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Power System Restructuring Models


1. Introduction
Modern power industry operation is particularly diIIicult to understand because oI
the dichotomy between electricity`s business and physical maniIestations. From the
business perspective, electric power is an exchangeable commodity that can be traded
much like any other commodity like oil, wheat, etc and Ior which Iutures markets and
hedging systems do exist. But, in its physical maniIestation, electricity is quite unlike all
other traded commodities. The Iundamental diIIerence is that it cannot be stored to any
signiIicant degree. This greatly aIIects how it must be managed as a business asset, and
greatly constrains its present and Iuture market prices do or don`t interact, as compared to
other commodities. In large part due to its storage-less` nature, electricity can be
transported only on a real-time basis, and in a manner heavily constrained by myriad
physical laws that are complicated in their interactions but nearly instantaneous in their
impact.
The net eIIect oI all oI these diIIerences is that modern electricity trading and
wholesale transportation systems are quite diIIerent Irom the practices existed previously.
Restructuring has been accompanied by a variety oI new problems, which have given rise
to controversy between many governmental organizations and private companies. The
changing nature oI electricity utility industry has brought many new practices to power
system operation. The philosophy and techniques oI planning and operation well
established over past decades have begun to change and it is needed to recognize and
meet these challenges. To create the competition in power market there may be diIIerent
ways oI restructuring the power industry. But considering the organizational set-up,
Iinancial condition, control structure and their coordination, diIIerent reIorm models are
categorized.
This topic aims at describing various market models. Various markets all around
the world can be classiIied on diIIerent basis. The classiIication can be done in the
Iollowing manner:
1. ClassiIication based on energy trading
2. ClassiIication based on contractual models
3. ClassiIication based on operational mechanisms oI diIIerent ISOs
4. ClassiIication based on ownership oI transmission network
There are three diIIerent types oI electric power markets. These are as Iollows:
1. Physical Market
2. Financial Market
3. Balancing Market
Phvsical Market.
Physical market is a market where electrical energy exchange takes place physically.
Energy spot market comes under this market. These markets can be day ahead hourly,
day ahead halI-hourly markets. This market is the core oI all markets as major volume oI
energy is traded on this. In this market, every customer has to pay the Market Clearing
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Price (MCP) and every GENCO gets the MCP (so long as Pay As Bid scheme is not
implemented), provided congestion does not take place. There is a possibility oI high
price volatility in this market. So, every participant Iaces a risk oI losing revenue in a
market clearing process. In order to hedge the risk, there is another market called
Financial market where in there are some Iinancial instruments used to hedge the risk.
Financial Market.
This is the market in which actual energy is not traded, but contracts between two parties
are traded such that both the parties share the risk. Derivatives like Forwards, Futures,
Options, and Swaps are used as risk hedging instruments. These are discussed in details
later.
Balancing Market.
Even though there is a physical market Ior the energy transaction, the physical market is a
day ahead market in which all calculations are done based on Iorecasted load. In the real
time operation, there is a mismatch between Iorecasted and actual load. Hence there is a
need Ior balancing market which takes care oI load/ generation mismatch. Balancing
market reIers to ancillary service management. In most oI the power markets there is a
separate provision Ior creating balancing market. The generators have to submit separate
bids in this market, apart Irom physical spot market.
2. Models based on Energy Trading
This type oI classiIication is based on the level oI competition, i.e. the on which
side the competition exists, wholesale level or retail level.
2.1 Monopoly Model
In this model, a single entity is taking care oI all the business such as generation,
transmission and distribution oI electric power to the end users. Usually (but not
necessarily), in this kind oI model, the monopoly lies with the Government. It is quite
natural that this kind oI model should have strict regulation in order to protect end
consumers against monopoly. Most oI the electric power systems obeyed this model prior
to deregulation.
2.2 Single Purchasing Agent Model
In this model, as shown in Figure 1, there is a competition in the wholesale sector,
i.e. generation. Here, Independent Power Producers (IPPs) are permitted. All generators
sell their power to the central pool or power purchasing agency, which is turn sells, it to
state distribution utilities or distribution companies in the service area. All power
generated by generating companies (GENCOs) must be sold only to a purchasing agency
and not to any other agency. Distribution companies (DISCOs) are only able to purchase
Irom the purchasing agency. They do not have a choice oI choosing their power supplier.
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Inter-state
Tie-line
Figure 1: Pool as Purchasing Agent Model
Gencos Gencos
Discos Discos
C
Power Pool
Discos
C
IPP IPP
S.T.U.
