This paper discusses conceptual frameworks for actively involving highly distributed loads in power system control actions. The context for load control is established by providing an overview of system control objectives, including economic dispatch, automatic generation control, and spinning reserve. The paper then reviews existing initiatives that seek to develop load control programs for the provision of power system services. We then discuss some of the challenges to achieving a load control scheme that balances device-level objectives with power system-level objectives. One of the central premises of the paper is that, in order to achieve full responsiveness, direct load control (as opposed to price response) is required to enable fast time scale, predictable control opportunities, especially for the provision of ancillary services such as regulation and contingency reserves. Centralized, hierarchical, and distributed control architectures are discussed along with benefits and disadvantages, especially in relation to integration with the legacy power system control architecture. Implications for the supporting communications infrastructure are also considered. Fully responsive load control is illustrated in the context of thermostatically controlled loads and plug-in electric vehicles.

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Achieving Controllability of Electric Loads

Economic resilience to natural and man-made disasters: Multidisciplinary origins and contextual dimensions

This paper discusses the lessons learned from electricity sector liberalization over the last 20 years. The attributes of reform models that have exhibited good performance attributes are identified, drawing on empirical analysis of market structure, behavior and performance in many countries. Wholesale and retail market competition and network regulation performance evidence are discussed. Technical, economic, and political challenges to improving the efficiency of what continue to be partial liberalization programs in many countries are considered.

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Lessons Learned From Electricity Market Liberalization

As competition is introduced into the electric power industry, access and pricing policy for transmission will play a pivotal role in shaping future market structure and performance. The externalities associated with the loop flow phenomenon in an electric power network constitute a significant barrier to the formation of efficient markets for electricity and transmission services. In this paper, we present a new approach to the design of an efficient market mechanism for transmission access that resolves these externalities. Under a trading rule that combines the Coasian and the Pigouvian principles to resolution of externalities, property rights are defined so that a competitive market could be established for transmission services and electricity to achieve a social optimum within a power pool. We characterize a dynamic trading process which is Lyapunov stable and always converges to a competitive equilibrium. Finally, we discuss some practical applicability and long-term investment issues.

A market mechanism for electric power transmission

When both individual and aggregate consumer demand is uncertain and firms set prices before demand is known, price‐taking firms may offer advance‐purchase discounts. Consumers with relatively more certain demands and with relatively lower valuations have an incentive to buy in advance the presence of other consumers with higher valuations and more uncertain aggregate demand increases the price they expect to pay in the spot market. Advance‐purchase sales are made to low‐valuation customers, as predicted by traditional models of second‐degree price discrimination, without assuming that firms have market power.

Advance-Purchase Discounts and Price Discrimination in Competitive Markets

tingent forward delivery contracts offered by a seller Each customer's selection of one contract from the menu determines the customer's service order or priority In each contingency, the seller rations supplies by serving customers in order of their selected priorities until the supply is exhausted or all customers are served Various forms of priority service are widely

Priority Service: Pricing, Investment, and Market Organization

Flow-Based Transmission Rights and Congestion Management

Multilevel demand subscription pricing for electric power

Publisher Summary This chapter critically reviews the argument for vertical integration in the electricity industry. It also reviews the argument for restructuring based on unbundling of its products and organizations in favor of market mechanisms. It concludes that both arguments are deficient and that a balanced mixture of vertical integration and liberalized markets is superior to the extremes. Their central conclusion is that efficient management of the risks inherent in the electricity industry requires that restructuring retain universal service for the core of non-industrial customers who rely on regulated rates smoothed over time to recover the costs of service. It addresses basic economic issues posed by restructuring. The central issue is whether the overall technology of the industry—wholesale generation, transmission, and retail service—necessarily implies more or less vertical integration. It was long thought and is still being argued by many that vertical integration of retail utilities was essential for efficient investments and operations. On the other hand, restructuring has often been motivated by the view that the purported advantages of vertical integration are obsolete, that liberalized markets can work well, and that they bring stronger incentives that are likely to result in more efficient investments and operations. The argument presented in this chapter is that neither view is conclusive that pros and cons can be mustered on either side without any clear indication that one or the other extreme is better.

Reevaluation of Vertical Integration and Unbundling in Restructured Electricity Markets

This paper analyzes oil stockpiling policies using models in which U.S. policy choices are restricted to just two instruments-stockpiles and disruption "tariffs." The model considers the influence of U.S. and, in general, OECD import demands upon the OPEC price for oil, and the duration and severity of oil disruptions induced by disturbances among the OPEC nations. Our development is based upon a probabilistic view of disruptions analyzed by applying dynamic programming.

Hung-po Chao

Papers

Priority Service: Pricing, Investment, and Market Organization

Flow-Based Transmission Rights and Congestion Management

Multilevel demand subscription pricing for electric power

Reevaluation of Vertical Integration and Unbundling in Restructured Electricity Markets

Oil Stockpiles and Import Reductions: A Dynamic Programming Approach