Electric Utility Deregulation Research Articles

Markets for Efficient Decarbonization: Revisiting Market Regulation and Design

In the 1980s, some seminal works such as markets for power: an analysis of Electric Utility Deregulation by Joskow and Schmalensee and Spot Pricing of Electricity by Schweppe et al. set the foundations for electric system restructuring toward a fully liberalized, marginal price-based market environment in which generators and end users trade. Even then, it was clear that the task was not going to be easy, but an increasingly and always significant portion of the industry and academic thought that it was at least possible. More than three decades after the first markets were implemented, the entire power sector community continues to discuss the suitability of relying on short-term market prices as an efficient signal to drive investments, especially in the current context in which not only traditional generators but also end users can decide to invest in energy supply resources, and an increasing amount of new generation investments have zero or close to zero variable costs, which some people see as a threat to the short-term market paradigm.

Clear Skies Ahead

This article discusses various fields where gas turbines can play a vital role. Building engines for commercial jetliners is the largest market segment for the gas turbine industry; however, it is far from being the only one. One 2015 military gas turbine program of note was the announcement of an U.S. Air Force competition for an innovative design of a small turbine engine, suitable for a medium-size drone aircraft. The electrical power gas turbine market experienced a sharp boom and bust from 2000 to 2002 because of the deregulation of many electric utilities. Since then, however, the electric power gas turbine market has shown a steady increase, right up to present times. Coal-fired plants now supply less than 5 percent of the electrical load, having been largely replaced by new natural gas-fired gas turbine power plants. Working in tandem with renewable energy power facilities, the new fleet of gas turbines is expected to provide reliable, on-demand electrical power at a reasonable cost.

Utilization of Waste-generated Electricity and Deregulation of Electric Utilities

Utilization of Waste-generated Electricity and Deregulation of Electric Utilities

Assessment of Available Transfer Capability Incorporating Probabilistic Distribution of Load Using Interval Arithmetic Method

Following the deregulation of electric power utilities around the globe, it has been widely acknowledged that quantifying the power transfer capability is of increasing importance in the operation and planning of interconnected power systems. This paper reports on the application of probabilistic distribution based interval arithmetic method to estimate the Available Transfer Capability (ATC) in a power network in terms of confidence intervals. Interval arithmetic method enables incorporation of the uncertainty in the input parameters and provides strict bounds for the solution. In the present work, the variation of the real power load is represented as a Gaussian distribution function. The proposed method is tested and validated on IEEE 14 bus test system.

Balancing control for dispersed generators considering torsional torque suppression and AVR performance for synchronous generators

AbstractElectric utility deregulation enabled PPSs (Power Producers and Suppliers) to enter the electricity market. PPSs are supposed to achieve 30‐minute balancing control for stable power supply of electric power. In addition, load rejection and instantaneous voltage drops greatly affect turbine shafting, that is, torsional torque oscillation. Therefore, PPSs must consider a reduction of torsional torque in order to prevent generator shaft damage. This paper proposes a control system which allows the achievement of both 30‐minute balancing control and reduction of torsional torque by using an H∞ controller. The effectiveness of the proposed controller is validated by using MATLAB. © 2009 Wiley Periodicals, Inc. Electr Eng Jpn, 170(1): 16–25, 2010; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/eej.20868

Changes in AC Power Standard in Japan

AbstractThe precise measurement of electric power will increase in importance because of the growth of power consumption and the deregulation of electric utilities. An electric power and energy calibration system was developed at the Japan Electric Meters Inspection Corporation (JEMIC) in 2004, and it was designated as the national electric power and energy standards in Japan in 2005 to replace the aging AC/DC watt comparator. The methods of establishing the electric power standard at foreign National Metrology Institutes (NMIs) can be classified roughly into a method by a sampling wattmeter, a method by the principle of the current comparator, and a method based on dual‐heater multijunction thermal converters. This article describes the transition of the electric power and energy standards in Japan and in foreign countries. Copyright © 2008 Institute of Electrical Engineers of Japan. Published by John Wiley & Sons, Inc.

A Critical Assessment of Electricity and Natural Gas Deregulation

Economic deregulation of electric and gas utilities has failed to achieve its proposed objectives of lowering price, promoting greater consumer choice, constraining market power, and improving infrastructure performance. Concentration has grown, deregulated price increases exceed prices where regulation was maintained, and supposedly free markets do not assure control of market power or cost effectiveness in achieving environmental protection. An agenda for re-regulation is proposed. These reforms would continue the work of Institutional economists in the field of public utility economics.

