Power System Restructuringand Deregulation

Power System Restructuring and Deregulation Edited by Loi Lei Lai

Copyright © 2001 John Wiley & Sons Ltd ISBNs: 0-471-49500-X (Hardback); 0-470-84611-9 (Electronic)

Power System Restructuringand Deregulation

Trading, Performance andInformation Technology

Edited byLoi Lei Lai

City University, London, UK

JOHN WILEY & SONS, LTDChichester . New York . Weinheirn . Brisbane . Singapore . Toronto

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Library of Congress Cataloging-in-Publication Data

Power system restructuring and deregulation : trading, performance, and informationtechnology/ edited by L.L. Lai .

p . cmincludes bibliographical references and index .ISBN 0 471 49500 X1 . Electrical power systems- Control . 2 . Electric utilities-Cost control . 3 . Electric

Utilities - Deregulation . 4 . Electric utilities-Technological innovations. 1 . Lai, Loi Lei

TK1007 . P68. 2001

.333 .793'2 - dc21

2001045404

British Library Cataloguing in Publication Data

A catalogue record for this book is available from the British Library

ISBN 0 47149500 X

Produced from Word files supplied by the EditorPrinted and bound in Great Britain by Antony Rowe Ltd ., Chippenham, WiltsThis book is printed on acid-free paper responsibly manufactured from sustainable forestry,in which at least two trees are planted for each one used for paper production .

Contents

Foreword . .. .. .. . . . . .. . . . . .. .. . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . .. .. . . .. �. . . . . . . . . . . . . . .. . . . . .. .. . . .. . . . . . . . . . . . . . . . .. . . .. . . . . . . .. . . . .. . . xv

Preface . . . .. .. .. .. . . . . . . . . . . .. .. .. . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . .. . . .. .. .. . . . . . . . . . . . .. . . . . .. . . . . .. .. . . . . . . . . . . . . . .. .. .. .. . . . . .. . . . .. xvii

Acknowledgements . .. .. .. . . . . . . .. .. . . . . . . . . . . . . . . . . . . . . . . . .. .. . . .. . . . . . . . . . . . . . . . . . . . .. . . .. .. .. . . . . . . . . . . . .. . . .. .. . . . . .. . . . . . . xxi

Contributors .. . . . . . . . . . . .. .. .. . . . . . . .. .. . . . . . . . . . . . . . . . . . . . . . .. .. .. . . .. . . . . . . . . . . . . . . . . . .. .. . . .. .. . . . . . . . . . . . . . .. . . .. .. . . . . .. . . . . xxiii

1 Energy Generation under the New Environment . . . . . . .. . . . . . . . . . . .. .. . . . . . . . . . . . .. .. . . . . . . . . . . . . . . . . . . . . . 11 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 .2

Competitive Market for Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 .3

The Advantages of Competitive Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31 .4

The Role of the Existing Power Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41 .4 .1

Reconfiguring the Electricity System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 .4 .2

Trends in Conventional Electricity Generation Technologies . . . . . . . . . . . . . . . . . . . . . . . 61 .5

Electricity Demand Operation and Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 .5 .1

Power Plant Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 .5 .2

Reliability Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71 .5 .3

Availability of Fuel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91 .6

Renewables Generation Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 .6 .1

Biomass . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121 .6 .2

Fuel Cell . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 131 .6 .3

Wind . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 .6 .4

Photovoltaics (PVs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 141 .6 .5

Solar . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .141 .7

Combined Heat and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151 .8

Energy Policy and Government Intervention . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 161 .9

Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 .9 .1

Capital Costs for New Plants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171 .9 .2

Technology Advances - Clean Coal Technologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 .9 .3

Environmental Considerations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 181 .10

Distributed Generation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 .10 .1

Market Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 .10.2

The Power Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 .10.3

Ancillary Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 .10.4

Technical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .251 .10.5

Implications and Opportunities for Network Operators and Generators . . . . . 261 .10.6

Connection and Use of System Charges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 261 .11

Case Study l : Phase Balancing for a Self-excited Induction Generator [50] . . . . . . . 271 .11 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27

v

vi

Contents

1 .11 .2

Circuit Connection and Principle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 281 .11 .3

Performance Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 301 .11 .4

Solution Technique . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 311 .11 .5

Results and Discussion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 321 .11 .6

Simplified Phase-balancing Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 351 .11 .7

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 .12

Case Study 2 : Controlling a Solar Power Plant [59] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 .12 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 371 .12.2

The Solar Power Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 381 .12.3

Control Structure of the Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 391 .12.4

GA Formulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 401 .12 .5

Experimental Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 421 .13

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 451 .14

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46

2 Deregulation of Electric Utilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. . . . . .. .. .. . . . . . . . . . . . .. . . . . .. . . . . . . 502 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 502 .2

Traditional Central Utility Model. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522 .3

Reform Motivations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 522 .4

Separation of Ownership and Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532 .4 .1

Central Dispatch Versus Market Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 532 .5

Competition and Direct Access in the Electricity Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542 .5 .1

Competition in the Energy Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 542 .5.2

Competition and Auction Mechanisms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 552 .5 .3

Direct Access/Wheeling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 572.6

Independent System Operator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 602 .6 .1

Pricing and Market Clearing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612 .6.2

Risk Taking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 612.7

Retail Electric Providers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 632.8

Different Experiences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642.8 .1

England and Wales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 642.8 .2

Norway . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 682.8 .3

California . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .712.8 .4

Scotland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 722.8 .5

New Zealand . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 722.8.6

The European Union and Germany . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 732.9

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

3 Competitive Wholesale Electricity Markets . . . . . . . . . . .. . . . . .. . . . . .. .. .. . . . . . . . . . . . . . . . . . . . .. . . .. .. . . . . . . . . . . 763 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

763 .2

The Independent System Operator . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 793 .3

Wholesale Electricity Market Characteristics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 803 .3 .1

Small Test System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 813 .3 .2

Central Auction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82

Contents

vii

3 .3 .3

Bidding . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 833 .3 .4

Market Clearing and Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 843 .3 .5

Market Timing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863 .3.6

Sequential and Simultaneous Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 863 .3 .7

Bilateral Trading . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 893 .3.8

Scheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 903 .3.9

Gaming . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 913 .3.10

Ancillary Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 933 .3.11

Physical and Financial Markets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 943 .4

Market models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963 .4 .1

Maximalist ISO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 963 .4.2

Minimalist ISO Model . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 973 .5

Challenges . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 983 .5 .1

Market Power Evaluation and Mitigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 983 .5.2

System Capacity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 993 .5 .3

Reliability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1003 .5.4

Technical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1033 .6

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1033 .7

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103

4 Distribution in a Deregulated Market . . .. .. .. . . . . .. .. . . .. . . . . . . . . . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. 1104 .1

Introduction to the UK Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1104 .2

The Development of Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1114 .2 .1

Competition in Supply . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1114 .2 .2

The Responsibilities of Retail and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1114 .2 .3

Why Separate Distribution and Supply? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1124.2.4

Key Issues for Distribution Businesses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1124.2 .5

Information Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1134.2.6

Use of System Billing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1134.2.7

Customer Service . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1144.2.8

Competition in Metering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1144.2.9

Scope for Demand-side Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1154.3

Maintaining Distribution Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1164.3 .1

Regulatory Incentives . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1164.3.2

Technical Issues . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1174.3 .3

Planning Drivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 117

4.3.4

Long-term Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122

4.3 .5

Network Planning Tools . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1244.3.6

Asset Replacement Planning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1254.3.7

Risk Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1254.3.8

Skills and Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125

4.3.9

Network Design . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1264.3.10

Distribution Automation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127

viii

Contents

4 .3 .11

Automation Case Study - Remote Control in London Electricity . . . . . . . . . . . . . 1294 .4

Future Development . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1324 .5

Appendix : Distribution Automation in a Deregulated Environment . . . . . . . . . . . . . . . . 1334 .5 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1334 .5 .2

Remote Terminal Units . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1344 .5 .3

SCADA Master Station . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1344 .5.4

Software Functionality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1364 .5 .5

Operations and Maintenance (O&M). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1364 .5.6

System Integration, Design and Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1374 .5.7

Communication Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1404 .6

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 151

5 Transmission Expansion in the New Environment . . . . . . . . . . . . . . . . . .. .. . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . 1535 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1535 .2

Role of the TP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1555 .2 .1

Vertically Integrated Utility . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1565 .2 .2

Three Models of the Electricity Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1585 .2 .3

For-profit TP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1615 .3

New Market Organisation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1635 .3 .1

Incentive Rate Design - Price-cap Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1645 .3 .2

Priority Insurance Scheme . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1675 .3 .3

Transmission Expansion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1695 .4

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1705 .5

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 171

6 Transmission Open Access . . . . . . . . . . . . . . . . . . . . . .. . . . . .. .. . . . . . . . . . . . . . . . . . . . . . .. . . .. .. . . . . . . . . . . . . . .. . . .. . . . . . . . . . . . . 1726.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1726.1 .1

The Traditional Power Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1726.1 .2

