Probabilistic security analysis of bilateral transactions in a deregulatedenvironment

This paper addresses one of the most critical questions iri operation and p lanning in a deregulated environment, namely, how to evaluate an electricit y transaction on the basis of system security, especially when numerous tra nsactions have to be processed simultaneously. From a planning perspective, the question of how to identify the most suitable reinforcements needed to maintain system security so that all entities (e.g. producers, consumers a nd traders etc.) can have equal opportunity to buy or sell is also addresse d. Monte Carlo simulations are used to construct a large population of random Bilateral Transaction Matrices(BTM) simulating the market activities. Quant itative measures, termed the Probabilities of Secure Transactions (POST), a re derived from the simulation results to analyze the feasibility of transa ctions in terms of security. The impact of firm contracts on system securit y as measured by POST is also studied under different operating and plannin g scenarios.