Benefit optimization of electric energy exchange and power system operation

Due to structural changes in supply and demand of electric energy, the need for more efficient operation of the electric power system has grown. Under this circumstance, the role of electric energy exchange is becoming critical. This paper examines how the benefit from electric energy exchange can be optimized, and how various factors in the operation of the electric power system affects the optimization. WRATES is employed for power system analysis, and the data from the EPRI Regional Systems is applied for the simulation. Modified marginal costs are introduced to describe the cost and benefit of electric energy exchange. Network considerations are very important to optimize the benefit. Inaccurate evaluation of the network would reduce benefit from electric energy exchange, and could harm power system operations. In addition, governmental policies and institutional framework such as fundamental control mechanism and structure of the electric power industry are important factors.