Motivations for Restructuring the Power Industry . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1736.1 .3

Unbundling Generation, Transmission and Distribution . . . . . . . . . . . . . . . . . . . . . . . . . . . 1746.2

Components of Restructured Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1756.2 .1

Gencos . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1756.2.2

BOT Plant Operators and Contracted IPPs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1756.2 .3

Discos and Retailers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1756.2.4

Transmission Owners (TOs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1756.2 .5

Independent System Operator (ISO) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1766.2.6

Power Exchange (PX) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1766 .2.7

Scheduling Coordinators (SCs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1766.3

PX and ISO : Functions and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1766 .3 .1

PX Functions and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1766 .3 .2

California Power Exchange . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1776 .3 .3

ISO Functions and Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1786 .3.4

Classification of ISO types . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1796.4

Trading Arrangements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 183

Contents

lx

6.4.1

The Pool . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1836.4 .2

Pool and Bilateral Trades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1846.4 .3

Multilateral Trades . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1856.5

Transmission Pricing in Open-access Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1866.5 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1866.5 .2

Rolled-in Pricing Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1876.5 .3

Incremental (Marginal) Pricing Methods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1876.5 .4

Embedded Cost Recovery . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1896.5 .5

Transmission Pricing Method in the NGC, UK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1916.6

Open Transmission System Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1926.6 .1

Dispatch . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1926.6 .2

Transmission Loss Compensation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1926.6 .3

System Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1936.6 .4

Ancillary Service Provision . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1936.7

Congestion Management in Open-access Transmission Systems . . . . . . . . . . . . . . . . . . . . . . 1956.7 .1

Congestion Management in Normal Operation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1956.7 .2

Integrated Transmission Dispatch Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1986.7 .3

Illustration Using a Small Power System . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2006.7 .4

Static Security-constrained Rescheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2026.7 .5

Dynamic Security-constrained Rescheduling . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2056.8

Open-access Coordination Strategies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2096.8 .1

Price Elasticity as a Means to Relieve Congestion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2096.8 .2

Relieving Congestion by ISO Executed Price Signalling . . . . . . . . . . . . . . . . . . . . . . . . . . 2106.8 .3

Coordination between Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2116.8.4

Illustration of Transaction Coordination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2136.8 .5

Integrated Coordination Procedure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2156.9

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2166.10

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2166.11

Appendix . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2166.12

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217

7 Electric Power Industry Restructuring in China . . . . . . . . . . . . .. . . . . .. . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . . . . 2207.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2207.2

Development of Electric Power Industry in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2227.2 .1

Successive Growth of Power Production and Installed Capacity . . . . . . . . . . . . . . 2227.2 .2

Further Expansion of Power Networks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2227.2 .3

Continuous Increase of Electricity Consumption . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2247.3

Management System of Electric Power Industry in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2257 .3 .1

The State Power Corporation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2257.3 .2

Philosophy and Strategy of the SP' . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2317.4

Power Market in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2327.4 .1

Motivations for Reformation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2347.4.2

Reform Plan of the SP . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235

Contents

7 .4 .3

Obstacles in Establishing the Power Market in China . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2367 .5

Electricity Pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2377.5 .1

Basic Theory of Predicting Electricity Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2387 .5.2

Electricity Cost Derivation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2407 .5 .3

Electricity Pricing of Inter-provincial Power Market . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2427 .6

Transmission pricing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2467 .6 .1

Current Decomposition Axioms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2477 .6 .2

Mathematical Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2497 .6 .3

Methodology ofGraph Theory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2527.6 .4

Algorithms and Case Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2537.7

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2547 .8

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2547 .9

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255

8 Flexible AC Transmission Systems (FACTS) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. .. . . . . . . . . . . . . . .. 2588 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2588 .1 .1

Benefits of FACTS Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2598.2

Transmission System Limitations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2608.2 .1

System Stability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2608.2 .2

Loop Flows . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2618.2 .3

Voltage Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2618.2 .4

Thermal Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2618.2 .5

High Short-circuit Level Limits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2618.3

FACTS Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2628.3 .1

Power Switching Devices and PWM Inverter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2628.3 .2

Control Methods and DSP/Microprocessor Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . 2648.3 .3

Present Status on FACTS Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2658.4

Solution Options with FACTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2658 .4 .1

Fundamental Concepts ofTransmission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2658 .4 .2

Shunt Controllers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2668 .4 .3

Series Controllers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2718 .4.4

Combined Series/Shunt Controllers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2758 .4 .5

Phase Angle Controllers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2768 .4.6

HVDC Transmission Controllers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2788 .4.7

Other Controllers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2818 .5

FACTS Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2818.5 .1

SVC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2818.5 .2

STATCOM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2828.5 .3

TCSC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2828.5 .4

UPFC . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2838.6

Concluding Remarks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2838.7

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2848.8

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 284

Contents

xi

9 Asset Management. .. . . . . .. . . .. .. . . . . .. .. .. .. .. . . .. .. .. .. .. . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . .. .. .. .. . . .. .. . 2879 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2879.2

Pre-privatisation (1990) : The Public Purse . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2879.3

Post-privatisation (1990) : Freedom. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2889.4

Early-mid 1990s : Getting the Same for Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2889.5

1994/5+ : Getting More for Less . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2899.6

Late 1990s : Capital Efficiency . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2899.7

August 1999 Interim Report : All Chan,ge? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2909.8

The 1990/2000 Regulatory Settlement and a Major Challenge . . . . . . . . . . . . . . . . . . . . . . . . . 2909.9

Asset Ownership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2919.10

Asset Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2919.11

Asset Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2949.12

Asset Information and the Ageing Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2949.13

Condition Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2959.13 .1 Transformers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2969.13 .2

On-load Tap Changers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2979.13 .3

Switchgear . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2979.13 .4

Other Plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2979.13 .5

Understanding Long-term Asset Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2989.13.6

Underground Cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2989.13.7

HV Cables . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2999.13.8

Partial Discharge . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3009.13.9

Zero Sequence Impedance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3019.14

Asset Replacement Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3029.14 .1 Benchmarking . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3049.14.2

Asset Lifecycle . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3059.14 .3

Asset Replacement Models . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3079.14.5

Technology Strategy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3119.15

Refurbishment and Replacements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3129.16

Risk Management and Insurance Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3139.16 .1

Risk Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3139.16.2

Major Incidents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3149.16.3

Type Failures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3159.16.4

Common Mode Failure . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3159.16.5

Financial Risk Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3169.17

Asset Information Acquisition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3179 .17 .1

Asset Management Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3199 .17 .2

Data Gathering . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 319

9 .17 .3

Property Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 320

9 .17 .4

Environment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3209 .17 .5

Data Cleaning . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3219 .17 .6

Confidential Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3219 .17 .7

Quality of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 322

Xii

Contents

9.18

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3229.19

Appendix : Fuzzy DGA for Diagnosis of Multiple Incipient Faults . . . . . . . . . . . . . . . . . . . 3239.19 .1

The IEC DGA Codes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3239.19 .2

The Fuzzy IEC Code - Key Gas Method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3239.19.3

Fuzzy Diagnosis Results . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3259.19.4

Trend Analysis of Individual Faults . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3279.19.5

Comments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .3289.20

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 329

10 Power Quality .. . . . . .. . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . . .. . . . . . . . . . . . . . .. .. . . . . . . . . . 33010 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33010 .1 .1

A General Overview . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33010 .1 .2

PQ Issues During System Disturbances . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33310 .1 .3

Voltage Sags . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33410.2

Disturbance Assessment. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33610.2 .1

The Wavelet Transform . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33610.2 .2

Wavelet Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33810.2 .3

Application to PQ [25] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33910.2 .4

Automated Disturbance Assessment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34110 .3

Waveform Distortion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34210.3 .1

Harmonic Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34210.3 .2

Characterisation of Harmonic Sources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34510.3 .3

Harmonic Flows [30] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34610.3 .4

Aperiodic Distortion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34610.4

Need for Adequate PQ Indices and Standards . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34710 .5

Need for Adequate PQ Monitoring [70,71] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34810 .6

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 349

11 Information Technology Application . . . . . . . . . . . . . .. .. . . . . .. .. . . . . . . . . . . . . . . . . . . . .. . . .. .. . . . . . . . . . .. . . .. . . . . . 35311 .1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35311 .2

Software Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35411 .2 .1

Types of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35411 .2 .2

General Issues and the Future of Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36011 .3

Electricity Options Markets with Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36011 .3 .1

Electricity Markets and Options . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36211 .3 .2

Agent-Based Computational Economics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36411 .3 .3

Valuing Options with Agents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36511 .4

Evolutionary Programming-based Optimal Power Flow Algorithm . . . . . . . . . . . . . . . . . 37111 .4 .1

OPF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37311 .4 .2

EP. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37311 .4 .3

EP-OPF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37411 .4 .4

Load flow Solution . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37711 .4 .5

Gradient Acceleration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37811 .4 .6

Application Studies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 379

Contents xiii

11 .5

Complex Artificial Neural Networks for Load Flow Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . 38311 .5 .1

