“Deregulation”-as a Power Engineering Course

Kankar BhattacharyaDepartment of Electric Power Engineering

Chalmers University of Technology412 96 Gothenburg, SWEDEN

Panel Session on “Teaching Deregulation”

Outline of the Presentation

•Deregulation and the Power Academia–as effected by deregulation

–inter-dependencies…

•Teaching Deregulation… at Chalmers–Education levels

–Course structures

•How should we treat topics in the new environment–Example

Deregulation of the Power Industry...

• Has now been accepted and recognized….– as an important requirement for reduction of electricity prices

– for improving technical and economic efficiency of the system

• Has inevitably changed….– various aspects of operation and control of the power system

• Has led to...– reformulation of established models on ELD, UC, among others

– scrutiny of reliability, control, security, and power quality requirements

– unbundling of various services such has frequency regulation and reactive power

Power Academia.. as affected by Deregulation

• Increasing pressure to re-direct research efforts to address new and emerging issues

• Demand for multi-disciplinary research– more collaboration projects encouraged

• Industry research funding- more result dependent now, than ever

• Demand for all-rounder graduates– computer / management / economics graduates often manage to

handle power industry jobs

Educators Adapting to the Change...

• Educators (power engineering departments) play a critical role...– in providing the critical support base to the restructuring process

• to the players i.e. regulators, market operators and other participants

• Need for courses and curriculum that train students on the emerging issues– coordinated with utilities, markets and system operators

• Mutually beneficial process...– industry gets inputs of analytical studies, model development,

simulations, etc. that address their unresolved problems

– academics benefit from the close interaction with real systems

Inter-dependencies and New Trends in Power after Deregulation

Power Systems

Power Electronics

Power Quality

High EfficiencyConverters

Economics

HVDCPower Markets

Reliability

System Analysisand Design

OR TechniquesMarket Models

IT andOperations Research

Demand SideManagement

FACTS

T & DEconometrics-price forecasts

Micro

/ macroeconomics

DistributedGeneration

Data Mining

Teaching Deregulation…. at Chalmers

Electricity Markets

1 of 7 Modules in

1st Course in Power Engineering

3rd Year EE, 1p

Power System Analysis

4th Year EE, 4p

Operation of Restructured Power Systems

International Master’s Program, 3p

Operation & Control of

Deregulated

Power Systems

Ph.D. + Industry Course, 3p

First Course in Power Engineering at Chalmers

25000 A

Electri

city M

arkets

High Voltage Engg

Wind Power

Energy

Sce

narios

Solar E

nergy

1000 W Amplifiers

•1 week intensive

•Monday 8AM-Friday 5PM

•Project Based Course

•7 Modules

•25 students in each

Electricity Markets… 3rd Year EE, 1p CourseComprehensive, 1 week: Mon 8 to Fri 5 PM

• Lectures on market design and operation...

• Invited lectures from market operators...

• Visit to local disco, etc….

• Internet based market simulation...

– Powerweb – http://stealth.ee.cornell.edu/powerweb/

• Real-life market simulator game

• Group Projects

International Master’s Program in Power Engineering

• Advanced, state-of-art training in power engineering dwelling on theory and a sound practical basis– Starting September 2002

– No tuition fees

• Core Areas– Power Systems, Power Electronics, Electric Machines & Drives and High

Voltage Engineering

• Good Response from all over the world!!– Over 100 Applications received in the FIRST YEAR…

– 30 Students will join from-

• Sweden, India, China, Iceland, Mexico, Indonesia, Egypt, Turkey, Saudi Arabia, Pakistan, etc.

– SCHOLARSHIPS FOR TOP TWO ADMITTED!!

International Master’s in Power Engineering at Chalmers

Quarter-1 Quarter-2 Quarter-3 Quarter-4

ExperimentalMethods

Power SystemDesign

PowerElectronics-II

HighPerformance

Electric DrivesElectric Drives-I High Voltage

EngineeringHigh VoltageTechnology

Power SystemAnalysis

PowerElectronics-I

Electric Drives-II Operation ofRestructured

Power Systems

Power Quality &EMC

Voltage Control& Short Circuits

AdvancedComputational

ElectromagneticsComputational

ElectromagneticsPower Engineering Seminar

Basic Electives Core Courses Advanced Electives

Operation of Restructured Power SystemsIMP / Ph. D. / Industry Course

• Module-1: Optimal system operation- overview

• Module-2: Transition to Deregulation

• Module-3: Competition in Generation and Role of ISO

• Module-4: Transmission Open Access

• Module-5: System Control in Deregulation

Module-1: Optimal System Operation- overview

• Short-term economic operations planning and scheduling models, basics of frequency and voltage control and introduction to power system reliability

• Sub-modules:– Generation Scheduling

• ELD and UC models

– System Control• Frequency control and AGC, voltage stability

– System reliability• Generation, transmission and distribution reliability

Module-2: Transition to Deregulation

• Multi-area power interchange, energy brokerage system and power pools.