Balancing Control for Dispersed Generators Considering Torsional Torque Suppression and AVR Performance for Synchronous Generators

Electric utility deregulation made possible for PPSs (Power Producer and Supplier) to entry the electricity market. PPSs are supposed to achieve 30-minute balancing control for stable supply of electric power. Meanwhile, load rejection and instantaneous voltage drop greatly affect turbine shafting, that is torsional torque oscillation. Therefore, PPSs have to consider reduction of torsional torque to prevent generator shaft damage. This paper propose the control system which enables to achieve both 30-minute balancing control and reduction of torsional torque by using H∞ controller. The effectiveness of proposed controller will be verified by using MATLAB.

Electric utility deregulation: Stranded costs vs. stranded benefits

This study re-examines the electric utility market value-book value relation in light of the changing regulatory climate. The change in the market value-book value relation is examined by comparing the market-to-book ratio in the post-regulatory period to the regulatory period. Additionally, this paper compares the stock market’s valuation of electric utility stranded costs (above market costs) to stranded benefits (below market costs). This paper demonstrates that electric utility market value and book value are no longer aligned. Additionally, this paper extends the research on deregulatory effects by documenting a differential market response to estimated stranded costs versus stranded benefits.

Governance Structure Changes and Product Market Competition: Evidence from U.S. Electric Utility Deregulation*

Electric utility deregulation associated with the 1992 Energy Policy Act represents a natural experiment for observing linkages between governance structure changes and product market competition. This study finds that governance structures of utilities are enhanced in their ability to control owner‐manager agency conflict post‐1992, but not by as much as comparable industrial firms. Incomplete utility deregulation leads to competition increases that are not as great as those of industrial firms. Governance structure enhancements of utilities lag behind those of industrial firms. Further deregulation is expected to stimulate competition, leading to governance structures that provide greater control of owner‐manager agency conflict.

ROBUST CONTROL DESIGN OF PSS IN WIDE AREA POWER SYSTEM CONSIDERING INFORMATION RELIABILITY

In recent years, electric power system becomes larger and more complex due to the enlargement of power flow in wide area, the deregulation of electric utilities and the full-scale entry of Power Product Companies. Under the background both inter-area and local oscillations are significant. In order to cope with these problems, the advancement of the PSS(Power Stabilizing System) are expected. In this paper, we propose the control system on basis of the robust control theory, which can improve stability of power system in wide area. The proposed control system is based on the “hierarchical power and information network”; that is, the feedback control system is hierarchically constructed by using information of wide area system in correspondence with the level of reliability. In particular, we identify the dynamic impedance model of large power system by measuring voltage and current at the interconnection node. Copyright (c) 2006 IFAC.

On deregulation, unit duty cycle and production costs

This paper highlights the importance of explicitly modeling operating considerations in the context of electric utility deregulation. Expected energy production costs are of interest to generation providers, regulatory authorities and consumers to assess the affects and advisability of deregulation. Accurate determination of plant output levels, duration of plant usage and hence the production cost, depend on knowledge of network characteristics, expected future demand and mix of generation in the system and the prevailing operating policies. Currently, generation owners assume fixed Forced Outage Rate (FOR) values, regardless of unit duty cycle, when performing studies. These FOR values may be based on industry averages for new plants or taken from past operation experience in the case of existing plants. Under deregulation, operating policies may undergo drastic change and unit duty cycles may changes accordingly. In such a situation, the continued usage of FORs based on a former, and now changed, unit duty cycle could result in erroneous energy production cost computations. Proper and accurate analysis of production costs requires that issues such as changes in generating unit duty cycles, and consequently in FORs be explicity considered and modeled. A study was carried out on the Electric Reliability Council of Texas (ERCOT) network to evaluate this concept. Expected production costs were computed using unit FORs computed both from pre- and post-deregulation unit duty cycles. Results show that significant errors in production costs may result if appropriate unit duty cycles and unit FORs are not used.

The US electric utility deregulation: the genie is out of the bottle

Article by Edward L. Flippen (Partner, McGuire Woods LLP, Richmond, Virgina) published in Amicus Curiae - Journal of the Society for Advanced Legal Studies. The Journal is produced by the Society for Advanced Legal Studies at the Institute of Advanced Legal Studies, University of London.