Conventional ANN for Real Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38411 .5 .2

New ANN for Complex Numbers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38511 .5 .3

Comparison of the two ANNs by Computer Simulation . . . . . . . . . . . . . . . . . . . . . . . . . . . 38811 .5 .4

Application of "Complex" ANN to Load Flow Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . 39011 .6

Virtual Reality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39511 .6 .1

Types of VR systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39511 .6 .2

Non-immersive (Desktop) Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39611 .6 .3

Fully Immersive Head-mounted Display Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39611 .6 .4

Semi-immersive Projection Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39611 .6 .5

Comparison between Different VR Systems . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39711 .6 .6

Cave . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39811 .6 .7 Telepresence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .39811 .6 .8

Augmented . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39811 .6 .9 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .398

11 .7

3-D Thermal Imaging for Power Equipment Monitoring . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40011 .7 .1

The Hardware . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40111 .7 .2

The Correspondence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40211 .7 .3

Display with VR . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40511 .7 .4

Implementation Example . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40711 .8

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41011 .9

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41111 .10

Appendix : System Data and Parameter Settings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41111 .11

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 411

12 Application of the Internet to Power System Monitoring and Trading.. . . .. . . . . .. . . . . . 41612.1

Introduction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41612.2

The Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41612.2 .1

What Is the Internet? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41612.2 .2

How Does the Internet Work? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41712.2 .3

What Would Happen Without the Internet? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41712.2 .4

How Can the Power Industry Benefit from the Internet? . . . . . . . . . . . . . . . . . . . . . . . . . . . 41812.2 .5

How Can I Find the Information I Need? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41912.3

Usability ofthe Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41912 .3 .1

Scientific Use for Researchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41912 .3 .2

Educational Use . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42012 .3 .3

Internet Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42012 .3.4

Business Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42012 .3 .5

Multimedia Access . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42112 .3.6

On-line Services . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42112 .3 .7

Support for Professionals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42212 .3 .8

The Power Industry and the Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42212 .3.9

Recent Improvements on the Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 424

xiv

Contents

12.4

Internet Technology . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42412 .4 .1

Access to the Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42512 .4 .2

Operating Platforms on the Internet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42612 .4 .3

Web Clients . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42612 .4.4

Web Servers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42712 .4 .5

Web Protocols . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42712 .4.6 E-mail . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42712 .4 .7

Internet Security . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42812 .4 .8

Internet Bandwidth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43112.5

Internet Programming Languages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43312 .5 .1

HTML . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43312.5.2

Interpreted Versus Compiled Languages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43312.5 .3

What Is JavaScript? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43412.5.4

What Is Java'? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43512.6

Web Pages . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43612.6 .1

Setting up a Web Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43712.6.2

Difference Between a Static and a Dynamic Web Page . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43712.6.3

Displaying Database Content . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 43812.6.4

Web Pages with Functionality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44012.6.5

Web Pages with Integrated Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44112.7

XML . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44112.7 .1

Why the Need for XML? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44112.7.2

Reasons for XML . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44112.7 .3

Separation of Content and Layout . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44212.7.4

XML Layout Validation with DTD . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44412.7 .5

Stylesheets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44412.8

Case Study 1 : Power Station Monitoring [8] . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44512.8 .1

Requirements of Airport Substation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44512.8 .2

System Implementation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44712.8 .3

Monitoring Power Station Equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45412.9

Case Study 2 : Power Trading Application . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45712.9 .1

Trading Platform Architecture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45812.10

Conclusions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45912.11

Acknowledgements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46012.12

References . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 460

Index . . . . . . . . . . . . . . . . . . . . . .. . . . . . . .. .. .. . . . . . . . . . . .. . . . . . . . . . . . . . . . .. . . . . . . . . . . .. .. . . . . . . . . . . . . . . . . . . . . . . . . . .. .. .. . . . . . . . . . . . .. . . . . . . . . 461

ForewordThe electricity power utilities in many countries have been, or are being, restructured.There are many reasons for restructuring . In some countries restructuring has been drivenby the desire of government to meet increasing demands for electricity by encouragingindependent power production, which relieves government of a financial obligation . Incountries where ownership of assests are in private hands, restructuring has been driven bymergers and acquisitions, as companies seek to gain competitive advantage .

In the most advanced countries, restructuring is being driven by the desire to allowconsumers to choose their electricity supplier on the basis of price and service provided .These dramatic changes in the organisation of electricity power utilities bring with themnew challenges and opportunities, as the previous centrally designed and operated systemsare dismantled and replaced by a new competitive framework .

Companies operating in a competitive market need more sophisticated control andmanagement systems to ensure that their business objectives can be achieved . Thedevelopment and application of new technologies is also accelerated in this newenvironment, as companies seek to improve their effectiveness and efficiency .

This book is contributed by a group of world authorities . It explains in depth the reasonfor restructuring, without including superfluous detail . Examples are given from variouscountries . Details are provided on new strategies and technologies which are being appliedin the areas of generation, transmission and supply . The implications for the environmentare also reviewed . Tools being utilised for asset management and for the effectivemanagement of infrastructure are illustrated with practical examples. The analyticalmodelling and general analysis of competitive power markets are also illustrated.

This book provides a comprehensive review of all the many facets of change takingplace in a dynamic industry . It is compulsory reading for graduates and engineers, andother professionals, who are entering or involved in the electricity power industry .

David G . Jefferies CBE, FREng, HonFIEE

IEE President 1997/8Former Chairman, The National Grid Group plc, UK

xv

Preface

This book was written as a result of the ongoing stimulating world-wide deregulation andrestructuring of the power industry . This move away from the traditional monopolies andtowards greater competition, in the form of increased numbers of independent powerproducers and an unbundling of the main service, started in the United Kingdom in 1989and this change was driven by the large differences in electricity tariffs across regions, byadvancements in technologies which allow small producers to compete with large ones,and by a strong beliefthat competition will produce an all-win situation .

The book was contributed by an international group of experts to produce a broad anddetailed coverage of the main issues . The intent has been to provide the reader with an indepth treatment but without excessive specialisation, to avoid a purely qualitative treatmentby including some analytical and numerical methods, and to offer, whenever possible, realcase studies, worked examples and project discussions .

Since each power utility is unique, it will not be possible to present the best path tofollow in the restructuring exercise . The market models, regulation and tariffs used bytransmission networks, and the mechanism for maintaining a high level of reliability, willbe different . Because of the advancement of communications technology and increasedcomputing power, it is possible to consider different market structures . Without suchadvancement, no information could be available in time for the business operation .

Different markets have been considered in the book . In brief, they could be summarisedas three types . In the completely market-driven environment, market forces seek tomoderate the behaviour of various players in the market, e.g . the suppliers, consumers andstatutory regulators . In the transitional market, there is a process of transition from a highlyregulated environment to a deregulated environment . In the embryonic free market, thestate retains ownership of the generators and some of the transmission infrastructure, butopens up the market to limited competition at the distribution level .

As there is much uncertainty in these environments, due to the structure of the market,planning over a long-term horizon is perceived as very difficult at present . Yet, withoutlong-term planning, it is unlikely that the electricity power industry would be at great risk,as it might not be able to supply the growing demand, or to maintain the same quality ofservice as it is currently providing to its consumers . The recent chaos in California is anexample . This could have very serious consequences to the long-term viability of the entireindustry .

This book shows how new technology will allow us to change today's highly regulatedmarket structure to one that relies on competition to set the energy price . By using newtechnologies, we can use less energy, resulting in lower energy bills for customers, andavoid or defer additional expensive plant construction. The addition of new participants,such as independent power producers, power marketers and brokers, has added a newdimension to the task of maintaining a reliable electric system . This book will detailmethods by taking into account some ofthese issues .

In the new market environment, generation represents most of the cost . Chapter 1reports on the development of new strategies and compares different technologies forelectricity generation with environmental and political considerations . This includes

xvii

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Preface

decentralised power supplies, renewables, regulatory constraints, new technical challengesand solutions . Different mechanisms, such as the pool, have been set up for the operation ofthe new emerging electrical market. The market should dictate when new generation isneeded and where it is located .

Since there is a large number of players in the market, it is important to work out thetype of bidding, or negotiation strategies that each player can use . It is especially importantto work out the information content of the bidding strategies . Chapter 2 covers experiencefrom various countries on power utility restructuring and deregulation . Analytical tools forthe modelling and analysis of competitive power markets are presented. Chapter 3 alsodiscusses several wholesale electricity markets around the world and most of these are in acontinuous process of change . This evolutionary process is being driven by the need toaddress some of the outstanding issues in the design and implementation of these markets .Some challenges, such as reliability, market power evaluation and mitigation, are outlined .

Chapter 4 reports on the change in distribution business in a deregulated market .Various issues such as planning, control, load forecasting, metering, customer services andrisk assessment have been considered . A case study on the remote control of LondonElectricity is included .