C C C C
In this model, sales Irom power pool to retailers take place at a pre-set tariII price.
EIIiciency considerations suggest that this tariII should Iollow the marginal cost oI the
system while at the same time covering the total costs to the purchasing agency. This
tariII should then be modiIied appropriately Irom time to time. Retail tariIIs, in a
competitive retail market, would inevitably tend to Iollow the cost oI purchasing at the
purchasing agency, wholesale tariII. This model can accommodate the social obligation
policies to be implemented by the government.
In this model, Transmission and distribution network can be owned and operated
by State and Regional transmission utilities. Inter-state tie line should be suIIicient to
maintain a loose regional power pool.
2.3 Wholesale Competition Model
This model, as shown in Figure 2, provides the choice oI supplier Ior DISCOs
together with competition in generation. DISCOs can purchase energy Ior their customers
Irom any competing generator. These distribution companies maintain a monopoly over
energy sales to the Iinal consumers and each oI them has a Iranchise to serve a given set
oI customers. It requires 'open access to the transmission network, and the development
oI a spot market. The purchasing agency concept has come to the low-voltage level rather
than at the high voltage level but now it is not a single buyer model. Generators may sell
directly to any distribution company but open access to low-voltage wires is not
permitted.
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Figure 2: Wholesale Competition Model
Since this model permits open access to the transmission wires, it gives the IPPs
to choose an alternative buyer. However, customers within a service area still have no
choice oI supplier. These will be served by a DISCO in their area. With this model the
'obligation to supply will move to the DISCOs, which still have a monopoly over the
customers. They own and operate the distribution wires.
The transmission network can be owned and maintained by government and
private transmission companies. System operators should manage the operation and
control.
2.4 Retail Competition Model
In this model as shown in Figure 3 all customers have access to competing
generators either directly or through their choice oI retailer. This would have complete
separation oI both generation and retailing Irom the transport business at both
transmission and distribution levels. The transmission and distribution wires provide
open access. There may be Iree entry to generation markets and Iree exit. This means
there should be no regulation over 'need Ior new plants and no requirement to maintain
capacity in production when it has passed its economic liIe. There would also be Iree
entry Ior retailers. Retailing is a Iunction in this model, which does not require the
ownership oI the distribution wires although the owner oI distribution wires can also
compete as a retailer.
This model is not a single buyer model and the power pool in this model is not
like purchasing agency, it is like auctioneer. They never own the power, they do not take
the market risk, and they cannot discriminate the price. It should behave like a single
transporter, moving power to Iacilitate bilateral trading. All the trading oI power will be
done through an integrated network oI wires. The operator oI wire should measure and
account Ior the power trades. In this pooling arrangement, there should be provision Ior
bidding into a spot market to Iacilitate merit order dispatch. The pool will match the
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supply and demand and determine the spot price Ior each hour oI the day. It collects
money Irom purchasers and distributes it to producers.
Transmission Wires
Wholesale Market
Distribution Wires
Retail Market
Figure 3: Retail Competition Model
Customer Customer Customer Customer
Retailer DISCO Retailer DISCO
Genco Genco IPP IPP
The advantage oI this model over monopoly utilities is that competition is
introduced in both wholesale and retail areas oI the system. This model is a kind oI truly
deregulated power market model.
In Wholesale Competition Model, with relatively Iew customers, all oI them
regulated DISCOs, a spot market can be preIerable but not essential. However, in Retail
Competition Model, spot markets will become essential, since contractual arrangements
between customers and producers are carried out over a network owned by a third party.
The network owner must ensure that there are commercial arrangements that allow Ior
the settlement oI imbalances between contracted amounts and actual Ilows. II diIIerent
parts oI the network are operated separately, inter-area payment schemes will also have to
be devised.
In Retail Competition Model, metering becomes a major problem. Metering by
time oI use is no longer merely a useIul way oI promoting eIIicient usage but it is a
commercial necessity. Each customer needs to be metered on hourly basis, iI this is the
settlement period. Since the price may change every hour, it is necessary to know how
much the customers oI each competing retailer used in each settlement period, in order to
bill the right customers and to settle accounts properly. II the customers have adequate
metering, there will be no problems. But iI the numbers oI customers are increasing and
metering capability Ior all the customers is not suIIicient, it may create logistical problem
and provoke disputes.
