Assessment of marginal value of transmission services based on risk assessment of system security
Date
2000
Authors
Thekkemadom, Venkatachalam
Major Professor
Advisor
McCalley, James D.
Committee Member
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Abstract
In the United States, vertically integrated electric power utilities have existed side by side for a number of years, so now deregulation and third party open access issues have necessitated a complicated process of functional unbundling for these utilities, that involves divesting operational and some planning control of their transmission and distribution assets. Since ensuring open access facilitates a high level of competition in the generation industry, pricing transmission services correctly is a major challenge. The main objective of this thesis is to suggest an alternative risk based approach to assess the marginal value of transmission services as also to quantify the effect of grid support/enhancement devices. The approach suggested utilizes the risk based security assessment approach to formulate security price signals/indices that effectively reflect the marginal security value of transmission services. The risk paradigm clearly identifies the cause and nature of insecurity, as also the sensitivity of the estimated consequence, contingent to an incremental change in system state. An integral part of such a paradigm is the assignment of responsibility in tangible (say dollar) terms to each players contribution that incrementally benefits/detracts from the extent of system insecurity by assessing independent risk values and corresponding nodal risk sensitivities for steady state concerns of line overloads and bus voltages-out-of-limit.
The risk paradigm, with the above approach, also provides an efficient potential tool to accurately evaluate the usefulness of a FACTS device of a certain rating, especially in competitive markets of the future where it is very likely that siting decisions would not be made at round tables, for social benefit, but with individual profit in mind. Distinct incremental price signals that quantify engineering risk exposure would make for better-understood methodologies to enforce secure yet economic operation of the power system. Consequently, a competitive market with minimal regulatory interference from the central (regional) monitoring body could be facilitated, eventually ensuring increasingly distributed decision-making.
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thesis