Chapter 5 deals with transmission expansion . Following development of the market, thetransmission provider transforms into the independent transmission company (ITC) so as toadmit a highly sophisticated market . The ITC is required to make complex businessdecisions over a wide range of time scales, such as the long-term, short-term and near real-time . This chapter discusses future directions and modifications to the regulatory policiesto make the ITC serve as both a market maker and a service provider .

Chapter 6 presents the economic issues associated with transmission open access . Thechapter also provides a discussion of some important operational issues in the emergingmarket environment . Normal dispatch, congestion management and the effects of securityconsiderations have all been discussed with examples from the open-access viewpoint .

Chapter 7 deals with the Chinese market . A detailed background on the change ofindustry is given . It also explains why the approaches adopted by the developed countriesare not suitable . The chapter also proposes a new approach to calculate transmission loss .To operate the ever increasingly complex power systems with better efficiency, an accuratetransmission loss model is indispensable .

In the rapidly deregulating utility environment, reactive power control to assure voltagestability and power flow control to avoid line overloading and congestion have becomenecessary considerations in power system operation . Flexibility AC transmission systems(FACTS), which are based on power electronics technology, have revolutionised the fieldof electric power engineering . Chapter 8 presents the application of FACTS to utilise thecapability of existing transmission systems . The impact of FACTS for new generationentrants is discussed .

Chapter 9 deals with asset management. A comprehensive asset management model isrequired to support business in the deregulated electricity market . The main purpose andcharacteristics of the model components are described in detail . It will benefit all internaland external users in the open-access environment, resulting in realistic and transparentopen-access charges, and bring long-term economic benefits to all parties . Tools foreffective asset management in power industry restructuring are illustrated with practicalexamples .

Preface

xix

Electricity industry restructuring has had a dramatic impact on the energy market . Togain a competitive advantage, today's energy providers need to focus on value-addedproducts and services, such as power quality . Power quality is a critical issue for industrialcustomers, especially in the high-tech sector . In order to understand power quality, manycustomers or energy providers have installed power quality monitoring systems to recordelectrical system performance and/or facility equipment reactions, and the analysis of themonitored data has become a challenge . Chapter 10 reports on the techniques, methods andstandards used or proposed for power quality issues .

The explosion in the use of information technology has seen the introduction ofcomputer-based work management systems, Basset management systems, and controlsystems to manage system operation . Information technology is making markets moreefficient, resource production less speculative and costly, and the delivery and monitoringof energy more effective, while enfranchising customers to make more intelligent choices .Improvements in information technology will continue to allow economical and reliablesolutions to problems facing the power industry . Chapter 11 introduces intelligent agents,genetic algorithms, evolutionary programming, artificial neural networks and virtual realitytechnology, and reports on their applications to load flow, valuing electrical options andpower equipment diagnosis . The chapter highlights the technology behind the new marketbrought about by deregulation . Energy service companies will continue to make increasingdemands for more sophisticated software and equipment to monitor and control variousaspects of power delivery .

In just a few years, Java has taken the networked world by storm . Java combinespowerful, object-oriented programming with the ability to run on any computer platformwithout the need for recompiling or translating . Java promises to play a yet morefundamental role in the future of on-line computing, including electronic commerce, for itcan allow anyone to make use of powerful applications anywhere . One result of itsplatform independence is that a scrap of code called a Java applet can be embedded in aWorld Wide Web page . Chapter 12 deals with the application of the Internet to powerstation monitoring and discusses its use for energy trading . It also presents an introductionto Web technology and its applications .

This book addresses the most up-to-date problems and their solutions in the area ofpower system restructuring and deregulation in a cohesive manner . It will provideinvaluable information for power engineers, educators, system operators, managers,planners and researchers .

Loi Lei Lai

AcknowledgementsThe editor wishes to thank Mr Peter Mitchell of Wiley and his team in supporting thisproject .

The editor also wishes to thank all the contributors, without whose support this bookcould not have been completed. In particular, the editor thanks Harald Braun in managingto complete the manuscript despite great difficulties caused by software incompatibility .The editor also wishes to thank Mrs Vinay Sood and Professor Sood for their creation ofthe initial manuscript . The editor is very grateful to Dr David Jefferies for writing theForeword . The permission to reproduce copyright materials by the IEEE and IEE for anumber of papers mentioned in some of the chapters is most helpful . The arrangement ofthe index by Miss Qi Ling Lai and Chun Sing Lai is much appreciated.

Last but not least, we all thank Wiley for supporting the preparation of this book and forthe extremely pleasant co-operation .

xxi

ContributorsDr Loi Lei Lai was appointed Senior Lecturer at Staffordshire Polytechnic (nowStaffordshire University) in 1984 . From 1986 to 1987, he was a Royal Academy ofEngineering Industrial Fellow to both GEC Alsthom Turbine Generators Ltd and itsEngineering Research Centre . He is currently Head of Energy Systems Group and Readerin Electrical Engineering at City University, London . He is also an Honorary Professor atthe North China Electric Power University, Beijing . Dr Lai is a Senior Member of theIEEE and a Corporate Member of the IEE . He has authored/co-authored over 100 technicalpapers . In 1998, he also wrote a book entitled Intelligent System Applications in PowerEngineering - Evolutionary Programming and Neural Networks published by Wiley .Recently, he was awarded the IEEE Third Millennium Medal and 2000 IEEE PowerEngineering Society UKRI Chapter Outstanding Engineer Award . In 1995, he received ahigh-quality paper prize from the International Association of Desalination, USA . Amonghis professional activities are his contributions to the organisation of several internationalconferences in power engineering and evolutionary computing, and he was the ConferenceChairman of the International Conference on Power Utility Deregulation, Restructuringand Power Technologies 2000 . Recently, he was invited by the Hong Kong Institution ofEngineers to be the Chairman of an Accreditation Visit to accredit the University BEng(Hons) degree in electrical engineering . Dr Lai is also Student Recruitment Officer, IEEEUKRI Section . In 1999, he was included in The Dictionary ofContemporary Celebrities ofWorldwide Chinese . In 2000, his biography was included in the 18th Edition of Who's Whoin the World, Marquis, USA . His biography has also been selected for inclusion in the 2001Who's Who in Science and Engineering, Marquis, USA .

Professor Jos Arrillaga obtained his MSc, PhD and DSc from UMIST, Manchester, UK.He is a Fellow of the IEEE and a Fellow of the Royal Society of New Zealand . From 1970to 1975, he was Head ofthe Power Systems and High Voltage Groups, UMIST. From 1975to 1999 he was Professor of Electrical Engineering, University of Canterbury,Christchurch, New Zealand . From 1982 to 1995, he was also the Director of SystemsSoftware & Instrumentation (a Christchurch-based consulting company established in1982) . From 1985 to 1990, he was Head of Department, Electrical and ElectronicEngineering, University of Canterbury . From 1988 to 1995, he was a Member of theCIGRE-14 Working Group on HVdc harmonics (14-03) . From 1989 to 1995, he wasConvenor of CIGRE Task Force 36-05/14-03-03 on AC System Harmonic Modelling forAC Filter Design . From 1990 to 1996, he was a Member of CIGRE JWG 11/14-09 on UnitConnection . From 1996 to 1999, he was Convenor of CIGRE Task Force 14.25 onHarmonic Cross-modulation in HVdc Transmission . Since 1990 and 1995 respectively, hehas been Director of CHART Instruments, Christchurch and Director of Power QualityConsulting, a Christchurch-based consulting company. Professor Arrillaga has receivedmany awards, such as John Hopkins Premium of the IEE, UK, 1975 ; the Best PaperPremium, IEEE Conference on Harmonics and Quality of Power, ICHQP94, 1994 ; the BestElectrotechnical Paper, IPENZ Annual Conference, 1996 ; Uno Lamm High Voltage DirectCurrent Award, IEEE, 1997 ; John Munganest International Power Quality Award of thePower Industry, 1997 ; President's (Gold Medal) Award, Annual Meeting of IPENZ, 1998 ;

xxiii

xxiv

Biography

the Best electrotechnical paper, IPENZ Annual Conference, 1999 ; Silver Medal of the NewZealand Royal Society for Innovation in Science and Technology, 2000; and CIGRE(Paris) Technical Committees Award, 2000 .

Mr Harald Braun trained in the area of power electronics with Siemens, Frankfurt,Germany, from 1985 to 1989 . He obtained his Diploma in Telecommunication atFriedberg-Giessen University, Germany, in 1994 . He was a part-time lecturer at CityUniversity, London, from 1994 to 1996 in teaching object-oriented programming in C++ .He was a Senior Programmer at A.M . BEST International Ltd, London, from 1996 to 2000 .At present, he is a Senior Software Engineer with ALTIO, London, developing newInternet technology software . He is working for his PhD at City University on a part-timebasis and expects to achieve it in July 2001 . His research interest is the extraction ofinformation from data using neural network technology .