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3. Models Based on Contractual Arrangements
3.1 Pool Model
The Pool model is comprised oI competitive power providers as obligatory
members oI an independently owned regional power pool, vertically integrated
distribution companies, vertically integrated transmission companies and a single and
separate entity responsible Ior: establishing bidding procedures, scheduling and
dispatching generation resources, acquiring necessary ancillary services to assure system
reliability, administering the settlements process and ensuring non-discriminatory access
to the transmission grid. The Pool operator does not own any generation or transmission
components and centrally dispatches all generating units within the service jurisdiction oI
the pool. PoolCo controls the maintenance oI transmission grid and encourages an
eIIicient operation by assessing non-discriminatory Iees to generators and distributors to
cover its operating costs.
In a Pool model, sellers and buyers submit their bids to inject their power into and
out oI the Pool. Sellers compete Ior the right to inject power into the grid, not Ior speciIic
customers. II a power provider bids too high, it may not be able to sell its power, as his
bid may not get selected. On the other hand, buyers compete Ior buying power and iI
their bids are too low, they may not be getting any power. In this arrangement, low cost
generators would essentially be rewarded. Power pools would implement the Optimal
Power Flow (OPF) and produce a single (spot) price Ior electricity, giving participants a
clear signal Ior consumption and investment decisions. Winning bidders are paid the spot
price that is equal to the highest bid oI the winners. Since the spot price may exceed the
actual running oI selected bidders, bidders are encouraged to expand their market share,
which will Iorce high cost generators to exit the market. Market dynamics will drive the
spot price to a competitive level that is equal to the marginal cost oI most eIIicient Iirms.
Pool model is practiced in Chile, by the National Grid Company (NGC) in
England and Wales till 2000, and in Argentina and stands at the core oI all deregulated
systems so Iar.
3.2 Bilateral Contracts Model
Bilateral contracts model has two characteristics that would distinguish it Irom the
Pool model. These are: The ISO`s role is more limited; and buyers and sellers could
negotiate directly in the marketplace.
This model permits direct contracts between customers and generators without
entering into pooling arrangements. By establishing non-discriminatory access and
pricing rules Ior transmission and distribution systems, direct sales oI power over a
utility`s transmission and distribution systems are guaranteed. Wholesale suppliers would
pay transmission charges to a transmission company to acuire access to the transmission
grid and pays similar charges to a distribution company to acquire access to the local
distribution grid. In this model, a distribution company may Iunction as an aggregator Ior
a large number oI retail customers in supplying a long-term capacity. Also, the generation
portion oI a Iormer integrated utility may Iunction as a supplier or other independent
generating companies, and transmission system would serve as a common carrier to
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contracted parties that would permit mutual beneIits and customers choice. Any two
contratced parties would agree on contract terms such as price, quantity and locations,
and generation providers would inIorm the ISO on how its hourly generators would be
dispatched.
The ISO would make sure that suIIicient resources are available to Iinalize the
transactions and maintain the system reliability. II there is no violation oI static and
dynamic security, the ISO simply dispatches all requested transactions and charges Ior
the service.
3.3 Hybrid Model
The hybrid model combines various Ieatures oI the previous two models. The
hybrid model diIIers Irom the Pool model as utilizing the Power Exchange (PX) in not
obligatory and customers are allowed to sign bilateral contracts and choose suppliers
Irom the Pool. The Pool would serve all participants (buyers and sellers) who choose not
to sign bilateral contracts. The CaliIornia model is an example oI this model. This
structure has advantages over a mandatory pool as it provides end users with maximum
Ilexibility to purchase Irom either the pool or directly Irom suppliers.
As in the Pool case, iI generators opt to compete through the pool, they would
submit competitive bids to Power Exchange (PX). All bilateral contracts would be
scheduled to meet their loads unless they would constrain transmission lines. Loads not
provided bilaterally would be supplied by economic dispatch oI generating units through
bids in the pool.
The existence oI the pool can eIIiciently identiIy individual customer`s energy
requirements and simpliIy the balancing process oI energy supply. The hybrid model
would enable the participants to choose between the two options based on provided
prices and services. The hybrid model is very costly to set up because oI separate entities
required Ior operating the power exchange (PX) and the transmission system.
4. Different System Operator (SO) Models
The ISO is the supreme entity in the control oI the transmission system. The basic
requirement oI an ISO is dissociation Irom all market participants and absence Irom any
Iinancial interests in the generation and distribution business. However, there is no
requirement, in the context oI open access, to separate transmission ownership and
operation. The roles and responsibilities oI ISOs vary widely. In India where regional
grids are owned by regional or state Governments and system interconnection is only
now growing, and growing rapidly towards National Grid status, the protocols oI Iuture
ownership and operation are still being evolved.
