The influence of quality on the creation of economic value in electricity markets

• Main Authors: Arango, Hector, de Abreu, Jose Policarpo Goncalves, Bonatto, Benedito Donizeti, Tahan, Carlos Marcio Vieira, Kagan, Nelson, Gouvea, Marcos Roberto
• Format: Conference Proceeding
• Language: English
• Subjects: Biological system modeling; Companies; Computational modeling; Economic Value Added; Economics; Electric Power Quality; Electricity; Electricity Market Model; Electricity supply industry; Investments; Optimized Tariffs; Power Economics; Power Regulation
• ISSN: 1540-6008; 2164-0610
• DOI: 10.1109/ICHQP.2010.5625478

This paper deals with the modeling of electric markets whenever certain imperfections pollute the supplied electrical energy. These imperfections are described in terms of a lack in power quality, and must be quantitatively introduced in the model as an additional economic factor which influences the consumption of electrical energy and its market price. Therefore, the main intent of this paper is to provide a unifying perspective in regard of the following question: How much the economic performance of electricity markets is downgraded by imperfections of supply? Such a problem can only be resolved with the aid of a market model, which should be able to integrate both technological and financial features in a single analytical frame. This is precisely the type of market model which is developed in the paper: a one including imperfections along with the other sources of cost. While very simple, the market model may be used in various important studies, such as the x-factor for productivity gains, quality target calculation, disturbances mitigation by demand-side management, etc.. An application to compute continuity standards will be developed as an example of the model usage and potentiality.