Professor A. Kumar David is Chair Professor and hHad of the Department of ElectricalEngineering, The Hong Kong Polytechnic University . His BE degree is from the Universityof Ceylon and PhD from Imperial College, London . He has previously worked in SriLanka, USA, Zimbabwe and Sweden and his research interests are in power systemrestructuring, pricing, control, HVDC, transient stability, protection and reliability .Professor David was elected an IEEE Fellow in 2000 for his outstanding contributions toelectricity supply industry reform and open transmission access . He is the regional editorfor Asia of the InternationalJournal of'Electric Power Systems Research .

Mr Robert Friel is responsible for strategy development in LPN (London PowerNetworks), which is the distribution company of the London Electricity Group . Mr Frielhas extensive experience of the planning and development of both private and publicelectricity distribution systems in the UK and abroad . He joined London Electricity in 1997and helped develop the distribution businesses, response to the last regulatory price control .Mr Friel is a Chartered Engineer and a Member of the IEE .

Professor Marija Ilic has been at MIT since 1987 as a Senior Research Scientist in theEELS Department where she conducts research and teaches graduate courses in the area ofelectric power systems . Since September 1999 she has had a joint appointment at theNational Science Foundation as a Program Director for Control, Networks andComputational Intelligence . Prior to coming to MIT, she was a tenured faculty at theUniversity of Illinois at Urbana-Champaign .

Professor Ilic is a recipient of the FirstPresidential Young Investigator Award for Power Systems ; she is also an IEEE Fellow andan IEEE Distinguished Lecturer . Professor Ilic has co-authored several books on thesubject of large-scale electric power systems (Ilic, M . and Zaborszky, J ., Dynarnics andControl of'Large Electric Power Svstems, John Wiley & Sons, New York, 2000 ; llic, M.,Galiana, F . and Fink, L . (Editors), Power Svstems Restructuring: Engineering andEconomics, Kluwer Academic Publishers, Second printing 2000 ; Allen, E . and Ilic, M.,Price-Based Commitment Decisions in the Electricity Markets, Springer-Verlag, London,1999 ; Ilic, M . and Liu, S ., Hierarchical Power Systems Control: Its Value in a ChangingIndustr-v, Springer-Verlag, London, 1996) . She is also a contributor to the edited bookBlue Print,fbr Transmission (PU Reports, 2000) . Her interest is in control and design oflarge-scale systems .

Biography

xxv

Dr David G. Jefferies, CBE has been Chairman of the National Grid Company plc since1990, when the Company was formed as part of the privatisation of the UK electricitysector . His bold and far-sighted leadership has been a key ingredient in its success of theNational Grid Group plc from the performance of the transmission system during a decadeof major change in the industry, through the conception and development of Energis, to thegrowth of the group internationally. He retired as the Chairman of the National Grid Groupplc in July 1999 . Dr Jefferies was previously Chairman of the London Electricity Boardand of Viridian plc .

He was the 1997/98 IEE President . Owing to his huge contributionmade to the Institution, he is an Honorary Fellow of the IEE .

He is also a Fellow of theRoyal Academy of Engineering . He was a pioneer in the restructuring and deregulation ofthe UK electric power utility .

Professor Chen-Ching Liu received his PhD from the University of California, Berkeley,in 1983 . Since then, he has been at the University of Washington, Seattle . He is currentlyProfessor of Electrical Engineering and Associate Dean of Engineering at the University .Dr Liu is a Fellow of the IEEE and the US representative on CIGRE Study Committee 38 .His areas of interest include power system economics, intelligent system applications andvulnerability assessment .

Professor K.L . Lo obtained his MSc and PhD from the University of Manchester Instituteof Science and Technology . He is currently the Head of the Power Systems ResearchGroup at the University of Strathclyde . His group specialises in energy managementsystems, issues concerning the electricity market and deregulation, simulation, analysis,monitoring and control of power networks . Professor Lo has been an international advisorand member of many organising committees of international conferences,consultant/visiting professor to over 12 educational institutions, and has lecturedextensively in the Far East, Europe and America . He is the author of over 260 technicalpublications . He is a Fellow of the IEE and a Fellow ofthe Royal Society of Edinburgh .

Mr Kevin Morton is a member of London Electricity's Executive and is currently theManaging Director of both London Power Networks (LPN), which is the distributionbusiness of London Electricity, and London Electricity Services (LES), which is the privatenetworks business of London Electricity . As Head of the Public Distribution Business heled the work during 1999 which culminated in the formation of 24seven, the joint venturenetwork management services provider formed by LE and TXU Europe (EasternElectricity) . He has been in the electricity supply industry for 25 years in a variety of bothoperational and strategic roles within the distribution business . He has a practicalengineering background having worked in a number of operational, project manager andleadership roles in utility power distribution . Mr Morton is a Chartered Electrical Engineerand a Fellow of the IEE . He also represents the UK in the business area of distribution atEURELECTRIC, the pan-European association of electricity companies .

Professor Mark O'Malley received his BE and PhD degrees from the National Universityof Ireland, Dublin, in 1983 and 1987 respectively . He is currently a Professor at theNational University of Ireland, Dublin, with research interests in power systems, controltheory and biomedical engineering .

xxvi

Biography

Professor Gerald B. Sheble is a Professor of Electrical and Computer Engineering, IowaState University, Ames, Iowa . He received his BS and MS degrees in electrical engineeringfrom Purdue University and his PhD in electrical engineering from Virginia Tech . Hisindustrial experience includes over 15 years with a public utility (Commonwealth Edison),with a research and development firm (Systems Control), with a computer vendor (ControlData Corporation) and with a consulting firm (Energy and Control Consultants) . He hasparticipated in the functional definition, analysis and design of power system applicationsfor several energy management systems since 1971 . Dr Sheble also designed theoptimisation 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 andEurope on electric industry deregulation as well as expert witness testimony on theNational Electric Code and Intellectual Property Rights . His consulting experienceincludes significant projects with over 40 companies . He developed and implemented oneof the first electric market simulators for the Electric Power Research Institute usinggenetic algorithms to simulate the competing players . He conducts approximately 24seminars each year on optimisation, artificial neural networks, genetic algorithms andgenetic programming, and electric power deregulation around the world . His primaryexpertise is in power system optimisation, scheduling and control . Dr Sheble has beenawarded over 1 million dollars of research support over the last 10 years, primarily in theapplication of adaptive agents to market bidding .

He has authored a review of adaptiveagent market-playing algorithms for the Kluwer press release Power SystemsRestructuring : Engineering and Economics edited by Ilic, Galiana and Fink. He haswritten a monograph on tools and techniques for energy deregulation entitledComputational Auction Mechanisms for Restructured Power Industrv . He has also been aninvited guest on radio talk shows and a resource for several news articles on electric powerderegulation and industrial trends . His research interests include power systemoptimisation, scheduling and control . Professor Sheble is an IEEE Fellow .

Professor Vijay Sood obtained his BSc from University College, Nairobi, and his MScdegree from Strathclyde University, Glasgow, in 1969 . He obtained his PhD degree inpower electronics from the University of Bradford, England, in 1977 . From 1969 to 1976,Dr Sood was employed at the Railway Technical Centre, Derby . Since 1976, he has beenemployed as a Researcher at IREQ (Hydro-Quebec) in Montreal . Dr Sood also has heldAdjunct Professorship at Concordia University, Montreal, since 1979 . Dr Sood is aMember of the Ordre des ingenieurs du Quebec, a Senior Member of the IEEE, a memberof the IEE and a Fellow of the Engineering Institute of Canada. He is the recipient of the1998 Outstanding Service Award from IEEE Canada, the 1999 Meritas Award from theOrdre des Ingenieurs du Quebec, and the IEEE Third Millennium Medal. Dr Sood ispresently the Managing Editor of the IEEE Canadian Review (a quarterly journal for IEEECanada) . He is a Director and Treasurer of IEEE Montreal Conferences Inc . He has workedon the analog and digital modelling of electrical power systems and their controllers forover 25 years . His research interests are focused on the monitoring, control and protectionof power systems using artificial intelligence techniques . Recently, Dr Sood has beeninterested in the Internet and its applications for teaching purposes and was mandated byIEEE Canada to publish the journal IEEE Canadian Review on the Internet (www.ieee.ca) .Dr Sood has published over 70 articles and written two book chapters . He has supervised14 postgraduate students and examined 17 PhD candidates from universities all over theworld . He is well known amongst the electrical engineering community in Canada .

Biography

xxvii

Mr Cliff Walton is Technical & Regulation Manager of London Power Networks (LPN) .LPN is the distribution business of the London Electricity Group . In his current position, heis responsible for all technical and regulatory matters regarding the public electricitydistribution system in London and particularly the quality of supply and reliabilityperformance that sets London apart . He has previously been Strategy Manager, AssetManager and Planning Manager for London Electricity's Public Networks Group. In hisrecent roles he has championed the development of an integrated technology strategy,strategic asset management, fault causation analysis, incipient fault detection and locationtechniques, as well as creating the strategies behind the implementation of one of thelargest distribution remote control, telemetry and automation projects . Mr Walton joinedLPN when it was established in April 2000 ; his career in electricity distribution spans 29years . He has worked with a number of overseas utilities and has written and presentedmany papers on a wide variety of technical and asset governance and management issues .He is a Chartered Electrical Engineer and a Member of both the IEE and IEEE .

