78,79,86,88,89,90, d i s ~ r b ~reco~nition,
ce 341,350
94,95,97,99, 104, 178, 180,
5, 198,200,209,215,216, economic dispatch, 53,77,78,82, 109,
121,133,374,414
c o ~ ~ e s t i o~ n~ a n a g e ~markets,
e n t 93,94 eddy currents, 325,326
contract market, ]I0,6 I, 68, 179 elasticity, 59, 192, 195, 196,209, 215,
contract path allocation, 57 220
electrical d ~ s c h ~ g296,300
e,
electricity and gas networks, 1 1 1
electricity dis~jbutionindustry, 111
electronic auction ~ a r k ~ t10
s,
damper, 273,274 e-mail, 354,420,425,427,428,429
data pol~ing,45 1,452,454 embeddedcost, 57,58,186,187,189,
data security, 458 190,194
data s ~ e ~ i n451,452,453,454
g, embedded generators, 112
database, 136, 137,319,321,408,419, embedded systems, 128
420,437,438,439,440, 458 emissions-free e l e c ~ c i 19
~,
d a y - a ~ ~61,69,79,86
~d, energy function, 206,385
day-ahead market, 71,78,90, 176, 178, energy mix, 6
191 energy policy, 16,48
delivery time, 86,421,423 energy purchase cost, 113
demand energy storage, 5, 13,259,2
de~and ment, 1 IS 270,285
demand-side bidding, 68 nzglish auction, 55,56
deregulatiQn,xii, xi& xiv, xviii, xix, 1,2, equilibriu~point, 68,69,84,97,206,
5,6,7,9, 10, 15, 19,45,48,50,52, 207
52,55,57,58,64,70, 71,73, 108, ethernet, 348
111, 116, 119, 133, 140, 153, 161, e v o l u t ~ o n comp~tin
a~
167, 171, 173, 175,202,217,218,
~ ~ Q l u t ipro on~~
ex ante market, 61
dere~latiomof energy market, 4 18 ex post market, 6 1,73
desalination plant, 38,49 excitation capacitance, 27,223, 32, 35
discrete wavelet ~ a n s f Q338
~, expert s y s t e ~ s353,355
,
Index
faci~i~tors, 359
fiber optic communication, 147
fiber-based ~ansmission,142
file types, 42 1
financial markets, 78,88,94,97, 171
o n 95
financial ~ ~ s m i s s i rights,
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,
ed 278
forward markets, 71,86,95, 106, 178,
361
fossil fuel, 3,4, 6,45,53
Fourier transform, 336,347
free space lasers, 141
~equencym~dulatio~, 144
fuel cells, 10, 12, 13,20,2li, 26,99,330
hll graphics in~er~ace, 134
~ ~ rmarket, e s 8,68,74, I0
362,364
fuzzy diagnosis, 323,325, 328
fuzzy logic, 38,49,341,412
g a ~ i n g50,78,
, 83,88,91,92,95,98,
99,107
gas industry, 165
gas turbine technolog~,173
generation companie§, 22,67,72,73,
175,361
eneration mix, 11
156,180,412
genetic algorithm, xix, 49, 360, 362,
364,365,367,370,410,412,414
GIF image, 421
g a v e ~ e n~nte~ention,
t 16,45
graph theory, 246,25 1
green c ~ ~ i ~ c a 17
tes,
green energy, 20
278,279,280,283
63
harmonic distortion, I3,26,331,346,
348
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,
274,277,278,279,280,281,286
hybrid agent, 355,358,359
hydro, 3,5,6, 12, 13,20,68,72,73,
105,174,229,259,280,330
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,
373
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
, xvii, xix, 1 14, 1 18, 140,
I n t e ~ e txiv,
141, 143, 144, 145,358,416,
458,459,460
auction, 55,56,60,61,65,67, 82,84,
90,91,95,96,98, 105, 108, 109,
46 Index

193,194, 195,362,413,457, ricing, 23, 57, 99, I

187
baiidwid~¶ 43 1 ~ ~clearing,
~ 65,71,85,
k ~ 87,t89,90,
~ d u ~ a ~143,354,399,420
~on, 91,96,177

