Towards efficient system operation: Generation perspective: 2012 IEEE PES general meeting panel session: Smart grid drivers for improving generator performance

Electricity deregulation led to increased competition in the wholesale market where open transmission access enables replacement of traditional cost-based generation scheduling by competitively priced generation offers. In addition, other value-added products, such as ancillary services are also entered into the competitive regime. This means generator not only compete to sell energy, but also may offer reserves and regulation services at market prices. Wholesale electricity markets incentivized generator companies to adapt value-driven performance metrics that embody increased business volatility. It is a significant transformational step from the much less volatile, cost-based business environment of the traditional vertically integrated utilities.