Professor Xifan Wang was born in May 1936 . He graduated from Xi'an JiaotongUniversity in 1957 . He has since been with the School of Electrical Engineering of theuniversity, where he now holds the rank of Professor and is the Director of the ElectricPower System Department . He is a Senior Member of the IEEE . From September 1981 toSeptember 1983, he worked in the School of Electrical Engineering at Comell Universityin Ithaca, New York, USA as a Visiting Scientist. From September 1991 to September1993 he worked at the Kyushu Institute of Technology in Kitakyushu, Japan, as a VisitingProfessor . Prof Wang has a 40-year experience of researching and teaching in electricpower system analysis and planning . His main research fields include reliability evaluation,generation and transmission network planning, operation planning, system contingencyanalysis, dynamic and transient stability, short-circuit current calculation, optimal loadflow, and probabilistic load flow . He is especially proficient in constructing mathematicalmodels and developing application software in the above areas . He also took part in manyresearch and planning tasks of key electric power projects in China, such as the ThreeGorges Hydro-Power Station . He proposed a new transmission system, namely thefractional frequency transmission system (FFTS) which uses a lower frequency to reducethe reactance of AC transmission systems . In recent years, he has been researching theelectric power market .

Dr Neville R . Watson received his BE (Hons) and PhD degrees from the University ofCanterbury (New Zealand), where he is now a Senior Lecturer . Dr Watson has authoredand co-authored approximately 100 technical papers and 3 books . Paper awards receivedinclude ; Best Paper Award (The Sixth International Conference on Harmonics in PowerSystems, 1994), the William Perry Award (IPENZ) and Finalist for the Carter Holt HarveyPacking Award for Innovative Technology (IPENZ) . He has also given a number of invitedlectures in Singapore, Australia and Canada .

Professor Fushuan Wen received his BEng and MEng degrees from Tianjin University,China, in 1985 and 1988, respectively, and his PhD from Zhejiang University, China, in1991, all in electrical engineering . He was a Postdoctoral Fellow at Zhejiang Universityfrom 1991 to 1993 . He joined the faculty of Zhejiang University in 1993, and has been aProfessor of Electrical Engineering since 1997 . He held a visiting position at the National

xxviii

Biography

University of Singapore from 1995 to 1997 . He is on leave from Zhejiang University and isnow with Hong Kong Polytechnic University as a research fellow . Dr Wen is recipient ofthe National Natural Science Award of China, Zhejiang Provincial Top Young ScientistAward and several other awards from the Ministry of Education (China), Zhejiangprovincial government, Zhejiang University and the National University of Singapore . Heis a member of the editorial board of the Journal ofAutomation ofElectric Power Systems(in Chinese) and was a guest editor of a special issue on `Artificial intelligence applicationsin power systems' . His research interests are in power system restructuring and artificialintelligence applications in power systems .

Professor Kit Po Wong obtained MSc, PhD and DEng from University of ManchesterInstitute of Science and Technology in 1971, 1974 and 2001 respectively . Currently he isProfessor in Electrical Engineering at the University of Western Australia . He has workedon power system dynamics, protection, electromagnetic transient evaluation, long-distancetransmission, artificial intelligence and computational intelligence in power systemoperation and planning . Professor Wong has published over 160 research papers and hasbeen awarded the Sir John Madsen Medal of the Institution of Engineers Australia . He wasthe Founding Chairman of the Western Australia Chapter of the IEEE Power EngineeringSociety and was the Chairman of the Western Australia Section of the IEEE from 1999 to2000 . He has been a member of numerous technical committees for internationalconferences . Professor Wong was the General Chairman of the IEEE PES/CSEE 2000International Conference on Power Systems Technology (Powercon 2000) . He is aneditorial board member of the international journal Electric Power Systems Research andthe Australian Journal of Intelligent Information Processing Systems . In 1999, he wasawarded the Outstanding Engineer Award of the IEEE Power Engineering Society WAChapter. He was a recipient of the IEEE Third Millennium Medal in 2000 . Professor Wongis a Fellow of the Hong Kong Institution of Engineers, Fellow of Institution of EngineersAustralia, Senior Member of the IEEE, and Member ofthe IEE .

Miss Yee Shan Cherry Yuen acquired her degree of Bachelor of Engineering in ElectricalEnergy Systems Engineering at The University of Hong Kong in 1996 . In the same yearMiss Yuen was awarded The China Light & Power Company Prize in Electrical Energy,because of the distinction of her final year project entitled `The application of artificialneural networks on the detection of high impedance faults' . During 1996 to 1998 MissYuen pursued the degree of Master of Philosophy with a thesis entitled `Fault detection andovervoltage protection in low voltage power systems' . In 1998 she was awarded the ChinaLight & Power Co . Ltd . Electrical Energy Postgraduate Scholarship . In the same year shewas awarded John Swire & Sons Ltd . James Henry Scott Scholarship for EngineeringStudies at the University of Strathclyde which enabled her to pursue the degree of Doctorof Philosophy in Scotland . Miss Yuen is also an Associate Member of the IEE . Her currentresearch interests include the analysis of international energy markets, congestionmanagement, transmission pricing and the application of information technology in energymarkets .

Mr Yong T. Yoon received SB degrees in applied mathematics and in electricalengineering and computer science and MEng degree in electrical engineering and computer

Biography

xxix

science from the Massachusetts Institute of Technology (MIT), Cambridge, in 1995 and in1997, respectively . He is currently pursuing a PhD degree (February 2001) in electricalengineering and computer science at MIT, concentrating on electric power systemeconomics engineering . His thesis is entitled `Electric power network economics :underlying principles for for-profit independent transmission company (ITC) and designingarchitecture for reliability' .

His research interests include modelling of energy markets asstochastic dynamic systems, developing concepts for the ITC and designing software toolsfor various energy market participants . He has a strong background in control, estimation,mathematics, research design and regulatory economics .

Index

3-D thermal image, 402access fees, 162, 165, 167active reserves, 25ageing assets, 295air pollution, 234, 256allocation factor, 248, 249, 251amplitude modulation, 344ancillary service, 25, 46, 61, 65, 76, 78,

79, 80, 86, 87, 92, 93, 94, 96, 97, 98,99, 100, 101, 104, 106, 107, 139, 179,180, 186, 191, 192, 193, 194, 195,198, 199, 218

ancillary services markets, 79, 80, 86,92, 93, 94, 97, 99, 107

aperiodic component, 346Application Service Provider, 423arcing, 299, 323, 334artificial intelligence, xix, xxi, 121, 354,

413, 414, 415, 424artificial neural network, xix, 107, 121,

151, 353, 412, 414asset governance, xxasset manager, 111, 112, 127, 296, 306,

313,322asset owner, 111, 289, 293asset replacement, 116, 117, 122, 124,

125, 130, 290, 307asset utilisation, 129, 281, 287asynchronous interconnector, 331auction mechanisms, 61, 96, 109auto-change-over devices, 127automatic generator control, 76autonomous generation schemes, 27autonomy, 355, 356, 359auto-reclosers, 127, 128auto-regressive moving average, 121available transfer capability, 138

back-to-back thyristors, 269, 273balancing market, 68, 78, 85, 113

battery charging, 28benchmark, 116, 125, 128, 157, 163bid prices, 23, 98, 176bilateral contracts, 24, 61, 68, 71, 73, 74,

91, 107, 154, 155, 158, 167, 168, 184,197, 209, 257

bilateral model, 96binding day-ahead market, 86biomass, 9, 12black-start capability, 93, 194

C++ language, 136capacity payment, 23, 100capacity reserve, 240capacity rights, 215catastrophic failure, 100, 296, 314, 315cellular phone, 134, 144central auction, 82, 83, 84, 86, 89, 90,

91, 95, 96central control systems, 128central utility model, 52CGI, 139, 437, 438, 440, 451chromosomes, 40, 41clean coal technologies, 20, 45client server, 426, 446climate change, 11, 19co-generators, 2, 3collaborative agents, 354, 355, 356, 357combined heat and power, 5, 15, 45combined-cycle, 10, 65common gateway interface, 139, 437communication systems, 127, 128, 146,

148,259competition, xii, 1, 2, 4, 5, 8, 9, 11, 15,

16, 20, 45, 47, 50, 51, 52, 53, 54, 55,56, 57, 60, 63, 67, 72, 73, 76, 77, 78,79, 100, 110, 111, 114, 125, 126, 127,142, 145, 151, 153, 154, 155, 163,167, 173, 174, 183, 185, 226, 228,229, 236, 254, 258, 262, 290, 293,

Power System Restructuring and Deregulation Edited by Loi Lei Lai

Copyright © 2001 John Wiley & Sons Ltd ISBNs: 0-471-49500-X (Hardback); 0-470-84611-9 (Electronic)

