Competition and system stability-the reward and the penalty

The business protocols and rules of the competitive electricity market are resulting in fragmentation of the historical vertically integrated structures. Electric services are offered at either cost or market-based prices depending on their type and the level of competition in a particular product. System stabilizing measures are essential for maintaining system security, yet their value is either underestimated or not understood. This paper describes practical methods to quantify the value of some of the stabilizing measures and ways to ensure maintaining the dynamic security of the power systems through business procedures and monetary sanctions.