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Some Emerging Challenges in Electricity Markets

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Book cover Smart Grid Control

Part of the book series: Power Electronics and Power Systems ((PEPS))

Abstract

Energy deregulation in the 90s led to the development of power markets in the United States. The Public Utilities Regulatory Policies Act (PURPA) in 1978 laid down the early foundations of deregulation. Subsequent legislations included the Energy Policy Act of 1992 (EPAct92) and FERC Order No. 888 in 1996. They established the rules to “remove impediments to competition in the wholesale bulk power marketplace” by promoting “non-discriminatory transmission services” [1]. These legislations led to the development of two different market architectures in different parts of the US. In one, utility companies established a bilateral market to transact with independent power producers and/or other utilities. In others, a third-party nonprofit facilitator—an Independent System Operator (ISO) or a Regional Transmission Organization (RTO)—was established to mediate between the buyers and the sellers of power at the wholesale level. Our discussion in this article will primarily revolve around the latter.

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Notes

  1. 1.

    Modeling transmission switching capabilities also gives rise to integrality constraints [43].

  2. 2.

    The exact penetration level beyond which the uncertainty is significant will no doubt depend on the statistics of the wind and the nature of the power system.

  3. 3.

    Structural market power indices attempt to reveal the same without an explicit game theoretic analysis; see [8, 56].

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Acknowledgements

We thank Prof. Alejandro D. Domínguez-García, Khaled Alshehri, and Mariola Ndrio at UIUC and Prof. Eilyan Bitar at Cornell for helpful discussions.

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Authors and Affiliations

  1. Department of Electrical and Computer Engineering, University of Illinois at Urbana–Champaign, Urbana, 61801, IL, USA

    Subhonmesh Bose

  2. Departments of Computing and Mathematical Sciences & Electrical Engineering, California Institute of Technology, Pasadena, 91125, CA, USA

    Steven H. Low

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Correspondence to Subhonmesh Bose .

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Editors and Affiliations

  1. Department of Electronic Systems, Aalborg University, Aalborg, Denmark

    Jakob Stoustrup

  2. Department of Mechanical Engineering, MIT, Cambridge, MA, USA

    Anuradha Annaswamy

  3. Department of Electrical and Computer Engineering, North Carolina State University, Raleigh, NC, USA

    Aranya Chakrabortty

  4. Department of Electrical and Computer Engineering, University of Central Florida, Orlando, FL, USA

    Zhihua Qu

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Bose, S., Low, S.H. (2019). Some Emerging Challenges in Electricity Markets. In: Stoustrup, J., Annaswamy, A., Chakrabortty, A., Qu, Z. (eds) Smart Grid Control. Power Electronics and Power Systems. Springer, Cham. https://doi.org/10.1007/978-3-319-98310-3_2

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