462

304, 329, 330, 332, 334, 347, 356,360, 373, 377, 420, 457

competitive bidding, 1, 65competitive framework, xi, 110, 353competitive generation, 2, 3, 4, 107competitive metering, 114competitive trading, 24computational intelligence, xxi, 353condition monitoring, 129, 132, 295,

300, 304, 312, 313, 320, 322, 328,445

congestion management, xiii, xxi, 58,69, 70, 71, 75, 78, 79, 86, 88, 89, 90,92, 93, 94, 95, 97, 99, 104, 178, 180,188, 195, 198, 200, 209, 215, 216,217, 218, 219

congestion management markets, 93, 94contract market, 10, 61, 68, 179contract path allocation, 57corporate restructuring, 293cost/benefit analysis, 310crossover, 40, 41, 273, 274, 370

damper, 273, 274data polling, 451, 452, 454data security, 458data streaming, 451, 452, 453, 454database, 136, 137, 319, 321, 408, 419,

420, 437, 438, 439, 440, 458day-ahead, 61, 69, 79, 86day-ahead market, 71, 78, 90, 176, 178,

191delivery time, 86, 421, 423demand growth, 123demand side management, 115demand-side bidding, 68deregulation, xii, xiii, xiv, xviii, xix, 1, 2,

5, 6, 7, 9, 10, 15, 19, 45, 48, 50, 51,52, 55, 57, 58, 64, 70, 71, 73, 108,111,116,119,133,140,153,161,167, 171, 173, 175, 202, 217, 218,232, 259, 283, 316, 330, 331, 332,334, 348, 353, 360, 457

deregulation of energy market, 418desalination plant, 38, 49discrete wavelet transform, 338

Index

dissolved gas analysis, 296, 323, 329distributed generation, 13, 16, 17, 20, 21,

22, 23, 25, 26, 46, 48, 99, 108, 144,164

distributed generation technologies, 13distribution automation, 127, 128, 147,

148, 151, 418distribution companies, 4, 63, 64, 110,

111,113,115,116,117,119,154,175, 302, 316, 318, 353, 361

distribution loss, 63district heating, 21disturbance recognition, 341, 350

economic dispatch, 53, 77, 78, 82, 109,121, 133, 374, 414

eddy currents, 325, 326elasticity, 59, 192, 195, 196, 209, 215,

220electrical discharge, 296, 300electricity and gas networks, 111electricity distribution industry, 111electronic auction markets, 10e-mail, 354, 420, 425, 427, 428, 429embedded cost, 57, 58, 186, 187, 189,

190,194embedded generators, 112embedded systems, 128emissions-free electricity, 19energy function, 206, 385energy mix, 6energy policy, 16, 48energy purchase cost, 113energy storage, 5, 13, 259, 264, 269,

270,285English auction, 55, 56equilibrium point, 68, 69, 84, 97, 206,

207ethernet, 348evolutionary computing, xvi, 353evolutionary process, xiii, 98, 163evolutionary programming, 49, 353, 410ex ante market, 61ex post market, 61, 73excitation capacitance, 27, 28, 32, 35expert systems, 353, 355

Index

facilitators, 359fiber optic communication, 147fiber-based transmission, 142file types, 421financial markets, 78, 88, 94, 97, 171financial transmission rights, 95first rejected offer, 55flexible AC transmission system, 162flicker, 266, 331, 342, 346, 347, 352force-commutated converters, 278forward markets, 71, 86, 95, 106, 178,

361fossil fuel, 3, 4, 6, 45, 53Fourier transform, 336, 347free space lasers, 141frequency modulation, 144fuel cells, 10, 12, 13, 20, 21, 26, 99, 330full graphics interface, 134futures market, 8, 68, 74, 104, 186, 361,362,364

fuzzy diagnosis, 323, 325, 328fuzzy logic, 38, 49, 341, 412

gaming, 50, 78, 83, 88, 91, 92, 95, 98,99,107

gas industry, 165gas turbine technology, 173generation companies, 22, 67, 72, 73, 99,

175,361generation mix, 11generation model, 8generation scheduling, 53, 104, 109,

156, 180, 412genetic algorithm, xix, 49, 360, 362,

364, 365, 367, 370, 410, 412, 414GIF image, 421government intervention, 16, 45graph theory, 246, 251green certificates, 17green energy, 20greenhouse gas reduction, 5GTO, 262, 263, 264, 268, 270, 274, 275,

278, 279, 280, 283

463

harmonic distortion, 13, 26, 331, 346,348

harmonic instabilities, 344head-mounted displays, 395hedging, 65, 95, 360hedging contracts, 65hidden nodes, 384, 386, 388, 389hot spots, 297, 400, 407, 410hour-ahead market, 158, 176, 178HVDC, xvii, 73, 260, 263, 264, 266,

274, 277, 278, 279, 280, 281, 286hybrid agent, 355, 358, 359hydro, 3, 5, 6, 12, 13, 20, 68, 72, 73,

105, 174, 229, 259, 280, 330

IGBT, 262, 263, 264, 269, 278, 280immersion, 395, 396, 397, 400, 405incipient faults, 296, 323, 329incremental cost, 53, 57, 83, 84, 85, 88,

90, 91, 92, 99, 196incremental cost allocation, 57Independent Power Producers, 2, 65, 330independent system operator, 25, 51,

104, 121, 175, 217inelastic load, 65, 92inequality constraints, 198, 211, 212,

373information technology ., 2, 54, 59infrared detectors, 297, 401infrared imager, 400infrastructure planning, 125, 126installed capacity, 22, 25, 115, 122, 222,

223, 231, 266intelligent electronic devices, 139interface agents, 355, 356, 357, 358interharmonics, 342international financing agencies, 124Internet, xiv, xvii, xix, 114, 118, 140,

141, 143, 144, 145, 358, 416, 417,418, 419, 420, 421, 422, 423, 424,425, 426, 427, 428, 429, 431, 432,433, 434, 435, 436, 437, 440, 441,445, 446, 449, 451, 452, 453, 457,458, 459, 460auction, 55, 56, 60, 61, 65, 67, 82, 84,

90, 91, 95, 96, 98, 105, 108, 109,

464

178, 193, 194, 195, 362, 413, 457,458,459

bandwidth, 431education, 143, 354, 399, 420energy trading, 418, 423, 457multimedia, 421on-line training, 420power trading, 418real-time data, 138, 417, 421, 427,

431, 449, 453, 454usability, 419

Internet Service Provider, 418, 423, 427,431,458

inter-provincial power market, 242, 244inter-temporal constraints, 77, 91, 96inter-zonal congestion, 88investment planning, 307

Java Virtual Machine, 434JDBC, 439, 440

LANIWAN technology, 134last accepted offer, 55liberalisation, 47, 73, 144load forecasting, xiii, 120, 121, 122, 151,383,412

load levelling, 21, 270load management, 21, 135, 145, 150load pocket, 55load profiles, 26, 63load shedding, 80, 145, 334loading vector, 158locational marginal prices, 88, 96, 98locational marginal pricing, 88, 99long term planning, xii, 122long-term contract, 8, 18, 93long-term contracts, 18, 93loop flow, 8loss allocation, 246, 247, 248, 249, 251,253,254

loss ofload probability, 238

magnetising reactance, 30, 31, 32, 37mandatory system operator model, 158,

159, 160, 162marginal costs, 3, 53, 58, 210, 240, 242

Index

marginal pricing, 23, 57, 99, 164, 165,187

market clearing, 65, 71, 85, 87, 89, 90,91, 96, 177

market clearing price, 177market mechanism, 53, 155, 160, 167,

219, 231, 234, 236market operator, 457market reform, 1market regulation, 21, 46, 48market transparency, 22maximalist ISO, 96, 97, 103megawatt mile allocation, 57merit order, 70, 82meter asset management, 114meter assets, 111, 114microeconomic principle, 99micro-gird, 20MIME type, 421minimalist ISO, 96, 97, 103mitigation, xiii, 6, 10, 98, 107, 125, 231,

335mobile agents, 354, 357, 358mother wavelet, 337, 338, 339multi-converters, 278multilateral, 56, 59, 158, 160, 161, 179,

184, 185, 192, 195, 196, 197, 198,199, 200, 212, 214, 361

multilateral trades, 185, 361multilateral trading, 184multilateral transactions, 179, 184, 192,

197, 198, 199, 212multilayer feedforward network, 121multiple linear regression, 121multi-tiered structure, 159mutation, 40, 41, 372, 373, 375, 376,

377,378

negative generator, 115negative sequence, 344network automation, 119network management system, 132, 138newsgroups, 420no load bid, 96nodal pricing, 59, 73, 88, 166, 167, 187,

188

Index

non-discriminatory auction, 55non-immersive systems, 397nonparametric regression, 121non-stationary voltage, 336nuclear, 3, 4, 5, 6, 9, 19, 45, 55, 64, 72,

154,231

object models, 143object oriented, xvii, 438ODBC, 136,439on-line load forecasting, 122open access, xiii, 2, 3, 57, 60, 73, 79,

