The equitable distribution of the benefits from decentralization: a challenge for power system designers

All power systems used centralized schemes for decision-making (planning and control). The restructuring movement has sought to change this condition by decentralizing the decision-making in selected parts of power systems, particularly, the generators. Power systems are well suited to decentralization. The author believes that locally optimal (decentralized) decisions can be made to come very close to, if not coincide with, globally optimal decisions (the best possible decisions from centralized processes). Current decentralization schemes do not realize this potential. To obtain the full benefits, the following are needed: (a) convenient and reliable testing and verification processes; and (b) symmetry in the decision-making freedom given to the agents in the system, and in particular, full customer participation.