Economic impact of non-utility generation on electric power systems
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Non-Utility Generation is a major force in the way electrical energy is now being produced and marketed, and electric utilities are reacting to the growth of this new industry. When a utility buys electric energy from a non-utility generation at short notice, such as a few hours, one of the difficult issues encountered by the utility is the evaluation of the rate (buyback rate) it should pay the non-utility generation such that the utility maximizes its economic benefit. Utilities calculate their purchase rates based on a number of different formulae. Short term buyback rates should be based on the operating cost that a utility avoids by utilizing energy from a non-utility generation. This cost is termed as the avoided operating cost in this thesis. Suitable techniques for thermal and hydrothermal systems are developed to assess the short term avoided operating cost under different operating conditions. The studies described in this thesis focus specifically on the economic assessment of the incorporation of non-utility generation in the short term planning of power systems at the generation level and the composite generation and transmission level. In another study, it was assumed that non-utility generation produces energy from its cogeneration and wind facilities. These sources of energy have some typical characteristics that make them different from other sources of electricity. These characteristics were taken into account in modeling the non-utility generation and studies were performed to show their effect on a thermal power system. Composite generation and transmission assessment involves a composite appraisal of both the generation and transmission facilities and their ability to supply adequate, dependable and suitable electrical energy to the major load point. Studies were performed to show the impact of non-utility generation on a thermal power system at this level. The studies and examples presented in the thesis suggest that the proposed techniques for the evaluation of the avoided operating cost will treat both parties involved in energy transaction consistent and include the standard operating practices used by utilities. They can also be used by the utility as a basic framework upon which relevant systems operating criteria and cost parameters can be added to assess a generic buyback rate appropriate for a utility.