An approach to estimate the cost of disturbance to participants of electricity markets

Abstract

The Finnish electricity market participates in the Scandinavian markets, Nord-Pool. The Finnish market is free for dealers, producers and consumers of electricity. Electricity is sold and bought in a market place, which is physically the transmission network. The Finnish transmission network belongs to a single independent company called Fingrid. It has the full responsibility of the Finnish power transmission system. The aim of this work was to determine the costs of disturbances of the transmission network to the participants of electricity markets. Costs of altered power flows because of electricity markets are also discussed. It was found that the costs of the participants depend on how the system operator reacts to the disturbance. In the Finnish power system consumers will usually experience no costs due to the disturbance because of meshed network and counter trade method preferred by the system operator. The costs to the producers and dealers are also low because of the counter trade method. The Network Company will lose the cost of reparation, additional losses and cost of regulation power because of counter trades. If power flows are rearranged drastically because of electricity markets, the only way to fulfil the needs of free markets is that the Network Company buys regulation power for short-term problems and reinforces the network in the long-term situations. This is done if the network cannot be operated safely in the altered power flow situation.