Load‐following control for dispersed generators using a PI controller

AbstractRecently, there has been growing interest in utilizing dispersed generation systems, which are grouped into micro turbine systems, co‐generation systems, and so on, as a substitute for fuel oil energy and a technology to prevent global warming. Since start‐up time of dispersed generation systems is short, it is possible to operate systems to supply load power corresponding to a demand. Moreover, PPSs (Power Producers and Suppliers) can participate in a power retail sales company, since deregulation of electric utilities was instituted in March 2000. However, PPSs have to keep instantaneous generating power commissioning rule, to maintain supply‐and‐demand balance between customer and supplier. Therefore, in this paper, we examine instantaneous generating power commissioning for dispersed generators where start‐up time is short and it is possible to operate systems to supply a power load corresponding to a demand. We adopt a PI controller as a controller. The system is composed of double control loop in inner loop and in outer loop. In inner loop electric power is controlled and in outer loop electric energy is controlled. The controller parameters are designed using the pole‐placement technique. The effectiveness of the proposed control system is confirmed by simulations. © 2003 Wiley Periodicals, Inc. Electr Eng Jpn, 145(2): 58–66, 2003; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/eej.10200

The stackelberg equilibrium applied to AC power systems - a non-interior point algorithm

The electric utility deregulation process and the introduction of competition among its participants introduced the notion of equilibria models adapted to the energy market. Among them, the Stackelberg equilibrium represents a monopolist approach, defined by a hierarchical structure, with a dominant firm acting in a privileged position and a group of subordinated ones acting as followers. Its application to AC power systems can be modeled as a bilevel mathematical problem, and represented by its Karush Kuhn Tucker (KKT) formulation. This paper presents a noninterior point algorithm to solve this Stackelberg equilibrium, considering the electrical power system as an interconnected network through its transmission system. Numerical examples with a 24 bus and the IEEE-118 bus systems illustrated the leader participant behavior and showed the market power exercised by them, which is increased in the presence of tighter transmission capacity constraints. The numerical examples also showed the robustness and efficiency of the proposed algorithm.

Electricity Deregulation after California

This paper discusses electricity deregulation after California. It is based on reports presented in an IEEE Power Engineering Society (PES) panel session that was subsequently updated and expanded by the principal author. It highlights the views of international authorities in Brazil, Chile,France, Germany, Italy, Russia, Spain, and the U.K. It examines the peculiarities and challenges of electric power industry liberalization in Russia; the California model as a paradigm for second-generation reforms in Latin America; and whether events in California will disturb the liberalization process in Spain. Also considered are perspectives of electric utility deregulation and risk management in France; how deregulation might be affected in Italy; and challenges of power deregulation in Brazil. Open accessin Germany, power balance analysis in Europe, and the initial experience of new electricity trading arrangements in England and Wales as seen by the U.K. National Grid are also reviewed.

Electric Utility Deregulation and the Myths of the Energy Crisis

Electricity deregulation was meant to improve the quality of people’s lives by lowering the cost of a critical commodity. In every state that has chosen deregulation, however, power companies, free from the oversight of state regulators, have increased prices and, in California’s case, have driven a utility to bankruptcy. It is clear that deregulation was intended to benefit the energy industry more than consumers by removing cost-based regulations that restricted corporate profits but guaranteed low prices and reliable service to consumers. Deregulation proponents argued that California’s commitment to strong air quality standards prevented development of adequate power plant construction and that not a single power plant was constructed in California in the 1990s. This claim is refuted through an examination of California Energy Commission data. Although other states’ experiences are not as dramatic as California’s, serious problems will emerge if deregulation continues to dominate the policy agenda.

The Contours of U.S. Climate Non-Policy

Nearly a decade after the Rio summit and 3 years after the signing the Kyoto Protocol, the United States is without a climate policy. Contentious debate focuses on the costs and fairness of various policy options to reduce greenhouse gas emissions. The previous Federal Administration had proposed three primary market-based technology-centered climate policy approaches. Two of these (global emissions trading and electric utility deregulation) are untested in this context and are effectively stalled. The third (energy efficiency research and development) proposed to expand efforts that have met with mixed success in the past. After reviewing the current state of U.S. climate policy deliberations, this article considers these three approaches in detail. While none is realistic in its present form, each can serve as a basis for future climate policy development in a more congenial political climate, and with a broader range of policy options and interested actors involved.

How To Improve Reliability In Cogeneration and Steam Systems

ABSTRACT Traditionally, steam and electricity have been produced separately; steam at industrial plants and electricity by utilities. Cogeneration (or combined heat and power—CHP) is the concurrent production of electrical power and thermal energy from the same heat source. Cogeneration reduces electric utility bills and environmental emissions while still providing thermal energy for industrial processes. Many different systems combining boilers and turbines are possible. Newer technologies are making cogeneration opportunities available to smaller-sized thermal plants, and electric utility deregulation opportunities are causing many CEOs to seriously consider cogeneration in their manufacturing plants. Whether steam is created through cogeneration or separate generation, many opportunities exist to improve productivity in the distribution system, operation, and maintenance. These opportunities are captured by taking a systems approach to steam system improvement, which can be facilitated with resources ...

Editorial: Electric utility deregulation and restructuring

Editorial: Electric utility deregulation and restructuring