4.1 Responsibilities and functions of System Operator
In vertically integrated traditional utilities the range oI operator responsibilities as well as
the ownership oI the system is maximized in one corporate entity. In the new market
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structures there are a variety oI arrangements Ior the system operator and since the
operator must be dissociated Irom all participants the name independent system operator
(ISO) is a natural choice. The ISO has three objectives:
a. Security Maintenance
b. Service Quality assurance
c. Promotion oI Economic eIIiciency & Equity
To achieve these objectives the ISO perIorms one or more oI the Iollowing Iunctions.
(i) Power system operations Iunction
(ii) Power Market Administration Function
(iii) Ancillary Services Provisions Function
(iv) Transmission Iacilities provision Iunctions
There are various models oI ISO, the Iunctioning and operation methodologies oI
which diIIer Irom market to market. In USA itselI, there are 6 diIIerent models oI ISO
available. These are:
CaliIornia, Pennsylvania-New Jersey-Maryland (PJM) interconnection, New York
ISO, Electric Reliability Council oI Texas (ERCOT), New England ISO and Midwest
ISO (MISO). All these models have advantages and shortcomings oI their own.
4.2 California ISO
The ISO, concerned with the reliability oI the grid, balances the operation oI grid
in real time. The real time market is operated by the ISO, which uses ancillary services
bids and supplemental energy bids submitted through Power Exchange (PX) and
Schedule Coordinators (SC). The ISO also determines the real time market price aIter the
Iact (ex-post price) based on actual metered data.
The ISO guarantees a non-discriminatory open access to transmission Ior all
users, manages the reliability oI transmission system, acquires ancillary services as
required, approves day-ahead and hour-ahead schedules, maintains the real time
balancing oI load and generation, maintains Irequency oI the system and does the
congestion management. The ISO also stands as the operator oI control area operators,
which balances inter-tie schedules with actual Ilows across inter-ties. The ISO balances
the system demand with the power output oI local generating units, plus purchases Irom
external electric power systems, minus the energy sold to external systems.
Interactions among diIIerent entities in CaliIornia are shown in Figure 4.
ReIerence Website: www.caiso.com
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.
Figure 4 The California ISO
4.3 New York ISO
The eight members oI New York Power Pool (NYPP) decided to break down the
pool and proposed to Iorm a substitute represented by an ISO and other institutions such
as the PX to comply with FERC rules, maintain reliability in the competitive environment
and Iacilitate a competitive wholesale electricity market. The ISO is responsible Ior bulk
power system operations, including coordination oI maintenance outage schedules and
provision oI transmission services on non-discriminatory basis. The ISO will also
administer and maintain an OASIS (Open Access Same time InIormation System) Ior the
New York state bulk power system. What distinguishes NYPP is the highly meshed
characteristics and Irequent congestion, and what distinguishes this model is its clearing
energy and ancillary service markets at the same time, which is an advantageous Ieature
over other proposals where separation oI markets is implemented. Participants choosing
bilateral contracts are required to submit decremental price bids Ior congestion purpose.
A real time (balancing) market is operated by the ISO using a centralized Iive-
minute security constrained optimal dispatch, where buyers and sellers can participate in
this market up to 90 minutes ahead with Ilexible bids or submit bilateral schedules Ior
energy as well as some ancillary services.
The NYISO uses a Security Constrained Unit Commitment (SCUC) soItware Ior
scheduling day-ahead and hour-ahead to dispatch energy, load, reserves and regulation
taking into account network constraints and schedules outages. The same soItware is used
Ior calculation oI Locational Based Marginal Prices (LMP).
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Interaction oI the New York ISO with other entities is shown in Figure 5.
ReIerence Website: www.nyiso.com
Figure 5 The NY ISO
4.4 P1M Interconnection
The main responsibilities oI the PJM ISO are maintaining the reliability oI
transmission grid, operating the spot market, transmission planning, unit commitment,
operating real time (balancing) market and settlement and billing Iunctions.
The PJM ISO scheduling operation and dispatching would include the day ahead
and hourly process. The day ahead scheduling would take place on the day prior to
operating day, and the hourly scheduling would take place within 60-minute leading to
the operating hour. On a least-cost basis, the ISO would manage to serve the hourly
energy and reserve requirements oI the control area.
Interactions oI PJM ISO with other entities are shown in Figure 6.