108, 109, 140, 163, 174, 176, 183,192, 198, 206, 208, 216, 218, 219,372,459

operating platform, 416, 436, 450opportunity costs, 83, 170, 186optimal power flow, 52, 57, 59, 77, 109,

159, 160, 188, 219, 371, 373, 410,412

options contract, 362options markets, 412

parallel processing, 139, 348, 459partial discharge, 300, 311, 323pattern search method, 32peak load time, 241peer-to-peer protocols, 134penalty payments, 291, 317phase balancing, 33phase-locked loop, 272photovoltaics, 9, 12planning horizon, 58, 122plant expansion, 120pollution, 9, 15, 18, 19, 221pool selling price, 191poolco model, 96, 108positive sequence, 344postage stamp method, 187, 188power exchange, 21, 22, 46, 60, 106,

175, 177, 215, 256, 275, 331, 457,458

power injections, 79, 210, 211power line carrier, 134, 144, 145, 148,

150

465

power pool, 4, 22, 82, 86, 87, 98, 100,109, 159, 176, 179, 182, 183, 184,185,192

power quality, xiv, 21, 25, 117, 127,143, 258, 259, 270, 330, 331, 332,333, 335, 339, 346, 347, 348, 349,350,351

power station monitoring, 418, 445power swing, 139, 260, 269PQ monitoring, 348PQ standards, 348price cap regulation, 165, 167price-cap, 72pricing scheme, 3, 8, 188, 221priority insurance service, 167, 168, 169,

170privatisation, 1, 2, 4, 50, 51, 52, 54, 63,

64, 65, 67, 72, 110, 117, 119, 120,125, 144, 174, 287, 304, 418

probabilistic curve, 308probabilistic models, 77probabilistic production simulation, 238,

239,243programming language, 417, 433, 434,

435, 438, 444, 449, 451, 452HTML, 138, 417, 428, 433, 434, 436,

437, 441, 442, 443, 444, 445, 458,459,460

Java, xiv, 417, 433, 434, 435, 436,439, 440, 451, 460

JavaScript, 417, 433, 434, 440, 452XML, DTD, XSL, 438, 441, 442, 443,444, 445, 450, 458, 459, 460

programming languageJava applet, xiv, 435, 436, 451, 452,454

Java servlet, 440public electricity suppliers, 1 I 1pulverised coal combustion, 17, 18put options, 360, 365, 367, 370, 410

quality ofsupply, 116, 117, 119, 126,127, 129, 130

ramping rates, 77, 91, 96reactive reserves, 25

466

real time pricing, 218real-time energy market, 97, 158real-time markets, 78, 86regression analysis, 116regulatory body, 110, 334regulatory incentives, 293reliability benefit, 189, 190reliability constraints, 78, 79remote meter reading, 134, 147remote terminal units, 127, 129, 132remote vision, 447renewable, xiii, 2, 4, 5, 9, 11, 13, 16, 17,

19, 20, 21, 27, 45, 53, 231, 330reproduction, 41reregulation, 1retail competition, 2, 51, 63, 73right-of-ways, 169risk assessment, xiii, 115, 117, 125, 316risk control, 313risk management, 106, 292, 311, 314,316,317

rule base, 38, 40, 42, 49, 412

SCADA, 119, 127, 134, 135, 136, 137,138, 144, 145, 146, 297

scheduled wheeling transaction, 121scheduling co-ordinators, 175, 179search engine, 417, 419, 424, 427, 437web crawler, 419

second-tier suppliers, 72security, 24, 47, 117, 139, 140, 152, 202,

205, 219, 320, 358, 414, 424digital signature, 429encryption, 429, 430

private key, 429, 430public key, 430

firewall, 428, 429password, 429Secure Socket Layers, 424, 458

security limit, 163selection, 40, 70, 100, 104, 149, 150,

174, 177, 282, 296, 338, 370, 372,377,428

self-excited induction generator, 27, 48sequential electricity market, 86

Index

series compensation, 260, 261, 271, 272,275, 276, 282, 285, 286, 331

service provider, xiii, 111, 156, 162,163, 164, 170, 288, 289

settlement, 55, 63, 69, 71, 79, 177, 290,423

shadow prices, 96shareholder, 4, 112shoulder load time, 241sigmoid function, 384, 386, 387, 392,

410simultaneous electricity market, 87single-phase loads, 27, 46smart agents, 355smart metering, 63social welfare, 54, 84, 85, 87, 91, 92, 94,

107, 163, 192software functionality, 423solar, 5, 9, 12, 13, 14, 21, 22, 37, 38, 39,

42, 46, 49, 330, 399, 412solar collectors, 38solar power plant, 37, 38, 46, 49, 412solar radiation, 37, 39, 42spinning reserve, 61, 71, 93, 94, 105,

108, 121, 194, 195, 271spinning reserve markets, 71spot markets, 3, 168spot purchases, 63spread spectrum, 144, 149SQL, 136, 437, 438, 439,440stand-alone generation, 20start-up bid, 96state-owned monopoly, 2stator winding, 28stock markets, 79, 395storage heating, 28, 115stranded costs, 6, 9, 46, 51, 54, 63, 71strike price, 154, 362, 365, 367, 369structured query language, 136sub-synchronous resonance, 271, 285super-conducting material, 259supply curve, 56, 68, 69, 84, 98, 159swing curve, 269switching element, 264, 265symmetrical components, 30, 335, 350system dynamics, xxi, 80, 101

Index

system marginal price, 23, 66system operator, xiv, 51, 53, 56, 59, 60,

61, 65, 69, 73, 103, 115, 120, 121,139, 154, 157, 158, 166, 168, 177,178, 192, 193, 194, 195, 210, 331

system-wide blackouts, 155

take-or-pay, 412tap-changer, 261, 277telecommunication industry, 153, 154telephone network, 114thermal heating technology, 37thermal limit, 58, 59, 66, 259, 283thermography, 400, 410, 415thermovision cameras, 297thyristor controlled reactors, 266thyristor controlled series capacitor, 271,

285tier supplier, 112time ofuse, 135, 190tournament scheme, 377transient energy margin, 206transient stability, xvii, xx, 139, 206,

219, 285, 412transmission access, xvii, 51, 175, 184,

191, 197, 200, 216transmission channels, 141transmission charge, 58, 90, 95, 165,

168, 199, 211transmission loss, xiii, 57, 60, 65, 72,

105, 120, 165, 186, 191, 192, 196,197, 198, 204, 214, 247, 257, 373,374, 376, 458

transmission model, 8transmission open access, xiii, 216, 371transmission pricing, xxi, 58, 105, 168,

169, 187, 191, 218, 221, 246transmission protocol, 417, 427FTP, 428TCP/IP, 143, 417, 427, 432

transmission revenue, 162, 164transmission system expansion, 162,

163,170triplen harmonics, 344two-tier system, 120

467

UHF radio, 144, 149, 150unbundling, xii, 50, 52, 53, 73, 194, 371unconstrained schedule, 65unified power flow controller, 275, 331uniform price auction, 55, 68Uniform Resource Locator, 425unit commitment, 77, 78, 82, 91, 96, 97,

103, 104, 108, 109, 177, 180UNIX, 136,426uplift charge, 55usage charges, 162, 164, 165, 166, 167use of system charges, 27, 72, 111, 115

valley load time, 241vertically integrated, 8, 50, 58, 64, 72,

77, 153, 155, 156, 157, 163, 164, 172,178, 210, 360

vertically integrated utilities, 77, 153virtual environments, 395visual display unit, 395voice activated messages, 114voltage collapse, 140, 260voltage control, 14, 26, 80, 93, 148, 193,

194,284voltage dip, 117, 333, 350voltage sags, 13, 331, 332, 334, 335,

348, 349, 350voltage source converter, 280voluntary system operator model, 158,

160, 161, 162, 163

WAN, 134, 139, 358, 431, 449wavelet transform, 336, 337, 339, 350weather forecasting, 399Web browser, 426,429Web page, xiv, 417, 419, 422, 423, 424,

425, 427, 431, 432, 433, 434, 436,437, 440, 441, 442, 444, 451, 452,458design, 423dynamic, 417,437static, 417, 433, 437, 442, 451

Web server, 426, 427, 429, 434, 437,451, 454, 458

web space, 420, 437website, 75, 114

468

wheeling, 7, 54, 57, 58, 74, 188, 189,198, 246, 247, 249, 254, 257

wheeling costing, 246, 249wholesale competition, 2wide-scale power outages, 114willingness-to-pay, 59, 178, 198, 199,

200, 201, 208, 215wind, 5, 9, 12, 13, 14, 17, 20, 21, 22, 26,

45, 49, 53, 147, 259, 280, 330, 349

Index

wireless connection, 417WAP phone, 424, 425

wires business, 174

XLPE cables, 313

zonal price, 71, 166, 167, 168, 188, 189zonal pricing, 90, 166, 167, 188