Power Exchange as a Deregulated Electricity Market

Optimal load dispatch in deregulated electricity environment (DEE) takes into account hourly changing spot price (SP) of electricity as well as cost of power transmission. DEE allows an industrial plant manager to buy its deficit power or sell any surplus power. If load demand (LD) is greater than plant capacity then difference in power has to be bought. In addition, more power can be bought if spot price is low and own generation can be reduced or stopped all together. If load demand is less than plant capacity then it is possible to sell surplus power at high spot price. However, if spot price is low in this case then own generation can be decreased or even stopped and cheap electricity can be bought form deregulated market. In this book it is shown that, under certain conditions, there is a considerable saving when electricity is traded at power exchange (PX) as compared to fixed cost electricity purchase. Furthermore, it is concluded that severe power shortage in Pakistan can be reduced by utilizing spare capacity of industrial power plants.