ReIerence Website: www.pjm.com
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Figure 6 The P1M ISO
4.5 ERCOT ISO
This ISO does not represent a PoolCo Iunction and is not concerned with or
responsible Ior any activities as those oI power pool such as generation dispatch,
matching oI buyers and sellers, or providing ancillary services. The ISO does not have
any direct control oI transmission network or generation Iacilities, whereas this control is
the responsibility oI the ERCOT control areas.
The ISO`s three primary areas oI responsibility include: Security operations,
Transmission access/ market inIormation and coordinated regional transmission planning
and engineering support. Even though the Iirst priority oI the ERCOT ISO is to maintain
the system security, this ISO has the authority and responsibilities toward the system,
which include Iunctions such as real time system monitoring, response to system
contingencies, administration oI OASIS, transmission tariII administration, ancillary
service veriIication and coordination oI regional transmission planning Ior Iuture planned
transactions.
4.6 New England ISO
The organization oI this ISO is composed oI two major areas:
Svstem Operations and Reliabilitv. responsible Ior daily dispatch oI resources assuring
the reliability oI the system and the administration oI the open access transmission tariII,
short-term and long-term demand Iorecasting and reliability planning.
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Market Operations. directs wholesale electricity marketplace to ensure Iairness to all
market participants and Iull competition that could lead to the lowest price Ior electricity,
provides customer services and training support and perIorms the settlement Iunction in
the marketplace by ensuring that sellers in the spot market are paid by purchasers, and
tracks bilateral contracts between market participants.
The New England ISO proposed seven markets to be run under the ISO
directions. These markets are one energy market, Iour ancillary service markets and two
capacity markets. The ancillary service markets are:
Ten minute spinning reserve (TMSR) market
Ten minute non-spinning reserve (TMNSR) market
Ten minute operating reserve (TMOR) market
Automatic generation control (AGC) market
The capacity markets are:
Operable capability market
Installed capability market
5. Financial Markets
A powerIul electricity market should be supported and implemented by proper
trading tools that take into consideration special circumstances oI electricity trading
which are diIIerent Irom other commodity trading practices. A successIul implementation
oI a trading system in electric energy and its derivative markets could IulIill restructuring
objectives, which include competition and customer choice. A robust trading system
could Iacilitate capable risk hedging instruments that could capture the risks associated
with price volatility and other unexpected changes.
Financial markets associated with power industry provide risk-hedging
instruments such as derivatives. Various derivative instruments are Iutures contract,
Iorward contract and options contract.
Derivative by deIinition is a Iinancial contract (instrument), written on an
underlying asset, whose value depends on the values oI more basic assets. A derivative is
not a security, but an agreement between two parties, with opposite views on the market,
who are willing to exchange certain risks. A hedger would use derivatives as insurance
against market swings, price increases and Iunding costs while getting better exchange
rates in Iinancial markets.
The basic derivatives are called plain vanilla, which include Iorwards, Iutures,
options and swaps. Many derivatives are used in electricity trading, but the most common
ones applied to energy risk management strategies are Iutures, Iorwards and options.
5.1 Futures Contract
A Iutures contract is a standardized one to deliver or receive a certain quantity oI
a commodity at some stated time in the Iuture. Price, quantity, grade, location and time oI
Iuture delivery are all stated in the contract. Note, however, that the only point oI
negotiation is the price. All other terms and conditions are pre-speciIied, thereby making
it a standardized contract. A Iutures contract is thereIore not speciIically drawn to tailor
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the needs oI any particular set oI trader this in eIIect maximizes transIerability and hence
liquidity. That is, other parties, including speculators, can purchase and resell the contract
in the secondary market. Futures contracts relate to a speciIic month, several oI which are
traded at any one time. When the actual month oI delivery arrives, all outstanding
contracts must be settled by delivery oI the commodity or by an oIIsetting contract.
The main justiIication oI the Iutures contract is that it permits specialization
between two elements oI the economic process: the Iunction oI holding commodities (or
other assets) and the Iunction oI bearing the risk oI price changes. The seller oI a Iutures
contract on a commodity does not normally intend to deliver the actual commodity nor
does the buyer intend to accept delivery; each will, at some time prior to the date oI
delivery speciIied in the contract, cancel out obligation by an oIIsetting purchase or sale.
In Iact, historically, less than one or two percent oI Iutures contracts have been IulIilled
by actual delivery.