219,231,234,236

~ a r k ~anspar~ncy,
e~

~ e g a w mile
a ~ al~ocation,57

in~er-zana~
~ o n g ~ s ~ i88
on,
inves 307
9

335

mother wavelet, 337,338,

mutation, 40,41,372, 373, 375, 3’76,

377,378

159, 160, 162 nodal p r i ~ i 59,73,88,

~~, 166, 167, 187,
~ a ~ g i costs,
n a ~ 3, 53, 58,210,240,242 188
 Index
-.-

~ ~ o ~ - d i s c r i m i nauction,
a t o ~ 55 power pool, 4,22,82,86,87,%3, 100,
n o n ~ ~ ~ ~s ye srt ~s ~~397 s ,~ e 109,159,176,179,182,183,18
185,292
power quality, xiv, 21,25, 21”79 127,

154,231

ly, 116,117, 119,1

150
(I Index

sation, 260,261,271,272,
275,276,282,285,28
real~t~me markets, 78, 86 service ~rovider,xiii, 111, 156, 162,
r e ~ e s s anafysis,
~ ~ n 116 163, 164,170,288,289
latory body, 110,33 se~ement,55,63,69,71,79, 177,
t o ~ 293
r ~ ~ l aincentives, 423
r e l i a b i ~benefit,
i~ 189, 190 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
g,
social welfare, 54,8

sment, xiii, 115, 117, 125,316

42,46,49,330,399,
solar collectors, 38

rew wall, 428,429

~ ~ s w o429 r ~ ,

c s 80,
§ y s t e ~ y n a ~ ~xxi, , 101
Index

system marginal price, 23, UHFradio, 144, 149, 150

system opera to^, xiv, 51,53,56,59,60, ~ b u n ~ ~ ixii,
n g50,
, 52,53,73, 1
61,65,69,73, 103, 115, 120, 121, uncons~inedschedule, 65
139, 154, 157, 158, 166, 168, 177, unified power flow controller, 275,33 1
I78,192,X93,194,195,210,331
system-wide blacko~ts,155

t~e-or-pay,412 103,104,108,109,1177,180
tap-chang~,261,277 UNIX, 136,426
telecommunicat~on~ n d u s153, ~ , 154 uplift charge, 55
telephone n e ~ o r k 1, 14 usage charges, 162,16
thermal heating t e c ~ o l o37 ~, use of system charges, 27, 72, f 11, li 15
thermal limit, 58,59,66,259, 283
~ h e ~ o g ~400,410,415ph~, valley load time, 241
therrnovision cameras, 297 vertically integrated, 8, 50,58,64,72,
thyristor cQn~olled reactors, 266 77,153,155,156,157,163,16
t h ~ scontrolled
~ r series capacitor, 271, 178,210,360
285 vertically integrated utilities, 77, 153
tier supplier, 1 12 virtual e n v i r o ~ e n395
~,
time of use, 135,190 visual display unit, 395
tournament scheme, 377 voice activated messages, 1I
t r ~ s i e nenergy
t margin, 206 voltage collapse, 140,260
t r ~ s i e nst t a b i ~ ixvii,
~ , xx, 139,206, voltage control, X4,26,80,93,1
219,285,412 194,284
~ ~ n s m i s s i oaccess,
n xvii, 5 1, 175, 184, voltage dip, 117,333,350
191, 197,200,216 voltage sags, 13,331, 332,334,335,
transmission channels, 1 348,349,350
~ ~ s ~ s scharge, i o n 58,90,95, 165, voltage source converter, 280
168,199,211 v o l u n t ~system operator model, 158,
transmission loss, xiii, 57,60,65,72, 160,161,162,163
105, 120, 165, 186, 191, 192, 196,
197, 198,204,214,247,257,373, WAN, 134,139,358,431,
374,376,458 wavelet transform, 336,337,339,350
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,
on 417,427
FTP 428 458

mission revenue, 162, 16

transmission system expansion, 162, static, 417,433,437,
163,170 Web server, 426,427,4
451,454,458
two-tier system, 120 web space, 420,437
website, 75, 114
8 Index

LPE ca~ies,3 13
ay, 59, 178, 198, 199,
zonal price, 71, 166, 167, i!
3, 14, 17,20,21,22,26, ricing, 90, 166, 167, 18
45,49,53, 147,259,280,330,349