Abstract
In recent years, the deregulation of the electricity industry aimed at achieving lower price of electricity is becoming a reality in many countries. In Japan, the introduction of the competition at the generation stage made it possible for independent power producers (IPP) to participate in the generation market at the bid-based wholesale level. An increase of non-utility-owned generators may reduce controllable resources for the utility such as spinning reserves. Therefore, when the security control is implemented only by the utility, the cost required for the control may become higher; this may result in higher electricity prices to consumers. Conversely, it is considered that the security cannot be maintained sufficiently using the same cost as usual.
The authors introduce “incentive prices” for leading the non-utility-generators to corporate in the security control. The incentive prices are prices when the utility purchases the power excluding the amount specified in a bidding from the non-utility-owned generators. It has temporal variation, which reflects the ever-changing demand location variation reflected the effect of network losses and constraints. This paper presents a method for determining the desirable incentive prices. Using the proposed method, the preventive control can be executed without exceeding a security cost required in the traditional situation.
