A model for the ISO insecurity costs management in a deregulated market scenario

With the electric market deregulation, it can be observed that the number of market participants tends to increase more and more, while the transmission network remains practically the same. The transmission grid becomes the most critical segment of the unbundled electric system, since it could be operated in conditions closer to the security limits. More than before, security is becoming a relevant requirement in the new deregulated scenario. To meet this requirement, the independent system operator (ISO) has to choose the proper actions to solve security problems due to unfeasible contracted transactions between market participants, in pre and post contingency state, according to economic criteria. The simplest way to account for security would be to include post contingency constraints with the classic feasible economic dispatching (FED). However, a large computational effort is needed to solve it, without offering a good compromise between economics and security. In this paper a model able to account for the insecurities of the power system together with its economics for the new deregulated scenario is presented, thus yielding an "economically correct" statement for the ISO insecurity costs management problem. The proposed model is an extension of a previous author\´s proposal for a vertically integrated environment. A basic algorithm solving the aforesaid model is also described, that allows alleviating computational efforts. Finally, case studies are provided for a test power system