The Iutures (Iinancial market) and spot markets (physical market) tend to parallel
one another and to converge as the delivery date approaches. The relationship between
spot and Iutures market prices is such that at any point in time the Iutures price and spot
price should only diIIer due to the cost-oI-carry. The cost-oI-carry oI a Iutures contract
comprises interest, insurance, and commission (cost-oI-carry also include storage costs
Ior a commodity such as wheat) that are incurred Irom holding the contract until
settlement.
5.2 Options Contract
Options contracts are also tradable instruments which grant the holder the right,
but not the obligation, to either buy or sell an underlying security, such as a Iutures
contract, or commodity at an agreed upon price at some Iuture point in time. The agreed
upon price is known as the strike price and is established at the time oI purchase. The
Iuture point in time at which the option may be exercised is known as the expiration date.
The buyer oI the option pays a Iee or premium to the seller. A call option gives the holder
the right to purchase the underlying property at some Iuture date, and a put option gives
the holder the right to sell the property at some Iuture date.
Options can be held in isolation. Speculators and hedgers both participate in the
options market. Since options contracts are tradable, the holder has the Ilexibility to sell
the contract in a secondary market. In the electricity market, option contracts can also be
used to mitigate risks oI supply and price. However, option contracts are Iinancial
instruments and are not directly related to the physical delivery oI electricity. The holder
does not have to exercise this right. This Iact distinguishes options Irom Iutures contracts.
5.3 Forwards Contract
Forward contracts are in some aspects similar to Iutures contracts. They involve
an agreement to buy or sell an asset on a certain date Ior certain price. Futures contracts
are traded on an organized exchange, and the terms oI the contract are standardized by
the exchange. By contrast, Iorward contracts are private agreements between two
Iinancial institutions or between a Iinancial institution and one oI its corporate clients.
Usually, in Iorward contracts, there is a range oI possible delivery date. Forward
contracts are not marked to market daily like Iutures contracts. The involved two parties
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contract to settle up on the speciIied delivery date. Whereas most Iutures contracts are
closed out prior to delivery, most Iorward contracts do lead to delivery oI the physical
asset or to Iinal settlement in cash.
6. Markets based on number of suppliers
6.1 Perfectly competitive markets
There are many suppliers and consumers. The selling or purchasing behavior adopted
by one market player will not inIluence the market price. Ideally, the market price is at its
marginal cost oI production.
6.2 Oligopoly market
There are a Iew suppliers. The selling behavior adopted by one supplier has great
inIluence on the market price. The market price may not necessarily reIlect the
production cost. There exists market power.
6.3 Monopoly Market
There is only one supplier. The market price is controlled by the supplier and
sometimes with limitations Irom other organizations such as governments. The market
price generally does not reIlect the production cost.
7. Markets based on the ownership of Transmission Network
7.1 ISO Model
The technical responsibilities oI ISO are discussed earlier in detail. ISO model is
practiced in those countries in which transmission companies are also providing the
generation and distribution services in their area oI operation and secondly, suIIicient
numbers oI equal sized transmission companies exist in the market and it is not possible
to club the system operation Iunction with any oI these companies Ior commercial
reasons. ThereIore, separation oI ownership oI the transmission assets Irom the system
operation Iunction is considered necessary to avoid any preIerential treatment Ior
dispatching its own generation.
7.2 Transmission System Operator (TSO) Model
In TSO model, operation oI the grid and the ownership oI the grid are integrated
in a single entity, which is responsible Ior development oI transmission system and to
provide non-discriminatory open access to all eligible market participants. It is also
responsible Ior system operation Iunctions. Neutrality is an important aspect oI the TSO
to ensure an eIIicient market. This model is prevalent in whole oI the Europe.
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References:
|1| Mohammad Shahidehpour, MuwaIIaq Alomoush, Restructured Electrical Power
Svstems. Operation, Trading and Jolatilitv, Marcel Dekker Publications Inc.,
2001
|2| K. Bhattacharya, M.H.J. Bollen and J.E. Daalder, Operation of Restructured
Power Svstems, Kluwer Academic Publishers, USA, 2001.
|3| Marija Ilic, Francisco Galiana, Lester Fink, Power Systems Restructuring:
Engineering and Economics, Kluwer Academic Publishers, USA, 2e, 2000.
|4| S.N. Singh, Power Systems Restructuring Models`, Proceedings oI CEP course
held at IIT Bombay, 2002.
|5| Proceedings oI the international conIerence on Present and Future trends in
Transmission and Convergence`, New Delhi, 2002, pp. X26-X41.

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