Analysis of electric power industry restructuring

This thesis evaluates alternative structures of the electric power industry in a competitive environment. One structure is based on the principle of creating a mandatory power pool to foster competition and manage system economics. The structure is PoolCo (pool coordination). A second structure is based on the principle of allowing independent multilateral trading and decentralized market coordination. The structure is DecCo (decentralized coordination). The criteria I use to evaluate these two structures are: economic efficiency, system reliability and freedom of choice.; Economic efficiency evaluation considers strategic behavior of individual generators as well as behavioral variations of different classes of consumers. A supply-function equilibria model is characterized for deriving bidding strategies of competing generators under PoolCo. It is shown that asymmetric equilibria can exist within the capacities of generators. An augmented Lagrangian approach is introduced to solve iteratively for global optimal operations schedules. Under DecCo, the process involves solving iteratively for system operations schedules. The schedules reflect generators strategic behavior and brokers' interactions for arranging profitable trades, allocating losses and managing network congestion. In the determination of PoolCo and DecCo operations schedules, overall costs of power generation (start-up and shut-down costs and availability of hydro electric power) as well as losses and costs of transmission network are considered.; For system reliability evaluation, I examine the effect of PoolCo and DecCo operating conditions on the system security. Random component failure perturbations are generated to simulate the actual system behavior. This is done using Monte Carlo simulation. Freedom of choice evaluation accounts for schemes' beneficial opportunities and capabilities to respond to consumers expressed preferences.; An IEEE 24-bus test system is used to illustrate the concepts developed for economic efficiency evaluation. The system was tested over two years time period. The results indicate 2.6684 and 2.7269 percent of efficiency loss on average for PoolCo and DecCo, respectively. These values, however, do not represent forecasts of efficiency losses of PoolCo- and DecCo-based competitive industries. Rather, they are illustrations of the efficiency losses for the given IEEE test system and based on the modeling assumptions underlying framework development.