1. “Deregulation”- as a Power Engineering Course Kankar Bhattacharya Department of Electric Power Engineering Chalmers University of Technology 412 96 Gothenburg, SWEDEN Panel Session on “Teaching Deregulation”

2. Outline of the Presentation Deregulation and the Power Academia –as effected by deregulation –inter-dependencies… Teaching Deregulation… at Chalmers –Education levels –Course structures How should we treat topics in the new environment –Example

3. Deregulation of the Power Industry... Has now been accepted and recognized…. –as an important requirement for reduction of electricity prices –for improving technical and economic efficiency of the system Has inevitably changed…. –various aspects of operation and control of the power system Has led to... –reformulation of established models on ELD, UC, among others –scrutiny of reliability, control, security, and power quality requirements –unbundling of various services such has frequency regulation and reactive power

4. Power Academia.. as affected by Deregulation Increasing pressure to re-direct research efforts to address new and emerging issues Demand for multi-disciplinary research –more collaboration projects encouraged Industry research funding- more result dependent now, than ever Demand for all-rounder graduates –computer / management / economics graduates often manage to handle power industry jobs

5. Educators Adapting to the Change... Educators (power engineering departments) play a critical role... –in providing the critical support base to the restructuring process to the players i.e. regulators, market operators and other participants Need for courses and curriculum that train students on the emerging issues –coordinated with utilities, markets and system operators Mutually beneficial process... –industry gets inputs of analytical studies, model development, simulations, etc. that address their unresolved problems –academics benefit from the close interaction with real systems

6. Inter-dependencies and New Trends in Power after Deregulation Power Systems Power Electronics Power Quality High Efficiency Converters Economics HVDC Power Markets Reliability System Analysis and Design OR Techniques Market Models IT and Operations Research Demand Side Management FACTS T & D Econometrics- price forecasts Micro / macroeconomics Distributed Generation Data Mining

7. Teaching Deregulation…. at Chalmers Electricity Markets 1 of 7 Modules in 1st Course in Power Engineering 3rd Year EE, 1p Power System Analysis 4th Year EE, 4p Operation of Restructured Power Systems International Master’s Program, 3p Operation & Control of Deregulated Power Systems Ph.D. + Industry Course, 3p

8. First Course in Power Engineering at Chalmers 25000 A Electricity Markets High Voltage Engg Wind Power Energy Scenarios Solar Energy 1000 W Amplifiers 1 week intensive Monday 8AM-Friday 5PM Project Based Course 7 Modules 25 students in each

9. Electricity Markets… 3rd Year EE, 1p Course Comprehensive, 1 week: Mon 8 to Fri 5 PM Lectures on market design and operation... Invited lectures from market operators... Visit to local disco, etc…. Internet based market simulation... –Powerweb –http://stealth.ee.cornell.edu/powerweb/ Real-life market simulator game Group Projects

10. International Master’s Program in Power Engineering Advanced, state-of-art training in power engineering dwelling on theory and a sound practical basis –Starting September 2002 –No tuition fees Core Areas –Power Systems, Power Electronics, Electric Machines & Drives and High Voltage Engineering Good Response from all over the world!! –Over 100 Applications received in the FIRST YEAR… –30 Students will join from- Sweden, India, China, Iceland, Mexico, Indonesia, Egypt, Turkey, Saudi Arabia, Pakistan, etc. –SCHOLARSHIPS FOR TOP TWO ADMITTED!!

11. International Master’s in Power Engineering at Chalmers

12. Operation of Restructured Power Systems IMP / Ph. D. / Industry Course Module-1: Optimal system operation- overview Module-2: Transition to Deregulation Module-3: Competition in Generation and Role of ISO Module-4: Transmission Open Access Module-5: System Control in Deregulation

13. Module-1: Optimal System Operation- overview Short-term economic operations planning and scheduling models, basics of frequency and voltage control and introduction to power system reliability Sub-modules: –Generation Scheduling ELD and UC models –System Control Frequency control and AGC, voltage stability –System reliability Generation, transmission and distribution reliability

14. Module-2: Transition to Deregulation Multi-area power interchange, energy brokerage system and power pools. Sub-modules: –Optimal Power Flow Various applications Power pools and multi-area power interchanges –Energy brokerage systems Allocation of savings –Deregulation Different structures, country cases and practices

15. Module-3: Competition in Generation and Role of ISO Operational planning activities of competitive gencos and the ISO in different markets. Topics on transmission system Sub-modules: –Pool versus bilateral markets Auction mechanisms and market settlement Dispatch and scheduling activities by gencos, bidding strategies Role of the ISO –System security Classical methods and market based tools –Power wheeling Third party wheeling and pricing of transactions

16. Module-4: Transmission Open Access Transmission costs and pricing paradigms, country practices, ancillary services- definitions and standards of operating authorities and how these are managed Sub-modules: –Transmission open access Transmission costing and pricing paradigms Embedded cost based, incremental cost based, etc. –Ancillary services details Definitions and classification Country practices –Deregulation and reliability Effect of definitions on reliability and need for regulation System performance and regulation practices

17. Module-5: System Control in Deregulation System control services including frequency regulation and reactive power. Congestion management- various models for analysis and practices Sub-modules: –System control in deregulation Frequency regulation and energy balance services Reactive power management in deregulation –Congestion management Congestion management models, pricing instruments Country practices

18. Deregulation and Power Engineering Education What has changed and how should we treat the topics in the changed environment? Train to integrate technical perspectives with economics and policy issues Need to discuss real market operations, structures, and country cases –in addition to theoretical models Exposure to market environment through simulators

19. What has changed? How should we treat the topics in the new environment? Old The classical demand- supply balance The centralized objective function of cost minimization New Market equilibrium Different objective functions –maximization of profits at genco level –maximization of social welfare at pool level

20. The Concept of Market Equilibrium…. Competitive Markets work through an interaction of “supply” and “demand” Market Equilibrium- when price is high enough so that the quantity supplied just equals the quantity demanded Equilibrium Price- at which the demand and supply curves cross. The corresponding quantity is the quantity traded in market equilibrium

21. Train Students to Integrate Technical Perspectives with Economics and Policy Issues…. Technical Perspective: Load Flow Solution A Classical Power Flow Simulation Result All power flows shown are in per-unit

22. Economic Perspective: Transmission Pricing All power flows shown are in per-unit Introduce Power Trades Train Students to Integrate…. (contd.)

23. Calculations: (unit cost of transmission line is assumed 100$/MW-mile) T1: pays 75.7% of the cost T2: pays 24.3% of the cost Power Flow Analysis after Trade-T1 Power Flow Analysis after Trade-T2 Train Students to Integrate…. (contd.)

24. Concluding Remarks Teaching “Deregulation” is unavoidable in the present circumstances –needs to be started early (e.g. 3 rd Year EE course at Chalmers) Many existing courses need to be modified or new courses need to be developed Courses should have a wider scope –with case studies, country examples Train the students to built a broader perspective –integrate their technical knowledge with policy and economics