• Sub-modules:– Optimal Power Flow

• Various applications

• Power pools and multi-area power interchanges

– Energy brokerage systems• Allocation of savings

– Deregulation• Different structures, country cases and practices

Module-3: Competition in Generation and Role of ISO

• Operational planning activities of competitive gencos and the ISO in different markets. Topics on transmission system

• Sub-modules:– Pool versus bilateral markets

• Auction mechanisms and market settlement

• Dispatch and scheduling activities by gencos, bidding strategies

• Role of the ISO

– System security• Classical methods and market based tools

– Power wheeling• Third party wheeling and pricing of transactions

Module-4: Transmission Open Access

• Transmission costs and pricing paradigms, country practices, ancillary services- definitions and standards of operating authorities and how these are managed

• Sub-modules:– Transmission open access

• Transmission costing and pricing paradigms

• Embedded cost based, incremental cost based, etc.

– Ancillary services details• Definitions and classification

• Country practices

– Deregulation and reliability• Effect of definitions on reliability and need for regulation

• System performance and regulation practices

Module-5: System Control in Deregulation

• System control services including frequency regulation and reactive power. Congestion management- various models for analysis and practices

• Sub-modules:– System control in deregulation

• Frequency regulation and energy balance services

• Reactive power management in deregulation

– Congestion management• Congestion management models, pricing instruments

• Country practices

Deregulation and Power Engineering Education

• What has changed and how should we treat the topics in the changed environment?

• Train to integrate technical perspectives with economics and policy issues

• Need to discuss real market operations, structures, and country cases– in addition to theoretical models

• Exposure to market environment through simulators

What has changed?How should we treat the topics in the new environment?

Old

• The classical demand-supply balance

• The centralized objective function of cost minimization

New

• Market equilibrium

• Different objective functions– maximization of profits at

genco level

– maximization of social welfare at pool level

The Concept of Market Equilibrium….• Competitive Markets work through an interaction of “supply” and

“demand”

• Market Equilibrium- when price is high enough so that the quantity supplied just equals the quantity demanded

• Equilibrium Price- at which the demand and supply curves cross. The corresponding quantity is the quantity traded in market equilibrium

Train Students to Integrate Technical Perspectives with Economics and Policy Issues….

Technical Perspective: Load Flow Solution

1 8

7 3 4

6

5

2

0.94

1.03

1.94

0.31

0.11 1.44 0.92

1.21

A Classical Power Flow Simulation Result

All power flows shown are in per-unit

Economic Perspective: Transmission Pricing

1 8

7 3 4

6

5

2

BU

Y 3

00 M

W:

T1

SELL 300MW: T1

SELL 75 MW: T2

BUY 75 MW: T2

All power flows shown are in per-unit

Introduce Power Trades

Train Students to Integrate…. (contd.)

1 8

7 3 4

6

5

2

2.73

1.03

0.93

1.45

1.55 1.46 0.94

2.49

SELL 300MW

BUY 300MW

1 8

7 3 4

6

5

2

0.92

1.03

2.03

0.41

0.161.53 1.76

2.12

BUY 75 MW

SELL 75 MW

Steps Line, i-j 5-4 6-7 3-5 2-8 1-6 3-6 1-4 8-5 TotalA Li,j * ci,j 50,000 20000 31000 47000 30000 64000 15000 37000B Pi,j Base 1.21 1.03 0.31 1.44 0.11 0.94 1.94 0.92C Pi,j due to T1 2.49 1.03 -1.45 1.46 1.55 2.73 0.93 0.94D Pi,j due to T2 2.12 1.03 0.41 1.53 0.16 0.92 2.03 1.76E Fj due to T1 1.28 0 1.14 0.02 1.44 1.79 1.01 0.02F Fj due to T2 0.91 0 0.10 0.09 0.05 0.02 0.09 0.84G A * E 64000 0 35340 940 43200 114560 15150 740 273930H A * F 45500 0 3100 4230 1500 1280 1350 31080 88040I GTotal + HTotal 361970J GTotal/I 0.757K HTotal/I 0.24.3

Calculations: (unit cost of transmission line is assumed 100$/MW-mile)

T1: pays 75.7% of the cost

T2: pays 24.3% of the cost

Power Flow Analysis after Trade-T1

Power Flow Analysis after Trade-T2

Train Students to Integrate…. (contd.)

Concluding Remarks

• Teaching “Deregulation” is unavoidable in the present circumstances– needs to be started early (e.g. 3rd Year EE course at Chalmers)

• Many existing courses need to be modified or new courses need to be developed

• Courses should have a wider scope– with case studies, country examples

• Train the students to built a broader perspective– integrate their technical knowledge with policy and economics